Topic: Starfish BCB - Loans and Deposits - page 4. (Read 60537 times)

The argument does not hold better for Kraken. Patrick also explicitly stated that any losses in Kraken would be covered by himself personally, and that he "insured" contributed deposits. Patrick caps the rate in Kraken too, and explicitly states that excess profits are kept by Patrick, and losses will be covered by Patrick.


In both Starfish BCB and Kraken, Patrick gets to keep any profits above the rate cap, and he has to cover any losses.

Edit: Here's another quote from Patrick stating that he guarantees the full 100BTC value of a 100BTC Kraken deposit unit and is responsible for losses:

Patrick explicitly allocated the risk to himself. Thus, equitable mistake doesn't apply.



This is explained a few posts up:
https://bitcointalksearch.org/topic/m.1291861

As coinft points out, if the loans had done better than expected the excess profits wouldn't have been equitably split, they would have gone to Patrick.

If you believe the contract implicitly allocates that risk to Patrick, then equitable mistake wouldn't apply. I don't think it allocates the risk that a large number of loans will fail at about the same time due to a hidden interdependency. I believe the contract was premised on a shared understanding that the loans were fundamentally sound.

Correct - will update it again this week.

Since it's in partial default and has no reasonable business model that would permit it to pay you interest, you probably don't want to deposit.

Greetings, how can I deposit in Starfish BCB?  There is no info in the OP, does that mean that it's closed to new depositors?  Also, is there a minimum amount to deposit, or any other kind of limits?  Thanks!

Patrick described his deposits as guaranteed. He stated that he carries the risk from bad loans. That means that he takes the loss if his loans go bad.

Patrick knew that the loans were risky and had the "potential to lose serious money":




These quotes show that the risk that the business model was unsound was intended to be allocated to Patrick. Even though he knew he had the "potential to lose serious money" on his loans, Patrick guaranteed his deposits and explicitly stated that he carries the risk for bad loans. Thus, Patrick is on the hook for all of the losses and is responsible for paying pack his deposits. Simple.

Patrick is doing his best to live up to his promise, as he should, and I commend him for it.

If both sides have a mutual misunderstanding that causes the contract to misallocate costs or risks, fairness requires that the misallocation be corrected unless the contract shows an intent to allocate the risk. Not all legal systems recognize a concept of "equitable mistake", but I don't think there's any serious disagreement that it's equitable.

A classic example would be two parties who each believe that a ship sunk in a particular place and negotiate a fixed-cost contract to retrieve the ship for a specified fee. If it turns out the ship was elsewhere and is therefore much more expensive to recover, fairness requires the fee be adjusted appropriately. This, of course, only applies if the party seeking the re-adjustment is not comparatively more at fault for the incorrect information. It also only applies if the contract doesn't show an intent to allocate the risk that the information was incorrect to the party being paid to recover the ship.

This situation is analogous. Both parties incorrectly (arguably, equally negligently) believed Starfish's high-interest loan model was sound. There's no evidence in the contract that the risk that the business model was fundamentally unsound was intended to be allocated to Patrick. So the contract cannot equitably be enforced as drafted because a situation not foreseen by the contract came to be. The risk of the unsound business model has to be allocated among the parties somehow, the contract doesn't specify how to allocate it, equity demands it be split.

Again, not all legal systems recognize a doctrine of equitable mistake. Some will insist a contract be enforced as written even if a risk that contract fails to allocate (due to a common mistake of fact shared by both partied to the contract and forming part of the basis of the actual "mental" agreement) materializes unless that makes complying with the contract impossible. But there are very few people who think this is actually fair.

You didn't update the balances like you usually do.  And it looks like last week you updated the balances, but not the date of the last update.

I would need to see an analogous case and then agree with it, I can't imagine one myself. Anything can be a common mistake. For instance, I don't believe that there is a "common mistake" in my example, the borrower is just being an asshole. A lender is not a partner. You're not at fault if I tricked you.


Then why do you pursue the hotel's assets after the earthquake and not the casino?

Everyone is responsible for honoring their contracts to the furthest extent possible. The only reason I wouldn't ask someone to honor their contract is if I see that other contracts they have is in conflict with it, and I have more regard for those contracts; like starving kids and whatnot.

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