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I'm growing increasing concerned regarding the state of the

money market By taking a long tail approach of supporting numerous low quality tokens with nearly non-existent liquidity as collateral, insolvency risk increases exponentially

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Spencer Noon

@spencernoon

Oct 8, 2020

40% of all $CREAM collateral is a single centralized exchange token. 25% of the entire $FTT float is in $CREAM too. This is straight up reckless from a risk perspective, and the people who are going to get hurt the most are $CREAM holders. twitter.com/meeseeking/sta…

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ChainLinkGod.eth

@ChainLinkGod

Oct 8, 2020

Over 40% of Cream's collateral is $78M of $FTT (25% of float) What happens during a liquidation? Well considering $FTT only has a daily volume of $2M and a whole $6 of liquidity on Uniswap... A downward price death spiral is created and that $78M will never be fully covered

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uniswap isn't where the FTT liquidity is so don't think it's the right think to compare to here

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and

I think that misses the forest for the trees here, no token with $2M in total daily liquidity can handle $78M being liquidated at once without a major downward price collapse (furthering the insolvency) This isn't necessarily a $FTT issue, but an issue for Cream and its users

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yeah hear you on that, just think the uniswap datapoint was wrong also FTT does have a lot more support than it looks like but that's not obvious from anything easy to tell

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and

like not saying your point is crazy here--it's not! just that you're overplaying your hand a little bit, like playing as if your point is 2x stronger than it is

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and

I really don't think I am, 25% of the entire $FTT is on Cream, that's 39x the daily volume and 40% of all collateral on Crean No matter how you paint this, it's incredibly risky for users, depositors are already having issues withdrawing their funds due to a lack of liquidity

SBF

@SBF_FTX

Replying to

@ChainLinkGod

guess we're going to have to agree to disagree then, not saying you're totally wrong here just that there's nuances to it, but if you're not willing to give any ground here then :shrug:

5:34 AM · Oct 9, 2020Twitter Web App

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and

explain the nuances to it then since multiple replies have crossed already

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and

You haven't really made a counterargument tbf

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and

so: 1) uniswap was a bad datapoint 2) otc market is really deep for FTT 3) I personally am happy to buy a bunch 4) coins with buy/burns etc. tend to have away deeper liquidity 5) there's a flip side to this: the more you cut down on lending, the less usage the protocol gets

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