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ELI5 game theory:
  • people trust established auditors
  • auditors trust operators who follow the rules and have a trusted party of last resort
  • operators need a reputable partner
  • most available reputable partners will be honest from self-interest
  • you need to collude with your partner in order to steal funds
  • if you stop operating, your partner will force close
  • if your partner force closes without reason, they lose reputation
  • if the channel force closes the managed funds +20% will be reallocated to a new operator
  • if you want out, you pay other vaults that auditors trust to take your deposits
Reputation, auditors, bonding... That's called just use SQL
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They're role names, not legal ones
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The role is pure theater
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