Thinking out loud🧵on #Bitcoin DeFi

I'm a Bitcoiner first and foremost. It's the economics, scale of problem, and hunt for a better world that keeps me here.

Hold handful of alts in size ( $DCR, $ETH, $COMP, $STX) and have used a good whack of Ethereum DeFi and NFT markets

I've spent a good chunk of time studying many facets of the technology, from scaling, to economics, to incentives.

I think I've a fair + reasonable grasp

Despite being long $ETH, I dislike immensely the 'financial engineering' of monetary policy

Gas or money --> Choose one
Base layer hard money needs PoW security and sound governance. Either rough consensus in $BTC, or formalised in $DCR.

PoS I simply can't see being decentralised consensus Long-T and thus = bad money. Too many examples of wealth concentrating wealth.

Finance layer, PoS is ok
Even after using many DeFi protocols, I really only ever find the following useful:
- On-chain settlement/SOV
- Lightning as payments
- Maker + Compound for borrow liquidity
- DEX to swap, but im ok with C.Exchanges

Those tools are analogous to what I use in meatspace too.
I've not seen a good example of why DeFi protocols require a token outside raising capital.
Need to pay bills.

Unfortunately, this is how VC's make ROI.

I align much stronger with:
Free market --> LN+RSK
Decred Treasury-->DCRDEX
Stacks --> Reg A+
Brink -->Funding $BTC Devs

With all that said + having used Maker/Compound for years, do I feel compelled to keep using it? Even if ETH 2.0 scales fees down?


All I need is the tooling to collateralise my $BTC/ $DCR + borrow against it

I believe these will actually get built for native #Bitcoin
Whether via LN, RSK, Liquid, Stacks, or another, I do believe the cream of the DeFi crop can be replicated on #Bitcoin layers

The key for me is security, stability and resistance to capture. I don't need turing completeness, I need assurances.

Protect my🌽 at all costs.

The switching cost for me is not FROM ethereum/Solana net effects.

The switching cost is making me confident enough to deploy my $BTC. That is a huge hurdle and financially engineering the base layer is a no go.

I'm sure I'm not the only Bitcoiner who feels this way either.
In short, I would rather continue to exercise low time preference and wait for the correct DeFi layer to emerge.

I never used to feel this way, but using Stacks has increased my confidence in DeFi layers built for #Bitcoin, and it will probably shock quite a few people.

Mobilising dormant on-chain native $BTC is the killer app.

When you start seeing HODLer $BTC moving into a DeFi layer at scale, that is when you need to pay attention.

This is a game of🌽confidence, and $WBTC just ain't it.

There is a reason #Bitcoin remains top dog.
I'm always studying, but this leads me to believe the following are likely undervalued solutions:

- $BTC is always undervalued
- LN is an awaking giant
- $DCR + DCRDEX + StakeShuffle = critical infrastructure
- Stacks is very intriguing, feels robust, still early

P.S no real point to this thread, just getting ideas out.

Ever since EIP1559, my view that Ethereum has any long-term moat has declined dramatically. Always been sceptical, but that upgrade was extremely short-sighted+unsound imho

Thus I am researching #Bitcoin DeFi more deeply

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More from @_Checkmatey_

3 Mar
The #Bitcoin Taproot🌱Activation debate is fascinating to see it play out. Given it is quite a complex topic (Bitcoin governance), let me lay out how I see it and my perspective.

I may have elements wrong but this is my current and best understanding.


The Taproot soft fork implements Schnorr signatures and additional output scripts that enhance privacy and functionality, especially for lightning and multi-sig setups.

Overall, the code is widely regarded as uncontentious, well constructed, reviewed and high quality.

Code is fine, but how do you activate in a PoW rough consensus?

The goal is to have the whole network running compatible code, miners in particular, to avoid any chain-split potential.

Four key groups:
- Miners
- Core devs
- Economic Nodes (exchanges etc)
- Users
Read 10 tweets
12 Feb
@LindenJohan @kenoshaking Right now, how do we get to green tech? Government subsidies because it is expensive and underdeveloped.

