0/ Tokenomic Design Explorations

Since the inception of crypto-assets, tokenomics have been a fresh attempt at designing asset ownership instruments from first principles.

However, we're just scratching the surface. A thread on how tokenomics can develop in a xchain world
1/ Recap

Currently, tokens are used primarily as a growth marketing tool. Via liquidity mining, protocols spend 'equity' in return for bootstrapping initial adoption.

This has been wildly successful, with Compound's LM event kickstarting the original DeFi Summer last year.
2/ Since then, LM programs have been the bread & butter growth hacking mechanism for new protocols.
However designing LM programs are extremely tricky.

Give away too much, and you'll have little left in the tank for the future. Too little, and competitors will overshadow you.
3/ Cross chain world

When everyone was playing in the same pond (base layer ETH), things were simple.

Vampiric forks were deemed as direct competitors attempting to take away incumbents' market share.

But what happens when cross-chain / L2 ecosystems begin springing up?
4/ At this juncture, few protocols have the necessary resources to launch multiple versions of their product across different chains.

Not only does it cost an exorbitant amt of technical resources, but launching multiple LM programs at once is simply unsustainable.
5/ Friendly forks

As such, cross-ecosystem collaborations between different dev teams are now feasible.

Why spend the time/effort/tokens on another chain if you could green stamp another team that forks your code and channels value to you?
6/ Exhibit A: @CurveFinance / @Ellipsisfi

Ellipsis is an authorized fork of Curve on BSC that is publicly backed by Curve. This has allowed them to garner much stronger market traction, riding on the goodwill and brand recognition of Curve.

7/ In return, Ellipsis will offer veCRV holders a portion of all fees generated. Periodic airdrops of $EPS will also be given to these tokenholders.

By rubber stamping a friendly fork, Curve has increased the value proposition of $CRV, at the cost of minimal resources.
8/ Exhibit B: @LiquityProtocol / @FluityF

Fluity is a similar friendly fork of Liquity on BSC. All $LQTY holders are rewarded with 25% of all the $FLTY tokens over the course of 2 years. However, Liquity currently has 'no oversight' over Fluity.

9/ These examples show how protocols are beginning to work together to form Parent - Subsidiary relationships.

Parent enjoys 'royalties' in the form of airdrops / fees generated by the sub.

Subsidiary enjoys brand recognition + advisory from Parent to accelerate early adoption
10/ DeFi Conglomerates

Moving forward, this type of growth strategy will likely see increased adoption by ETH-based DeFi majors.

Most of them are simply swamped with meeting roadmap goals and have not designed LT strategies & LM programs to include multiple DeFi ecosystems
11/ If DeFi bluechips are able to formulate partnerships with clear value accrual to their own token, I see no reason why they can't become the dominant Parent token across different ecosystems.

This may very well be how the first DeFi Conglomerates take shape.

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More from @0xWangarian

1 Apr
1/ Prelim thoughts on market cycle

We are reaching the stage where valuations are beginning to lose sense.

New projects out the gate with untested proven models are frequently hitting billion dollar valuations.

Multiple 'froth' signals are also surfacing across the board
2/ Does this mean its the top? Not necessarily.

As the saying goes - Signs of froth are indistinguishable from signs of adoption.

However I find myself thinking that certain projects can drop 90% in valuation now and still be fairly valued.
3/ Generic consensus is that $BTC still has some ways to go before hitting a 'top', largely driven by increased institutional acceptance.

Therefore it wouldn't be wrong to rely on a rising tide lifting all boats.

But how long will this last?
Read 5 tweets
3 Mar
0/ Teaching an old DEX new tricks ($BNT)

4 months ago, Bancor released their flagship single sided Impermanent Loss protection solution for LPs.

70x increase in TVL and 55x increase in volume later,
I present a deep dive on a forgotten DEX that may be the dark horse of 2021
1/ Story so far

Bancor is a OG DEX launched in 2018 (to much fanfare) but suffered from an overcomplicated token model and lacked noticeable traction despite lofty promises.

2/ After 2 years of behind the scenes product iteration and a leadership reshuffle, the original Bancor vision is being realised. Consequently, the Bancorian community is stronger than ever led by @yudilevi @NateHindman @MBRichardson87.
Read 18 tweets
13 Jan
1/ Observations of a dHedge fund manager

Whilst it has its drawbacks, I find myself interacting with the dHedge platform frequently.

For the uninitiated, @dHedgeOrg is a non-custodial copy trading protocol built on top of the @synthetix_io ecosystem.

2/ dHedge's value proposition is simple. It provides a platform for active fund managers to showcase their trading prowess, with a transparent scoreboard for all to see.

Managers can also interact with their investors via public and private posts
3/ Since Mainnet launch in late Oct 2020, dHedge's traction has been growing steadily with ~14m TVL today and over 200 active managers.

Cumulative trading vol on the platform stand at $87m, providing a nice boost to the underlying SNX system as well.
Read 8 tweets
15 Dec 20
1/ Thoughts on investing and missing winners:
A case study on $COVER.

You can't catch every winner. That said, there's always something to take away from the one that got away.
2/ Since the lows in late Nov, $COVER has ~6x its token price.

I knew about COVER since the SAFE farming days, but dumped my SAFE tokens shortly after Cover released its original tokenomics.

3/ At the time, the lack of thought and poor economic design of the $COVER token was the nail in the coffin for me.

I know many others shared my view. However, we all missed something.

We underestimated the team's ability to learn from their mistakes.
Read 6 tweets
15 Nov 20
1/ Some of you are wondering why $SUSHI has been pumping.

Sushiswap? Wasn't that the dead $UNI fork that got hacked by the founder 2 months ago?

Surprisingly, $SUSHI never left. Instead - it has silently been building in the background.

Let me break it down for you
2/ $SUSHI's dark horse narrative comprises of 3 main elements:

1. Market proven product yielding stable cashflows
2. Product releases with strong USP factor
3. Near term catalyst

Together, they construct a powerful narrative for Sushiswap's recovery - and why its far from over
3/ Background
After the initial Sushi hype faded (when 10x rewards expired in mid Sep), TVL and Daily traded volume on Sushiswap collapsed.

Nobody thought a fork with no USP could last.

Throw in a $15m ETH scandal by the founder it looked like the end.

Read 13 tweets
11 Nov 20
1/ On 17th Nov, $UNI farming will end.

Right now ~$2.3bn funds are deployed farming UNI, with $ETH being the reference token.

This means that there is currently ~$1.1bn ETH locked up, about to be released into the wild.

Where do you think that ETH will go?
2/ Whilst a large portion of current TVL will stay in the same pools (fees generated are juicy), I posit a reasonable amount of ETH will leave the Uniswap system in search of higher yields.

Nobody knows numbers at this point but 50% of TVL leaving may be within reason.
3/ If this holds true, ~$500mm ETH will be on the market. They can:

A): Stake elsewhere ($SUSHI/$ALPHA/ETH 2.0 etc)
B): Remain in holder wallets (unlikely)
C): Be sold for stables / altcoins

I believe a large chunk of it will be sold. Why?
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