The three stacks

Junior · enrolled learners

This lesson opens with Three failures, three stacks.

What happened

This is a pattern drawn from verified incidents in this course rather than a single event, and it is labeled as such. In the Tether matter the token stack was flawless, with every balance and transfer verifiable throughout, and the asset stack was not, with sufficient fiat reserves held on only 27.6 percent of sampled days. In the USDC episode of March 2023 both the token stack and the legal claim were sound, and the asset stack failed at a custodian while the redemption process was closed for a weekend, producing a thirteen percent discount on an eight percent exposure. In the Goldfinch matter the token stack functioned, the asset was a real loan, and the legal stack was where the failure lived, because a borrower used funds in ways the agreement did not contemplate and nothing on-chain could observe it.

The decision point

Three products, three failures, and in each case two of the three stacks were working perfectly while the third determined the outcome. That is the argument for separating them. A reader who evaluates the token stack, which is the one they can inspect directly, has evaluated the layer least likely to be where the loss comes from, and will find it in excellent order in almost every case including all three of these.

Orientation and Year One are open: anyone can read them without an account. From Year Two onward the lessons are for enrolled learners, because progress through the later years only means anything if it is tracked against a record.

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