A short thread:

Investing in crypto for me is the ability to connect w/ founders & a passionate, global community. It requires engagement & collaboration. It can be an intellectually enriching experience and/or a very humbling one. Over the years I’ve questioned why I’m here…
The “why” can be lost in the midst of bull market noise. Bear markets weed out tourists, the wheat from the chaff. But then I realize I wouldn’t want to be doing anything other than crypto. Crypto is not perfect but I believe it’s the most fascinating & important socioeconomic…
Transformation since the Industrial Revolution. It’s changing our relationship w/ money and, moreover, how we coordinate as species. It’s transcending artificial, man-made boundaries & connecting us leveraging the distribution of the Internet & power of open source networks…
Some generations go by without major changes like this one - we’re lucky to be witnessing this transformation &, for those here already, we have a responsibility to make the most out of it.

Crypto is the next wave of the Internet and we’re just getting started. Buckle up friends

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More from @santiagoroel

28 Mar
Last year was a trial run for DeFi as core money legos were put in place. In spite of the suboptimal user experience (UI/UX, gas fees), DeFi saw a marked YoY increase in adoption & usage across the board (see👇).

L2s come at the right time to support more users & use cases 🧵1/6
Total Value Locked (TVL):
- 75x growth in TVL from $580M to $43.5B
- 4x growth in ETH TVL from 2.5M to 9.8M

Note: 75x growth in TVL is USD denominated so factors underlying asset price appreciation. Therefore, the figure is overstated. Likely closer to ~10-20x in underlying
Active Users:

DEXs are among the most popular DeFi protocols & saw a ~20x growth in 24H active users from ~3k to ~67k

@Uniswap is capturing 80% of daily users today

Note: there is double counting in users as some use more than 1 DEX / day so the figure is not perfect.
Read 6 tweets
9 Jan
1/ A few thoughts on algo stablecoins. Touching on DSD, ESD, Frax, BAC & Fei.

These systems rely heavily on game theory. The most important thing to monitor is sentiment

Seeing these algos in the wild leads me to believe some game theory is good. Only game theory is not enough
2/ On coupons:

Been running thru various scenarios and second-order effects of coupons expiring OTM. Judging by secondary market prices of DSD coupons, it seems that probability has been growing. Next 10 days will be key

We have yet to see what happens if coupons expire OTM...
3/ Point of no return:

If coupons expire OTM, then I think it will be a blow of confidence too big to recover from. Theoretically, it benefits non-coupon holders and clearing that debt helps restore the peg. But just evaluating on that basis misses the point...
Read 7 tweets
31 Dec 20
1/ Crypto is undergoing a critical transition in its evolution of becoming the foundational global settlement layer. I liken it to moving from gas (ideas) > liquid (fluid narratives) to a solid-state

2008-17: gas 🎈
2018-20: liquid 💧
2021 +: solid (paradigm shift)

A short 🧵
2/ Bitcoin is farthest along in this state transition hardening as a non-sovereign store of value.

Ethereum is second in line moving from liquid to solid w/ a thriving DeFi ecosystem (PMF) & EIP-1559 (soon)

But there are still legacy parts of crypto that must be shed to advance
3/ Perhaps the most critical chokepoint are centralized stablecoins. Tether is the Achilles' heel of crypto

The recent experimentation of algo stablecoins - $ESD $DSD $BAC & $FRAX - are very healthy for the ecosystem I believe. Buyer beware: they're far from stable (for now)...
Read 8 tweets
29 Nov 20
1/ Investing for me is about applying as much pressure to change inefficient systems saddled with friction. I think we can all agree finance, as it exists today, is a patchwork of outdated and fragile systems. It simply has not caught up with the Internet...
2/ It's hard for me to imagine that our relationship with money/finance will not undergo a profound transformation in the next 5-10 years.

The innovation happening in DeFi is foreshadowing how this relationship may evolve. To understand why start playing with protocols/apps...
3/ After using DeFi apps, perhaps you'll start wondering why your tradFi banks can't do many of these functions. Is DeFi perfect? No. Is it risky? Yes.

There's a long road ahead to realize the full vision/potential of DeFi, but that is what's most exciting here...
Read 4 tweets
13 Oct 20
1/ Some thoughts on being an LP & impermanent loss

When an LP supplies two assets they're long, then the automatic pool rebalancing is an elegant way to buy the dip/sell the tops. Ex: LPs of the DPI-ETH pool are exposed to a DeFi basket & ETH while earning trading fees + $INDEX
2/ This LP strat works when the pool assets are positively correlated. It also acts as a way to rebalance your portfolio in two ways:

- DPI: DeFi index by market cap
- Pool: DeFi to ETH correlation

Thesis: success of ETH and DeFi are positively correlated

h/t @max_bronstein
3/ One of the risks of being an LP in any pool is one pair going to 0 (catching a falling knife). This is possible for many pools but less likely for a rebalancing index by market cap where even a failure of a single asset in the index is not catastrophic.
Read 7 tweets
3 Oct 20
1/ Unlike nationalism which is acquired by birthright, digital identities are created at will based on common interests & values.

The free flow of ideas w/ the internet & now capital w/ crypto, inspires and enables us to move more freely & reorganize with those we affiliate with
2/ We’re seeing a fragmentation within countries.

New York is more alike London than Alabama. England and Scotland. North and South Sudan.

Yes, it’s in our DNA to affiliate with people that look & think like us. But the latter is becoming more important esp. among younger gens
3/ The key enabler here is a parallel non-sovereign financial system we call open, decentralized finance (DeFi).

Most think DeFi on the fringes. Make no mistake, it’s front and center allowing many to migrate more easily away from oppressive political & economic regimes.
Read 4 tweets

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