What are this week’s highlights?
In this episode, Austin Rampt is joined by Corval, Buns, Kila, Nick Drakon and Justin Silver to discuss the macro picture, the SEC, Solidly fork season, Blur and more.
Read our notes below to learn more.
Macro Picture
CPI print is still going down but not as fast as everyone would have hoped.
Some tokens are going up a lot in very specific situations.
What people need to understand is you can be bullish in a sector or an industry but Nick spent last year majority of the time net short.
The long-term bullish thesis isn’t actionable because everyone still wants to try and pick off opportunities here and there.
A lot of volatility has been sucked out over the last 12 months.
There’s still a lot of money in the market moving around to different spots and chasing yields.
Gary Gensler and the regulations that are coming have no line.
Bitcoin looks like it wants to change its mind and wants to turn bullish but it really hasn’t broken past $25K yet.
New money isn’t coming in.
A lot of people right now are afraid of engaging with new investment opportunities, especially risky assets such as crypto.
SEC vs. Binance and Paxos
Paxos is a licensed company by the New York State Department of Financial Services.
Part of the complaint that they came out with is that because it was being bridged to other chains, they were basically in violation of their licensure.
Binance is just hoping to pay a fine.
Less stablecoins means less cash inflows and less ways to get cash in and out of the system.
The market didn’t care about it.
If the U.S. continues to be hostile, the operators may just say they’re out.
If the regulations are so hostile and prohibitive, maybe we all just start transacting in Euros.
More and more people will just want to get out of the U.S.
People are going to other options.
It’s not an attack on stablecoins but rather it is an attack on $BUSD because of its relationship and mechanics with Binance.
The worst fear of the U.S. is that the world stops accepting $USD as the world’s reserve currency.
The SEC rarely loses because usually, they play really really well.
The SEC can get sloppy sometimes and target the wrong entities for the wrong reasons which will cause them to lose.
The SEC’s main complaint against Paxos is that they didn’t warn investors of the risk associated with $BUSD nor made proper financial disclosures.
Circle is trying to take out their competitors because we are moving to a world where $USDC becomes a predominant stablecoin that is supported by the U.S. CBDC.
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Solidly Fork Season
Success breeds success.
At the end of the day, the majority of the Solidly forks are all operating on old Uniswap v2 tech.
The idea that these DEXs will be the dominant DEXs in 2 or 3 years is really optimistic but that is not going to be the case.
It’s a really good spot to try and make some money but these things need to be iterated on from an architectural standpoint.
In the Uniswap v2 model, a lot of the capital that ends up in the pools isn’t necessarily being utilized so you do end up with underutilized capital.
Uniswap v3 isn’t the only option out there for more efficient capital swaps.
You can’t expect to be a dominant DEX just by forking a project and tweaking a few parameters in it.
Some of the Solidly stuff last year has been done very quickly, it was mashing multiple code bases together and wasn’t necessarily polished.
It’s about tokenomics and the things you put around it.
Bribing is a huge part at the beginning.
Beethoven X is an example of a project that is able to make your capital more efficient.
Newer technology that is more capital efficient over time will attract liquidity.
The key to success in this space is looking into how things lock in together and who benefits who.
Blur Cornering NFTs with Airdrop
It’s built to be a marketplace for professional NFT traders.
They don’t have trading fees which is looked at as a recipe for wash trading.
ZK Future on Fantom
ZK is able to roll-up all of these transactions with the execution done offchain and can still prove that you did all of these things correctly then is able to submit that proof to the chain.
Infinite storage in the context of blockchains is fairly simple, instead of storing smart contracts and storage data, it holds proof or hash of the smart contract, storage data and the list of seeds where it can connect to fetch the actual data.
When you’re writing a zero-knowledge proof circuit, it goes beyond that you’re able to do your own calculation when normally, you need something like a bank or someone to do it for you.
Operation Choke Point in Full Swing
It will have an immediate effect on new companies that get incorporated and choose to do business.
If the populace of a nation wants a thing, they usually get it and it can take some time to get there.
Over enough time, politicians change, legislation changes and the people tend to get what they want as long as it doesn’t kill people or it’s not bad for society.
The U.S. is temporarily going to be affected adversely in various ways.
It is bearish for the short-term but in the long-term, it evens out.
What it would mean is that anyone that holds crypto assets in custody must be a certified financial advisor.
There will be people moving out of their countries if there are hostile regulations but only people who are very hardcore in the crypto space.
It’s not just about developers leaving, it’s about access to capital for a lot of projects and a lot of these U.S. companies are banned from participating in a DEX, now, they have to figure out how to offshore their money if they want to farm it, provide LP or whatever they want to do.
The U.S. loses out in terms of job creation that this new industry will generate over the next decade or so.
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