Lots of controversy surrounding the $ETH views, so thought I'd counter just a bit.
First, just want to say that the first 75% of the podcast is filled with awesome trading alpha. Asymmetric payoffs, risk management, inability to dump bad trades (or, worse, doubling down), bad trades turning into investments. Basically, everything that makes you a bad trader.
Last 30 minutes is the ETH discussion. Su starts off by saying that BTC is the reserve currency, especially for bigger players such as miners and exchanges. I think it's funny that those are two of the biggest groups to be disintermediated by ETH (with PoS + DEXes).
As an ETH investor I don't care what miners or exchanges use as their base currency, because Ethereum is trying to kill both of them anyways, full stop.
Next critique is basically the "is ETH money?" debate. Certainly is to me. Probably too big of a debate to go into here.
Light then makes a point which I think is mistaken. That it took institutions 10 years to get comfortable with Bitcoin, and then so who is going to put ETH into their treasury? "A bridge too far," he says. Well, I think everyone knows that the leap from Fiat to BTC is much...
...much harder and longer than the leap from BTC to ETH. Took me 3 years to buy my first BTC, and only 4 months to sell it for ETH (after seeing enough of BTC problems). I expect a similar effect with institutions.
Next, the Pfeffer article is cited. Huge eyeroll from me.
I don't think that paper has been validated at all.
Next, argument that ETH is speculative, and the narrative breaks down when ETH fails to deliver. But BTC has to do nothing to succeed. This laziness/apathy is IMO low-key one of the biggest latent black swans risks to Bitcoin.
No technology can just sit by and do nothing and expect to win. ETH fails repeatedly, but is always experimenting with new tech and trying new things. I don't understand why Hasu praises PTJ's quote about "betting on human ingenuity" if...
...BTC is proud to sit idle and do nothing, while ETH is constantly experimenting on new things.
A few ETH positives that I think they overlook, too. First is, while Ethereum may not be lindy due to the changing narrative, it's developer network effects are!
Ethereum continues to grow in terms of developer activity and community. Critically, these efforts compound. A lot. Hard to match the pace of development activity IMO, and one of the central parts of the investment thesis for ETH.
To wrap up, it was a phenomenal podcast, and I think there is a ton of merit to their critiques. I also think, as a compromise, perhaps, that short ETH/BTC may be better as a short-term trade, and long ETH/BTC better as a long-term investment.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
1) I know basically nothing useful about market microstructure, but I have one theory for why HFT could hate AMM long-term. Requires a bit of an unnecessary and boring backstory in my old career.
2) I used to trade Treasuries, and Tsy futures. And trading the "basis" for a particular maturity was a very popular trade. Similar to how BTC on Bitmex tracks BTC on Coinbase pretty closely due to arbitrage, so too would, say, the 7yr bond track the futures contract for that...
3) ...maturity (CME product known as the ZN). As a basis trader, the 7yr/ZN was WILDLY popular and profitable. The single most levered up trade in the treasury market due to the liquidity and volume of the ZN. For whatever reason, this trade was my entire firm's bread and...
Super interesting technical discussions on both sides of the AMM debate tonight(@SBF_Alameda and @KyleSamani vs @danrobinson). There are also plenty of practical reasons for Uniswap's strong PMF, though. Here's the bottom line for me, as an active Uniswap LP:
For starters, where am I going to get my own personal on-chain algo trading firm with a single transaction? I don't have time or resources to build a bespoke AMM strategy.
I also just don't really care about any of the inefficiencies. I have no other options, and I'm pretty confident that I'm going to make money off the trading fees blindly fading some of these pairs both ways.
THREAD: DeFi is at risk due to ProgPOW. If you care about collateral-based systems such as Maker / Dai, Compound, dYdX, and more, please consider taking a stance on ProgPOW. My number one priority is to prevent a contentious split, not to approve / reject ProgPOW (PP). 1/10
Setup: If PP is pushed through, and there is a contentious split such that the non-PP chain carries sufficient economic weight **even temporarily**, then an enormous amount of collateral will instantly be liquidated. 2/10
For example, if the marketcap split of $ETH is 60/40, (which we saw in the case of ETH/ETC, and BTC/BCH), then a large number of Vaults and other positions will be liquidated since the average Maker collateralization ratio is currently ~300% and the threshold is 150%. 3/10
A thread on social media platforms regarding the @5chdn drama. I mainly want to highlight that various social media platforms have vastly different characteristics, and that most people aren't aware of this. 1/10
Many crypto reddits used to be small, with high signal. The communities were awesome. r/ethereum, r/ethtrader were markedly different. I imagine r/bitcoin was the same once upon a time. As these communities grew, the quality of discourse objectively declined. 2/10
Many prominent members of the community slowly left reddit and joined other platforms such as discord and Telegram. By far the most dominant crypto platform became Twitter. There's a very simple explanation for this: social scalability 3/10
A (very bad) history of key events for smart contracts on Ethereum and why they're exciting: 1. Create a digital token (ERC-20) 2. Create an atomic swap contract to trustlessly exchange these ERC-20 tokens 2.5 Realize that all the tokens we've created so far are worthless
3. Create a token that's actually worth something, and test out your new swapper contracts 4. Fuck up and have your application drained of 12 million Eth. 4.5 Fork Ethereum
5. Create better swappers and concatenate them into an order book to create a decentralized exchange. 6. Realize that all digital tokens are still pretty worthless. 7. Finally, create first valuable ERC-20 token by using smart contracts to lock up collateral
Liquidity is just **one** aspect of investing. A crucial, often overlooked aspect, for sure. But fundamentals still matter. And finding solid innovations in the crypto space can be hugely profitable and worth it despite less liquidity. Nascent coins are on a different time scale.
In particular, liquidity crunches hit hardest for massively premined, manipulated, or otherwise completely hot-air coins. I don't want to re-name names, but there are obviously common ones that come to mind. In any case, in the end technology and innovation reign supreme