Is it a good idea to communicate to Sam that CZ is emotionally manipulating him and that he could be making a suboptimal decision by selling for low cost?
“Losing control” implies something bad has happened in addition to the loss of value of FTX. I’m not sure what else that is.
(also commenting on the sale to Binance rather than deliberation with several potential buyers mentioned by Lukas_Gloor)
I happened to be learning full-time about FTX and its broader ecosystem for the past month or two. (ah, hah, I thought maybe next week I can apply)
CZ is a great diplomat. It can be argued that Binance runs on fear, abuse, and limiting the motivation to leave. (This is juxtaposed with FTX model, which is powered by consideration and support.)
In his announcement to sell FTT, CZ (or the team tweeting as CZ), used emotionally challenging language as well as alluded to social biases. This could have motivated SBF to act impulsively, as if to avoid the prospect of prolonged ‘emotional terror’ of the perception of wrongdoing, uncertainty, powerlessness, etc.
We will try to do so in a way that minimizes market impact. Due to market conditions and limited liquidity, we expect this will take a few months to complete. 2⁄4 [Tweet by CZ]
In context, one can imagine CZ enjoying liquidating FTT bit by bit, for an unknown extended period of time (which may not end), which can seem dreadful to customers and SBF, considering the somewhat ‘sadist’ reputation of CZ. People would just seek to avoid pain (that CZ implies to threaten).
… Our industry is in it’s nascency and every time a project publicly fails it hurts every user and every platform. 3⁄4
This can be read as further appealing to Sam to prevent the ‘hurting’ of vulnerable users (and platforms) (and sell impulsively).
I was out with friends yesterday when the topic of whale alerts came up. Following our principles, I decided to be transparent. So I wrote a thread in 5 mins, and posted it. Little did I know it was going to be “the straw that broke the camel’s back.” 1⁄4 (Tweet by CZ)
This portrays effortlessness, that may be disempowering to SBF, who is admired for his fast-paced decisionmaking. ‘was out with friends’ can seek to inspire loneliness, ‘whale alerts’ can be considered fatphobic, and the part with the straw broke back can further allude to physical disempowerment and implied physical threat. Thus, SBF can be motivated to feel powerless compared to CZ.
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The counterargument to the hypothesis that SBF acted impulsively due to CZ’s threatening is that actually, the assets on FTX and Alameda had little value beyond that assigned to them by buyers. SBF can be thus collecting maximum value possible, greater than that which he would gain if further actors studied FTX/Alameda assets.
I am not sure about the valuation of FTX/Alameda. However, Binance is a very similar business. Thus, it can be that studying Binance can have similarly detrimental effects. I am uncertain about this, but it prima facie can seem that assessing the ‘actual’ value of Binance and estimating that of FTX based on that can provide decisive negotiation leverage to SBF.
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One person who seems to be resistant to CZ’s threats is Anatoly Yakovenko (for example, read Binance CEO CZ mused on this very subject on Twitter:. Anatoly could be helpful in negotiating with CZ, creating leverage by seeing through (and shaming) aggression and threats.
I’d think Sam has enough experience in the space (incl. negotiating these types of deals from the position of the buyer) that he wouldn’t let himself be manipulated. So the fact that he’s interested in sealing the deal means he may be in a pretty poor negotiating position. :/
While I agree that FTX.com has more than enough experience negotiating deals objectively, I also think that this decision considers the fear that CZ is creating.
This is because as long as FTT gains value after Binance’s sell (due to speculation), then there is no need to agree to the deal. Whether FTT gains value is influenced by investor sentiments.
The deal with Binance shows that SBF does not expect FTT to appreciate after Binance’s sell. This would be the case when fear is associated with FTT. This is what CZ is creating.
Based on this line of reasoning, it is not necessary to agree to the deal with Binance, if one can mitigate the fear being caused by CZ.
Market price manipulation is illegal, so, technically, CZ cannot do anything besides influencing investor sentiments. One can argue that mitigating CZ’s ability to threaten can be the key here, because that is the only effective strategy to keep FTT value high.
One way to mitigate one’s ability to threaten is disclosing their techniques, such as deliberate motivation of negative emotions by appeal to biases, possibly using Twitter bots, etc.
