Thread by @lazyvillager1

1/ Hi all - I am making a new thread discussing @SnowdogDAO, @SnowbankDAO's acclaimed driver of millennial attention to yield, investment and crypto in a fun and engaging way. Similar to my 1st thread, model and financial analysis attached first

docs.google.com/spreadsheets/d…

2/ And actually - if you hadn't seen my previous post where I opined on the current landscape of t-backed coins - I would recommend doing so, even if you were an #OG reader. I have since added 12 new tweets on potential governance & innovation -

https://twitter.com/lazyvillager1/status/1461779826080198659

3/ Note: compared to my previous thread, this is not intended to be directional (BUY $IN!). I don't intend to be your advisor or teacher. I AM NOT AN EXPERT. I write tautological thoughts as a way to gauge CT reaction in sense checking my own theses. With that said, let's begin

4/ Firstly, I want to discuss the relationship between $SDOG and $SB. Upon $SDOG's stealth launch, we were told a few hours that they were 1-and-the-same. Surprising, to be sure, but for me - challenging to understand the economic rationale at first

5/ Why would a coin cannabiize its own market share and growth strategy by releasing a competing product? Both coins play on the concept of snow, both coins are on AVAX and both coins have similar suites of treasury products

6/ The rational investor with $100 of capital would therefore be indifferent between being in $SB vs $SDOG and choose the coin with better tokenomics / yield / profit-generating potential - and based on $SB's price dip post-announcement - this is what happened as capital diverted

7/ I then felt like I had seen a similar playbook - deja vu. @0xSmartCoin publicizing phases 1-3 as a yield-generating token with the intention of converting to a memecoin in phase 4. And with that parallel connected, I remembered this tweet:

https://twitter.com/0xSmartCoin/status/1459941000944697353

8/ And so the question becomes - why are these products undergoing a complete metamorphosis in business model? Is it just for marketing purposes? I think it is more than that -

9/ What I feel like is obvious - $SDOG was never intended to be a long-term t-backed coin. 1 - because of the competitive dynamics I mentioned earlier. But also 2 - I don't believe that it was to intended to target a "different" demographic as publicized

10/ How can a coin get traction in just a week's time of being a yield-generating token prior to meme coin conversion? Why not just start off as a meme coin linked to SNOWBANK?

11/ My conclusion: I think $SDOG is a two-pronged play designed to solve two problems. Firstly, absorbing and taking $TIME's market share as $SB's main competitor. By introducing another yield-generating token into the mix, yes - you cannabilize your own coin (SB)'s market share

12/ ...but you also take everyone else's. And if the goal is to stop being a yield-bearing token - then any pre-existing cannabilization disappears because $SDOG users are re-integrated to $SB as part of the same ecosystem

13/ SMRTCOIN, in fact, openly admitted to executing a similar brazen play in what they're trying to do with $JADE - "nabbing existing users on BSC and try to parlay them in joining them on AVAX." Same playbook.

14/ Secondly, and the most important - this play converts dilution into a driver of value. What do I mean by that? If you look at $SB's website right now - they offer a 385k % yield. $TIME offers less than 1/3 of that and $IN offers nothing near. How is $SB able to maintain this?

15/ Not only is this APY far from sustainable on a vacuum, it should have long ago been reduced to some fractional version of it. However, yield is in of itself both a market signal and marketing tool - and can be wielded as a weapon to displace the current incumbent - $TIME

16/ In the last 2 weeks prior to $SDOG releasing, I recall seeing multiple times on $SB's website negative bond yields - a clear indication of dilution - staking yields growing too fast for price and bonding (deferring supply) to keep up. This is where it gets controversial -

17/ I think $SB intentionally cannabilized their own product - diverting users into a second coin that they know they will later reclaim - to temporarily reduce staking load and yield generation for those who deploy capital in $SDOG. And in doing so, they maintain their APY #s

18/ And when $SDOG converts into a meme coin and the original shifters return to $SB, demand will peak, and prices will rise for the non-transitory tokenholders. And for the incoming yield generation that was originally offset?

19/ It returns, but it returns bearing gifts. $SB places $SDOG in its treasury, therefore capturing the latter's entire market cap as effectively collateral to trade up against what was previously unsustainable

20/ This is dark arts. Alchemy. But it's absolutely genius.

21/ And with that out the way - let's talk how the buy-back will affect $SB tokenholders. I've done a pretty elaborate write-up w/ notes integrated (I have a legend for formatting this time) so not going to speak too much on it here, but...

22/ I find it challenging to believe that price will appreciate 20x based on the prevailing notion of how the constant product equation works. It just doesn't resonate with me. I'm very open to being wrong on this though, because I'm no expert

23/ Ultimately even I end up being wrong on this, I would think the majority of this analysis is still useful because it focuses on charting out what pre buy-back circulating supply, and therefore price will be, which can plugged into @greypixel_ 's calculator

24/ In a nut-shell, I think there's definitely room for modest upside until ~$3,000 (again, assuming the buy-back works in a traditional way). Let me know what you think - drop a follow if you enjoyed reading this, and comment something that you'd like me to write about next!

25/ (11-22 Update)

I have since made some revisions to my original analysis by adding in a severe downside case. I am more neutral in my position since, with a median price target revised downward to approx. $1,700-$2,100 (incl. buy-back)

26/ (11-22 Update)

A few reasons I wanted to add a severe downside case:

Step 1: As the buy-back occurs, t-backing / c-share should fall (row 61) as treasury proceeds are being depleted...

27/ (11-22 Update)

...Step 2: If I am correct that treasury multiples drive valuation / market cap, then market cap should fall as a proportion of that, which has recursive impact on the following block of buy-backs

28/ (11-22 Update)

...This assumes the buy-back happens in blocks and not all at once. That's why this is a separate case. I've also adjusted my pre buy-back MCAP / Treasury in my severe downside case (row 65)...

29/ (11-22 Update)

As there would theoretically be no reason for a premium to exist upon meme coin conversion (prior to buy-back). I've also incorporated a larger exit of market participants to account for panic sells as SDOG price decreases (row 66)

30/ (11-22 Update)

However, looking back at my total circulating supply calculations since my original model on 11/19, I'm pretty happy as current circ. supply of ~73,000 matches pretty closely to my projected values between final day R2E-R3E...

31/ (11-22 Update)

This gives me confidence in the validity of my assumption inputs. What is yet to be determined is exactly how the buy-back will function - again, rosier projections by @greypixel_ and others have $SDOG exploding upward, but under a more traditional lens...

32/ (11-22 Update)

I have a much more conservative estimate of where things can land (row 40). As a reminder, my thoughts on this controversy of the mechanic can be read rows 92-129. To summarize, if @greypixel_ projections are right, then...

33/ (11-22 Update)

This means two things:

1. Market participants are acting irrationally, and have been for the entire duration of the coin, as the majority of individuals are not pricing the buy-back correctly (including myself)...

33/ (11-22 Update)

2. A significant amount of value will be destroyed, the losers being LP owners and post buy-back owners that do not manage to sell off $SDOG memecoin in time prior to significant price impact / slippage

34/ (11-22 Update)

I had been holding some $SDOG to have some skin in the game but again, to put my money where my mouth is, I have now exited out of my position. DYOR. I still acquit the possibility of me being wrong but I don't want to be part of this coin flip...

35/ (11-22 Update)

... I can be in $RUG instead or a dozen other small-cap DAOs if I want to scalp intra-day profits... again DYOR. I do have to say though, co-signing @PostFlashloan as one of the funniest people on CT