Gamestop admitting what we've all been suspecting.
(media.greatawakening.win)
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They are building a parallel system on the Ethereum Blockchain.
Overtly, it looks like it with be used for NFT collectibles, digital game "rental" capability (smart contracts), and internal loyalty / rewards, but there is speculation that they may offer stock dividends via NFT like Patrick Byrne did with Overstock. Neat stuff but not game-changing...
Read a little deeper and they're building out the framework for a complete stock / equities / futures market that would end Wall Street as we know it. Fuckery would be all but impossible.
I have not looked into the specifics of what they are designing (I really need to) but if all stock trades are done via NFT there is no reason for any middlemen in any sale.
Each stock on NFT has a unique identifier, which can be traded unambiguously and instantaneously between two parties. There is no reason for market makers. There is no reason to create a short. There is no intermediary loophole to exploit (at least none in the sense of the market itself, I don't know if there are any in the system of NFT/blockchain).
I don't know about creating a new "futures" market. If they are doing that I am deeply suspicious (as I said, I really need to look into it). All derivatives are themselves exploits of the system. All bets that a company will do poorly (other than not investing in the company at all) are ripe for manipulation of the system. Puts and calls can make or break companies. Their very nature is manipulation. So if they are doing anything but creating a system for just buying and selling stock, I am very worried. Any of the other casino type systems we currently have, has potential to be disruptive to a free market.
Yep, this. A great side effect is that it would destroy the current system's incomplete reporting and fraudulent use of CDOs / ETFs / "Prime Brokerage Select" derivative securities which hide what's really going on under the covers.
Because each share is tokenized and tracked, it can only be lent once- unlike now, where a single share included in an ETF "basket of stocks" could be shorted by shorting the ETF, plus allows for the creation of another ETF of ETFs which shorts the original ETF's share again- effectively allowing the original share to be re-borrowed and resold multiple times (creating fake / synthetic shares, aka "rehypothecation").
That's a huge market risk, not only for the company, but for the original lender- if the counterparty that borrowed the share defaults, the lender would be on the hook to cover all the synthetic shares created from it.
The inverse is true as well.. it doesn't just apply to short sales- long sales can be rehypothecated the same way and represent the same level of risk should the stock move the other direction.
If GME issues dividends as NFTs, the holders of the synthetic shorts have to pay out NFTs that they don’t own and can’t get. I don’t think it’s going to prevent fuckery just make it public and blow up the system.
The way I read it is... if a company issues a dividend, then that dividend is distributed to the shareholders by the DTCC. If GameStop's dividend is in the form of a NFT, then like you said, there will only be enough NFTs for the legit shares, and that makes a huge problem. At that point the DTCC is put in a position to say that they can't/won't distribute the dividend (NFT) and if they can't uphold that obligation then GameStop has the option of taking their shares to a whole new platform (speculation of a new blockchain trading market being developed).
If all that happens, then it would be great to get an honest market system in place, and leave the corrupt Wall St. current system to die... but what becomes of all the naked shorts that the hedge funds are holding at that point? I'm confused about that part... or maybe I'm confused about everything going on with this, lol.
This is someone working with gamestop on their NFTs (Non fungible tokens/blockchain) technology. They seem to be admitting that their NFT project really is going to be bringing about a new financial system, which is something we've been speculating on over here and at superstonk.
GameStop sent a letter to the DTCC saying they would pull out their shares from the DTCC if need be 👀👀
That's the part I don't understand... If GameStop moves its real shares to a new market (a blockchain NFT market they are developing?) then what happens to all the synthetic/fake/naked short shares?
I don't have a Reddit profile, but I do browse Superstonk, and haven't seen a real explanation of how this would work.
Gotcha! Honestly, this is 100% uncharted territory. Boggles my mind, tho.