Tokenized shared platforms (ICOs) w network effects are superior at delivering value to participants than a simple competition between centralized monopolists. Rent seeking can be overcome more efficiently by tokenomics & shared prosperity than competition.
Entrepreneurs essentially become issuing mini-central banks in their micro-economy that represent the platform network but with predetermined issuance policy that participants can transparently view.
The key is DLT allowing for the amelioration of counterparty risk, sharing a common resource, & transparency that reduces the power of platform monopolists (e.g. Uber model).
Transparency is key that monopolists will never provide to the market of a shared network resource. The issuance structure of ICO coins over time is that inflationary supplies lead to decreasing prices for users over time.
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1/ The recent enforcement actions against @coinbase & @binance by government authorities has resulted in incredible hand-wringing by crypto market participants, for a variety of reasons. This indicates to me a few points & lessons learned I'd like to share.
2/ The growth of the crypto industry writ large in terms of onboarding, liquidity, adoption, etc. has been largely attributable to the growth of centralized exchange (CEX) virtual asset service providers (VASPs), predominantly by the defendants.
3/ This growth has been largely celebrated by all, as it represents the primary mechanism in which our own personal holdings have appreciated in value (purchasing power), as the onboarding facilitates new buyers & sellers (resulting in deeper, more lucrative & liquid markets).
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Probabilistic FOMC Interest Assessment
Model: GPT-4
Provide a probabilistic assessment of the Federal Funds Rate by the Federal Open Market Committee on March 21st, 2023.
Ensure the probabilities are distributed between rate hike scenarios, no rate hikes, and lowering rates. Use past FOMC statements and behaviors as correlated to GDP, real estate prices, rates of core inflation, unemployment rates, and bond and equity market performance.
Be sure to weight for current political environment and the potential for systemic financial instabilities.
As an AI language model, I am unable to provide live or real-time data, so the information I provide will be based on my knowledge up to September 2021.
Create a financial and risk management plan of action to resolve the Silicon Valley Bank bank run without having to insure deposits above FDIC insurance limits.
Be sure to account for interest rate risk on bond holdings and anticipated future Federal Reserve monetary policy.
Title: Financial and Risk Management Plan for Silicon Valley Bank Bank Run Resolution
I. Executive Summary
This financial and risk management plan of action aims to address the ongoing bank run at Silicon Valley Bank (SVB) while minimizing negative impacts on the bank's financial stability and reputation.
1/ Everyone knows that Bitcoin (& by extension the digital asset markets) has cycles. It also grows exponentially according to network effects (Metcalfe's Law) adjusted for trading volume (bull / bear cycles). It is now on a long-term exponential support line (log chart).
2/ What isn't discussed was that the monetary regime that established the growth of the network in the first place, as a value capacitor for excess liquidity, was always in relation to central bank policy. Value flowed into the network in search of yield (outperformance) vs. risk
3/ Global by nature (internet facilitated abstraction), it is therefore subject to global monetary & fiscal policies as they relate to stimulus/low rates & spending, respectively. It's where value has the steepest gradient on a risk adjusted basis, outperforming all asset classes
Some trolling for this beautiful Saturday morning is in order: 1. @a16z is a Silicon Valley Web 2 supporter of platforms building Web 3 applications on top of public permissionless networks. 2. Case in point, @opensea was funded in lead Series A (it's VCs all the way down)
4. Opensea generates incredible revenues (extractive rent in the form of fees) from its users (which builders of ETH cheer on because it feeds the deflationary burn narrative in the incessant battle with BTC maxis, got to love it).
1/ CBDCs often associated with a dystopian behavioral control model of governments at the individual level. What's overlooked is that we already have this in the aggregate sense today. Given proper privacy implementations, the concerns over discrete control could be ameliorated.
2/ Studies have shown that a CBDC model, wherein issuance against government debt is on the order of 30% of GDP, could increase steady state aggregate economic output by as much as 3% over the long term, while at the same time dampening the magnitude of inherent boom/bust cycles.
3/ The structure of CBDCs could theoretically be decentralized in terms of DLT (w/ interoperable sidechain BFT systems!). It is known that at current reliability thresholds existing RTGS systems are inadequate for this purpose, so new tech / private services likely to be deployed