3/ most profitable businesses in crypto, outside of interchange, is selling services to venture funded crypto co's
hosting and web3 infra will be a huge category, but custom SaaS growing rapidly esp in cybersecurity, compliance, and legal tech
4/ AWS dominates startup spend by giving credible early stage co's $150k in credits and building strong "lock in"
whoever spends their way to this strategy in crypto infra will dominate. microsoft and IBM tried in 2017, google is about to unleash their multi-product strat.
5/ lending pools were helpful for liquidity aggregation but don't make sense LT
in current environment, P2P lending platforms that enable aggregation of customized loans into loan portfolios built using custom risk parameters will dominate. customization > aggregation.
6/ crypto products need better bundling. constructing your own crypto ops and backend stack is brutal + cost heavy rn. unsure if it will be M&A or channel partnerships, but too much is unbundled from a price perspective and cognitive overload perspective.
7/ very few companies have invested in building effective sales and marketing teams that have technical competence - seeing high churn and poor NPS from companies who enjoyed free media during the bull market but now have to acquire and retain users and customers
8/ NFT projects will launch their own marketplaces, their own front-end products and platforms, and if they can, their own chains. once u run out of stuff to sell or your audience runs out of cash, u need cash flow
9/ as a follow on, NFT market microstructure is still being formed but will be an even bigger category than DeFi as the universe of assets represented as NFTs grows. liquidity aggregation will be key to winning.
10/ bitcoin is (still) exciting despite the narrative cycle on CT and in MSM. vocal minority of bitcoin MLM ppl (podcasters and paid content shills) aren't relevant. builders are focused on global gig economy, payments via LN, new privacy tools, etc. slow and steady progress.
11/ DAOs (in current form) are really not useful for solving the social and economic coordination problems they're trying to solve
more DAO tooling doesn't change this. it's a behavioral economics / tsxn cost problem re: Coase's theorem.
should be used sparingly imho
12/ all reliable, secure compute will require energy. energy is a universal constant for all comms and compute.
solving for energy sources + more efficient hardware just as important as inventing new consensus mechanisms. physics ftw.
huge opportunity if u r patient
13/ after 8 years of crypto VC in equity + tokens, tokens still the fastest path to liquidity by dragging future EV into present moment, but rife w moral hazard and difficult to monetize w/o bigger whales to buy ur bags
next 3 - 5 years need material exits on overpriced equity
14/ critical inflection point for industry as a whole on censorship resistance + decentralization
washington DC is busy. compromise is being negotiated behind closed doors. not a criticism, just a reality. this makes bitcoin more important imho cuz fewer "big" players to attack.
15/ still early for the blockspace / secure financial compute as an asset narrative, but digital commodities markets are coming. enron was super early. a few co's tried in 2013 w/ cloud compute futures. will be a big narrative cycle in 2023 +
16/ twitter bots are absolutely unbearable. the level of spam / crypto junk email is insane. i don't want your newsletter or podcast or NFT gated DAO.
crypto still one of the most exciting and high growth categories imho, just more landmines + dumb money now. DMs open!
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1/ thanks to @farokh and the @RugRadio community for having me on the show today! i enjoyed discussing NFT market structure and why i don't care for utility or roadmaps with my JPEGs 🙅♀️
2/ blog post on NFT market microstructure and how it may evolve over time - don't worry, u will be able to explain market microstructure if u just skim it lightly
bonus: you can collect the post as an NFT if you are so inclined, thanks to @viamirror
bitcoin, ethereum, and fully collateralized, dollar asset backed stablecoins (effectively the on-chain banking sector) make up the majority of the market today
2/ more interesting in looking at velocity, or trading volumes as a % of market cap, to understand where the turnover is in current markets
stablecoins have by far the highest velocity (we'll break this down further), followed by Tron (why?), Solana, and Ethereum
3/ stablecoins data is also fascinating
despite calls for its demise from both industry insiders and outsiders, tether is the backbone of crypto markets
despite commanding less than half the stablecoin market cap, the USDT trade pair comprises over 80% of daily trading volume
1/ an explainer on asset liability mismatch and why crypto firms are especially susceptible to this phenomenon due to issues around duration matching and risk management
tl;dr the finänce explanation for celsius, 3AC, and many others struggling
this is a balance sheet ⚖️
2/ unlike tradfi, in crypto, most debt doesn't have a fixed term and requires over-collateralization (you have to post more collateral than the value of your borrowing)
in the last month, a lot of long term debt suddenly became short term debt or even worse, got called
3/ so all of a sudden, millions or in some cases, billions of dollars of long term debt suddenly became short term debt
this changes the *duration* of your liabilities dramatically
let's look at the structure of the assets side of the balance sheet
1/ crypto sentiment is tricky to untangle, especially in the echo chamber that is crypto twitter
at @CoinSharesCo, we use data to inform our view on the market. here are some data points that provide helpful context.
2/ from our weekly fund flows report - last week, investors added to #bitcoin positions, with $126M in net inflows into publicly traded bitcoin products
with 2 consecutive weeks of net inflows across all crypto products, investors are buying the dip 🍲