On one hand, ignoring Binance’s offer had to be already thoroughly considered by FTX.com. On the other hand, introducing an external motivation to find a solution by ‘making CZ sincerely contribute’ or ignore him could improve the sentiments around FTT value and thus resolve the problem.
Is it a good idea to communicate to Sam that CZ is emotionally manipulating him and that he could be making a suboptimal decision by selling for low cost?
(also commenting on the sale to Binance rather than deliberation with several potential buyers mentioned by Lukas_Gloor)
I happened to be learning full-time about FTX and its broader ecosystem for the past month or two. (ah, hah, I thought maybe next week I can apply)
CZ is a great diplomat. It can be argued that Binance runs on fear, abuse, and limiting the motivation to leave. (This is juxtaposed with FTX model, which is powered by consideration and support.)
In his announcement to sell FTT, CZ (or the team tweeting as CZ), used emotionally challenging language as well as alluded to social biases. This could have motivated SBF to act impulsively, as if to avoid the prospect of prolonged ‘emotional terror’ of the perception of wrongdoing, uncertainty, powerlessness, etc.
In context, one can imagine CZ enjoying liquidating FTT bit by bit, for an unknown extended period of time (which may not end), which can seem dreadful to customers and SBF, considering the somewhat ‘sadist’ reputation of CZ. People would just seek to avoid pain (that CZ implies to threaten).
This can be read as further appealing to Sam to prevent the ‘hurting’ of vulnerable users (and platforms) (and sell impulsively).
This portrays effortlessness, that may be disempowering to SBF, who is admired for his fast-paced decisionmaking. ‘was out with friends’ can seek to inspire loneliness, ‘whale alerts’ can be considered fatphobic, and the part with the straw broke back can further allude to physical disempowerment and implied physical threat. Thus, SBF can be motivated to feel powerless compared to CZ.
---
The counterargument to the hypothesis that SBF acted impulsively due to CZ’s threatening is that actually, the assets on FTX and Alameda had little value beyond that assigned to them by buyers. SBF can be thus collecting maximum value possible, greater than that which he would gain if further actors studied FTX/Alameda assets.
I am not sure about the valuation of FTX/Alameda. However, Binance is a very similar business. Thus, it can be that studying Binance can have similarly detrimental effects. I am uncertain about this, but it prima facie can seem that assessing the ‘actual’ value of Binance and estimating that of FTX based on that can provide decisive negotiation leverage to SBF.
---
One person who seems to be resistant to CZ’s threats is Anatoly Yakovenko (for example, read Binance CEO CZ mused on this very subject on Twitter:. Anatoly could be helpful in negotiating with CZ, creating leverage by seeing through (and shaming) aggression and threats.
I’d think Sam has enough experience in the space (incl. negotiating these types of deals from the position of the buyer) that he wouldn’t let himself be manipulated. So the fact that he’s interested in sealing the deal means he may be in a pretty poor negotiating position. :/
While I agree that FTX.com has more than enough experience negotiating deals objectively, I also think that this decision considers the fear that CZ is creating.
This is because as long as FTT gains value after Binance’s sell (due to speculation), then there is no need to agree to the deal. Whether FTT gains value is influenced by investor sentiments.
The deal with Binance shows that SBF does not expect FTT to appreciate after Binance’s sell. This would be the case when fear is associated with FTT. This is what CZ is creating.
Based on this line of reasoning, it is not necessary to agree to the deal with Binance, if one can mitigate the fear being caused by CZ.
Market price manipulation is illegal, so, technically, CZ cannot do anything besides influencing investor sentiments. One can argue that mitigating CZ’s ability to threaten can be the key here, because that is the only effective strategy to keep FTT value high.
One way to mitigate one’s ability to threaten is disclosing their techniques, such as deliberate motivation of negative emotions by appeal to biases, possibly using Twitter bots, etc.
On one hand, ignoring Binance’s offer had to be already thoroughly considered by FTX.com. On the other hand, introducing an external motivation to find a solution by ‘making CZ sincerely contribute’ or ignore him could improve the sentiments around FTT value and thus resolve the problem.
I would be very surprised if Sam was unaware of this dynamic