1/ Getting many questions, even accusations, about the usefulness of baseline price when valuing $RUNE. Here is a link to a more comprehensive breakdown:
What is baseline price?
It is a calculation derived from first principals.
https://twitter.com/SlawTeh/status/1380165767073820678
What is baseline price?
It is a calculation derived from first principals.
2/ Baseline price is not an opinion or point of view. If RUNE’s market price below a certain level, arb bots buy RUNE? Why?
As important, a what price do the arb bots stop buying RUNE? Answer: the baseline price.
As important, a what price do the arb bots stop buying RUNE? Answer: the baseline price.
3/ I can hear the responses, “What about the circulation supply? What about the fully diluted supply?” The questions and thoughts of modern france.
These are forward looking questions, they ask about the future, and invite speculative answers.
These are forward looking questions, they ask about the future, and invite speculative answers.
4/ The valuation of RUNE breaks down into two parts - the baseline price and the speculative premium. The market’s opinion about speculative questions are measured by the speculative premium.
5/ The network doesn’t care about circulating supply. Arb bots don’t care about fully diluted supply.
The most important operators in the system - computer code all - don’t care. First principals require an understanding of this perspective.
The most important operators in the system - computer code all - don’t care. First principals require an understanding of this perspective.
6/ One piece of alpha: what is the size of the arb bot bid when spot RUNE is below the baseline price? All of the non-RUNE assets in the network. That’s size!
Reason this idea for yourself. No spoon feeding here. Until it makes sense, you are a source of alpha.
Reason this idea for yourself. No spoon feeding here. Until it makes sense, you are a source of alpha.
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