[bigdaddyrabbit2]

Nothing happens in finance because it is "the morally right thing". It's all a game of incentives. Wall Street Banks take disproportionate risks because they are incentivized to do so.

The interesting thing here is how the un-bailout-able nature of ETH affects the players in Crypto. Because ETH can't be magically printed, the VCs have to decide if they will walk away or bail out the retail end users. It looks like they decided to do the latter.

This has happened more than once in Crypto - I can think of the Binance hack, where Binance bailed out the users. OpenSea has also been covering ETH lost by its users who had their Bored Apes stolen because of user mistakes.

I wonder what it is about Crypto that causes large players to cover user loses. I need to learn more.

[latexr]

> I wonder what it is about Crypto that causes large players to cover user loses.

The answer is in the comment you replied to:

> there are a lot of awfully rich people who are scared of the bubble popping.

The value or cryptocurrencies depends on hype and on convincing the next chump that they should buy in. The large players have a lot of money invested which they will lose if the cryptocurrency value tanks because people lost trust. Covering user loses is itself an investment; it contains the damage by making the issue die down.

[slg]

Exactly, this move tells us that the people behind Wormhole think that $325m is the lower bound for the risk to their previous investment if they didn't act. That means they likely have billions at stake in which they fear losing or like I originally said they are worried it is a bubble that might pop.

[rewtraw]

or: it's not a bubble but the next era of the web. they see the long term value of being a leading ecosystem and don't want to fumble their position.