Bitcoin mining is EXTREMELY competitive. You a 1 cent per kWh more expensive than the other guy, you are going out of business. It is cutthroat

@LindenJohan @kenoshaking Now where is the cheapest energy?

Stranded (unuseable)
Wasted (overbuilt hydro, gas flaring etc)

The best miners will setup + innovate on the above. They create a DIRECT non gov subsidised incentive to setup green, wasted or stranded energy capture and price out fossil
@LindenJohan @kenoshaking What most critics fail to do is consider the problem beyond 'it uses lots of energy'.

Human have NO SHORTAGE of energy. We simply lack storage and TRANSPORT capacity over long distances.

Lots of energy, cant move it.

So we build energy near populations (consumers)
Read 6 tweets
9 Oct 20
0/ It has been a hot minute since I let loose my thoughts on #Decred. Combination of taking a break from CT and life throwing lemons.

Enjoyed watching community and stakeholders engage and keep up the discussion

But an on-chain tweet-storm is long overdue!

Seeking Conviction👇
1/ Start with the big picture.

DCR/BTC price has been absolute carnage...

..but we have been here before.

You see Decred is primed to become an oscillator, outperforming BTC in bull markets and underperforming in bears.

The stakeholder block subsidy line is at fractal phase 0
2/ When looking for stakeholder conviction, I use the 142-day metrics. These sample the entire ticket pool and looks as far back as late May.

The Strongest Hand metric.

This shows conviction as measured by DCR volume into tickets.

It oscillates between conviction + uncertainty
Read 9 tweets
24 Aug 20
1/ Very pleased to release my next research paper, focusing on the Mining Market Mechanics for #Decred

This was a fascinating study looking at the history, distribution behaviour and performance of the networks largest compulsory seller

Summary thread👇…
2/ Decred launched into a developed 2016 GPU mining industry where it was dual mined by Ethereum miners.

A study following PoW mined coins supports anecdotal evidence that GPU miners dumped en mass 80% of their DCR.

Chart shows % of DCR income sold (solid) or hodled (dashed)
3/ Conversely, ASIC miners have invested around 25-30% into tickets. This trend has stabilised (yellow lines) showing that Decred miners have serious skin in the game.

That said, profitability has been challenging to obtain and as the next tweets show, few managed to break even.
Read 13 tweets
7 Apr 20
Time for a #Decred On-chain Update!

There are so many bottom formation + undervaluation fractals at play for #Decred.

This thread covers some of the highest conviction on-chain metrics and the impressive alignment of direction.

Generational confluence on-chain.

Strap in 👇 1/
Miners: As covered in my last research paper, PoW $DCR miners have endured challenging conditions.

With unforgeable costs, PoW miners are known to 'Put the Bottom in'.

The cumulative PoW reward paid (USD) has entered a generational low fractal alongside difficulty squeeze.
The Puell Multiple measures the current USD PoW income against the yearly rolling average.

Miners are long term thinkers and when incomes are challenged, the weak switch off their mining rigs and the reward coins are distributed to the strong.

This constrains supply.

Read 9 tweets
17 Dec 19
1/ An overview of where I see the #Bitcoin market right now. I prefer to use simple yet robust probabilistic methods.

Four Moving Averages have continued to show relevance to #Bitcoin over it's trading history.

#Bitcoins Magic Lines
- 128DMA
- 200DMA
- 128WMA
- 200WMA
2/ Magic Lines
128D MA is a classic Buy the Dip / Sell the Rally.

200D MA is a Strong BUY/SELL unless crossed, then bias must flip. Right now, this is bearish.

128W MA is accumulation signal when below, similar to the Realised Price.

200W MA catches the bottom wicks of bears.
3/ Based on this, our bias is bearish (under 128D and 200DMA).

However, price has just dipped below the 128WMA signalling accumulation.

Fundamental support is below in the Realised Price ($5600) and 200WMA ($5000), what's $1000 between mates.

Smart money is waiting down here.
Read 6 tweets

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