Thread by @samkazemian

This thread is about stability, money, and why maxis are wrong. If you only ever read one of my 🧵 make sure it’s this one

Let me tell you why BTC and ETH will never be money and what stablecoins are actually about. And how it's still $1T+ bullish for $ETH and $BTC. 👇

First of all, most people should know the dollar itself is loosely pegged to something: the CPI.

The CPI is meant to track a basket of consumptive goods Americans should always be able to buy with their $. It's debatable what should be in this basket, but let's move on.

The concept of creating money pegged to holding one's standard of living the same is not controversial. This is the subtle nuance that's missed by most people because they focus on the properties, not goal of money.

Money is about neutral constancy. It's the reference point.

Notice how the definition of an investment is exactly the opposite of this. If it's a good investment, it should dramatically change your standard of living.

Currency should be neutral. Your standard of living should not change if you hold it. Money is the SI unit of value.

The mere fact that crypto as an asset class is such an incredible vehicle for changing people's lives is quite damning in its ability to act as any form of currency. Ironic it's called cryptoCURRENCY..I know...crypto's not money, except for stablecoins.

We need to do a better job at defining "stablecoin." A stablecoin (especially new algostables like @reflexerfinance @olympusdao @fraxfinance) should be the sub asset class in crypto that's ACTUALLY going to be used as currency. Stablecoins are literally money. Fixed caps aren't.

Truly permissionless stablecoins are far better alternative in the developing world than $BTC/fixed cap. Maxis will say “BTC saves lives in despotic governments/states.” You know what else saves lives? Keeping your standard of living stable. That's what stablecoin design is about

Take a look at stuff like this by @danheld. It's literally 180 degrees wrong. Money isn't about a fixed quantity, it's about fixed standard of living. It's very frustrating how wrong maxis can be about this. Their only response is "ya it will be more stable at higher mcap."

BTC@$1T mcap just had its most volatile 1 month candle. It's not getting more stable. The fact maxis think it's still a good life changing investment is, by definition, anathema to being a currency. Good currencies keep standard of living the same, good investments don't.

Their response is "everything will just be denominated in BTC 1BTC=1BTC bro"
In order for that to happen, you'd need deep coordination for everyone's wages, supply chains, sunk costs, AND STANDARD OF LIVING defined in BTC units. Good luck with that. @Nntaleb explains it well:

Back to the CPI. It's been debatable whether it's doing a good job. @LynAldenContact is great at showing this. CPI compared to most things American's consider part of their standard of living has not been constant+-2.5 inflation.

Home prices+college costs have far outpaced the CPI (though mortgages/debt has gotten cheaper). Electronic goods have tracked CPI well. That means if you held dollars, even with all the money printer brrr, your dollars can still buy you great electronics across time.

This translates to: if someone lives in their parents’ home/rents an apartment, doesn’t have kids, most of their expenditures are on electronics, digital goods, food, their car, and apparel, then their cost of living probably is accurately reported by the CPI. Sound familiar?

That's an entire generation of angry youths that can't leave their parents' house, can't afford real estate, & spend their life consuming electronics because that's literally the only thing CPI accurately tracks. We can do better. The response shouldn't be to go fixed supply BTC

A year of wages no longer keeps your standard of living the same across time. It's not complicated to understand. If you sell your labor for money, that money isn't tracking a standard of living properly. We all feel it. The numbers empirically prove it.

We can create a crypto native CPI. Trustless, global, and better than tradfi CPI. That price index is where $BTC & $ETH will clearly be a component & why it's bullish for fixed supply assets. Algostables are all about the design space of a crypto native trustless CPI.

@fraxfinance'll be releasing our own Frax Price Index (FPI) fully governable onchain. We're collaborating with leading algostables in the space @OlympusDAO @reflexerfinance to join us in this effort. To my knowledge, this is the first real attempt of replacing the CPI in crypto.

Algostable design will likely enter a new renaissance in the months ahead in DeFi Summer 2.0. We want to lead that effort with @fraxfinance and other top algostable projects. Help us build out the FPI together, governed by the tokenholders of the top algostable projects. 🚀