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Ryan Watkins Profile picture
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12 Apr, 8 tweets, 2 min read
Price action will cause people to believe anything.

I don’t care how high BNB or CAKE go, it won’t change that they’re still copycats.

It’s one thing to view these assets as a way to make money, it’s another to view them as innovations that push this industry forward.

1/
The reason why BSC is faster and more scalable is not because of some magical technological innovation.

No, it’s instead the magic of centralization.

BSC is an Ethereum fork with a centralized validator set.

That’s it. Nothing more.
What Binance has done well with BSC is GTM.

Binance has incredible reach and influence and has used that to funnel a boatload of new users in DeFi.

Binance executes period. That’s why BSC is winning.
That said if you really want speed and scalability outside Ethereum without sharding state and without going entirely centralized, there are more legitimate ways of getting that such as with Solana.

But BSC ain’t it.
Every cycle people get hoodwinked by the latest centralized solution to all blockchains problems.

Every cycle influencers pump these narratives so they can dump on naïve retail traders when it’s over.
You can make money on the way up... BSC will likely have a place in this industry for the foreseeable future.

But if you really think BSC has achieve smart contract supremacy, and will become the world’s settlement layer, you are on crack.
Be careful of trading decentralized finance on Ethereum for deception finance on Binance Smart Chain.

Labels and reality are two different things.
Btw I say this as someone who

1) believes the future is multichain (I have big bets to back this)

2) believes maximalism is for zealots not investors

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Ryan Watkins Profile picture
11 Apr
“xyz protocol is great, but I don’t get how value accrues to xyz token”

This take sounds smart on the surface, but has now psyops many people out of the best opportunities.

Just because a token doesn’t capture fees now, doesn’t mean it won’t eventually capture value.

1/
As this view has become more popular it’s gradually begun to get abused.

Tokeneconomics are important, especially after the wave of useless utility tokens in 2017.
But that doesn’t mean that every token needs pay dividends now to be valuable.

What’s far more important is:

1) protocols are used and create value first

2) protocols have a viable path to value capture

messari.io/article/govern…
Read 4 tweets
Ryan Watkins Profile picture
6 Apr
Application specific blockchains are going to surprise people over the coming months.

Many have much better value capture and clearer paths to adoption than all the general purpose smart contracting platforms which have poor value capture and face an uphill battle vs Ethereum.
@terra_money and @THORChain are early examples of this.

Expect these two to continue gaining attention over the coming months, and expect more like them to emerge.

The smart contracting market is saturated, and there’s a ton of value being created at the base layer elsewhere.
In the future I imagine many smart contract platforms may specialize and become defacto application specific chains.

Others will ultimately function like branch offices for protocols that are headquartered on Ethereum.
Read 5 tweets
Ryan Watkins Profile picture
6 Apr
With the launch of @feiprotocol you’ve probably been hearing a lot about Protocol Controlled Value (PCV).

PCV is a powerful concept that’s core to of many of the latest decentralized stablecoins including $FEI, $OHM, $FLOAT, and $FRAX.

But what is it and why does it matter?

1/
PCV is a fairly simple idea.

It basically just means a protocol itself taking ownership of the collateral it receives when users mint new stablecoins.

This means collateral is not redeemable like it is in MakerDAO.
FEI Genesis participants just found this out the hard way.

The ETH they deposited into Fei's bonding curve is not redeemable.

They can only get their ETH back by selling FEI to the protocol on the protocol's terms (currently at a massive discount).

Read 16 tweets
Ryan Watkins Profile picture
25 Mar
Ethereum is an emerging digital economy in the early stages of a multi-decade economic boom.

The Problem?

Dollar-pegged stablecoins dominate Ethereum and the dollar is controlled by the Federal Reserve...

But what if we had stablecoins not pegged to fiat currencies at all?

1/
This is the idea at the heart of the latest wave of decentralized stablecoins.

These novel projects offer a radical opportunity for Ethereum’s monetary system to achieve stability while eliminating dependence on fiat currencies.
messari.io/article/the-ar…
It's not surprising that Ethereum has dollarized.

Many developing economies dollarize due to monetary instability.

Stablecoins allow Ethereum to overcome ETH’s volatility, which would otherwise handicap economic growth.
Read 13 tweets
Ryan Watkins Profile picture
10 Mar
Maker is the most under appreciated DeFi blue chip.

- By far the most profitable DeFi protocol adjusted for token subsidies ($100mm run-rate rev) and growing 📈

- Has one of the strongest moats in DeFi (most widely integrated)

- Use cases are expanding rapidly (more $$$)
Dai is far from perfect.

It doesn’t scale perfectly.

It has centralized collateral.

It is governance heavy.

The buyback and burn token model is suboptimal.

These are all reasons why I believe there is an opening for new decentralized stablecoin competitors.
But overcoming Dai will be not be easy by any measure.

The MakerDAO system is reliable, stable, secure, and proven. Just like anything at the base of the monetary system should be.

Key reasons why the moat is so strong.
Read 6 tweets
Ryan Watkins Profile picture
3 Mar
Remember algorithmic stablecoins?

Following their mini hype cycle in Q4’20, they’ve entered violent death spirals and effectively broke.

But what if told you that they’re going through a Renaissance, powered by the idea of protocol owned collateral?

1/ Image
In our first of two reports on the future of central banking on blockchains we cover algorithmic stablecoin’s:

- market potential
- issues
- renaissance
- most promising projects

This is also the first of our new Enterprise Research offering 👀
messari.io/article/the-ar…
Why should you care about algorithmic stablecoins in the first place?

A sneak preview 👇🏾
Read 14 tweets

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