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rkho | 2 years ago

It turns out that PayPal's stablecoin contract allows them to freeze holders from transacting, amongst other things:

https://twitter.com/0xCygaar/status/1688592430315036672

The USDC contract also allows for the freezing of addresses.

discuss

These are all super reasonable things though…? (with the caveat you are explicitly dealing with a centralized vendor)

1. Why does the version matter? It all gets compiled down to bytecode upon deployment and maybe the developers chose this version out of familiarity.

2. See the recent cash app glitch for why you’d want to be able to stop everyone transferring if you had a bug. This gives me more confidence than if it didn’t exist like some other crypto projects which get fully drained due to lack of this functionality. (Only for centralized protocols.)

3. Future proofing for AML / terror regulations. Be mad at your lawmakers if you don’t like this. See tornado cash for what happens if you have lack of controls.

4. This is something you absolutely have to have? Like, I don’t get why this is a point at all. How do you expect to credit users if not by increasing the total supply by the dollars they deposit?

vorpalhex|2 years ago

Paypal already freezes and seizes money from account holders, not for AML compliance but uh.. just because they can.

This includes rules that they can fine you for "misinformation" (these rules have flip flopped a few times, not sure the current iteration).

Bluntly, I won't do business with Paypal. They do bad business. I encourage you to also not do business with them. Using Eth as a backing token doesn't make it any better when they still have the option to just nuke your money with no controls.

mattdesl|2 years ago

This is and probably will always be the case for any centralized stablecoin.

Unlike PayPal's traditional "black box" dollars, freezing and burning PYUSD are transparent actions broadcast to the network—it can be publicly analyzed and tracked in realtime.

spaceman_2020|2 years ago

Plenty of decentralized alternatives exist. You will have to sacrifice price stability though.