[JumpCrisscross]

> sustainable synthetic blockchain assets are possible, but they will always have complicated risk/reward profiles that won't fully mirror the underlying asset they are designed to model

We figured out this doesn't work in the 19th century.

Reserves don't remove volatility, they just hides it. This is how banks work. And like a bank, a system of keeping "enormous capital" on the sidelines, ready to buy, works 90% of the time. When it doesn't, however, when people fear "enormous" is not enormous enough, they withdraw (i.e. sell), which prompts more selling, until eventually, since "enormous" isn't 100%, the buck breaks and the cards come crashing down.

Also people like to steal the "enormous capital," which is why we have regulations.