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Ryan Watkins Profile picture
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23 Jun, 4 tweets, 2 min read
Olympus DAO now owns 98% of its own SushiSwap liquidity.

Impressive asset to have built organically through its bonding mechanisms.

Protocol controlled value is powerful for stablecoin projects as it allows them to reduce dependence on third party actors for currency management
Continue to believe non-dollar pegged stablecoins are the most exciting area of decentralized stablecoins. messari.io/article/the-ar…
Basically the idea here is that by being the primary liquidity provider for OHM Olympus DAO can take actions that wouldn’t be rational for an external actor to do without paying them, but rational for Olympus DAO to do because it’s cost of capital is 0%.
An example of this would be Olympus DAO not rugging liquidity in a crash as external liquidity providers likely would without high compensation.

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More from @RyanWatkins_

Ryan Watkins Profile picture
24 Jun
I’m increasingly skeptical of the economic viability of pegged asset protocols.

The issue is that decentralized custody - a requirement for such protocols - is an inherently low margin business and won’t provide enough returns to nodes to sufficiently incentivize security.

1/
Fundamentally nodes securing pegged assets must have more at stake than the assets they’re custodying.

So if nodes custody $1 billion they must have more at stake than $1 billion otherwise they’d just steal the assets they’re custodying.
The above is why many of these protocols such as Ren and Keep have overcollateralizion requirements - it’s necessary for security in an environment where you can’t rely on trust.

The issue boils down to incentivizing those nodes to put up enough stake to secure assets custodied.
Read 14 tweets
Ryan Watkins Profile picture
17 Jun
Seeing a lot of lazy criticisms about algo stablecoins recently.

It’s the easy take to have after seeing all the Ponzi games.

But if you think that’s all there is to to the sector, you’re missing out on a handful of promising projects like Terra, Frax, RAI, and Olympus DAO

1/
Terra in particular, is beyond promising - its real.

Its UST stablecoin is one of if not the most widely adopted decentralized stablecoins in circulation with real world use.
We’ve had a ton of our community analysts cover these projects recently.

Terra
messari.io/article/terra-…
Read 7 tweets
Ryan Watkins Profile picture
15 Jun
We live in a multichain world.

Today there are 10 blockchains storing more than $10 billion in assets, as well as several ecosystems with meaningful development and activity.

THORChain is vying to sit at the center of this world as infrastructure for cross-chain finance.

1/ Image
For nearly a decade people have speculated about the potential for decentralized exchange between blockchains with some conceptualizing it as the “holy grail”.

Today it’s still largely an unsolved problem at scale. Image
THORChain is an attempt at fulfilling this vision.

It is a cross-chain liquidity protocol built using the Cosmos SDK that aims to provide a variety of cross-chain financial services including exchange, lending and borrowing, and synthetic assets.

messari.io/article/thorch…
Read 13 tweets
Ryan Watkins Profile picture
26 May
In hindsight it will look obvious that the winning digital store of value was the asset that was used as money rather than meme’d as money.

$ETH
Wait you mean use as money actually matters? 👩‍🚀🔫
I think Menger would agree

unenumerated.blogspot.com/2016/02/two-ma…
Read 4 tweets
Ryan Watkins Profile picture
19 May
In just two weeks Uniswap V3 has become the largest DEX on Ethereum next to Uniswap V2.

At its current pace of growth it will likely surpass V2 in volume by end of month.

And the most impressive part about it, is V3 is doing so with a fraction of the capital.

1/
Yesterday Uniswap V3 reached 81% of the volume as Uniswap V2.

This is all without liquidity incentives, passive LP managers, or even its soon to come layer-2 deployment.
Uniswap V3 marks a new age of capital efficiency in DeFi.

V3 is facilitating nearly as much volume as V2 with < 15% of the TVL.

It is the only AMM that turns over its TVL more than 100% on a daily basis - more than 5x Uniswap V2 which currently sits at number two.
Read 7 tweets
Ryan Watkins Profile picture
17 May
Token distribution is critical in determining the distribution of power in blockchains.

Concentrated insider ownership may permanently impair projects’ ability to become credibly neutral public infrastructure.

Oligarchy is the system we’re suppose to be disrupting.

1/
Blockchains promote a fundamentally new economic system.

Users opt-in to these systems, which makes it likely that the most trustworthy blockchains will gain the most adoption.

Trust attracts capital.

messari.io/article/power-…
Blockchains with concentrated insider ownership may be able to grow out of their initial distribution.

But we also may find their eventual shortfalls were predestined from launch.

h/t @cburniske
placeholder.vc/blog/2021/4/1/…
Read 7 tweets

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