1/ Consider this when trying to call tops on tech cycles:

> Web2 was much different than Web1. Software as a service (SaaS) lowered costs for startups to scale by shifting capex to opex

> Web2 also benefited from massive infra rollout & smartphones (big for social & e-commerce)
2/ Web3 improves Web2 as it creates a stronger incentive and value capture layer for open source development

> Devs and creators will favor building on Web3 systems as they provide better economic opportunities & guarantees: Read, Write, *Own*

Most don’t own content in Web2
3/ Learning from prior tech cycles is instructive but can blind you too. Narratives can outpace fundamentals but, over the long term, tech will continue to surpass “analyst” expectations because innovation delivers compounding and non-linear effects which are hard to predict.
4/ We’re living in precedented times of creative output. Web3 is unlocking lot of friction & new value capture mechanisms. It’s facilitating more fluid collab/coordination of talent & capital. You’re finally seeing info (Web2) & capital (Web3) move globally at speed of light 💸⚡️
5/ Web3 fulfills the original vision of the Internet by creating a value capture layer for peer-to-peer interactions. It doesn’t stop with Bitcoin, DeFi or NFTs. My imagination doesn’t stretch too far but I just sense there’s a tsunami of creative and economic output coming 🌊

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More from @santiagoroel

16 Dec 21
I'm not a maximalist. I believe in a multichain world serving many use-cases where aggregators route to most efficient chain. @LayerZero_Labs interesting as fabric that enables it

Security & decentralization are spectrum not end state. Aggregators will value this more than users
Ethereum - captured mindshare of developers. L2s (Arbitrum, Polygon, Optimism) are here and viable scalability solutions. zkRollups (Starkware, zkSync) very promising

Solana - impressive ecosystem. Dev tooling improving. BD push attracting new developers/projects. Expanding pie
Terra - perhaps most use-case oriented chain. Started with stablecoin to power e-commerce, acquire users and then expanded to savings (Anchor) and investing (Mirror). Reminds me of how weChat expanded from social. Growing ecosystem. Regional exposure to fast growing markets
Read 6 tweets
15 Dec 21
There are two kinds of errors: process & outcome. Focus on fixing the latter. Systematically diagnosing and learning from errors of process is the only thing you have true ownership over & creates winning results that compound over time.

What are errors of process? 👇
It’s the things you could’ve done differently. Obviously attribution is a problem because you may think correcting x, fixes y. But pattern recognition helps. If you’re making poor choices when you’re sleep deprived or around certain people, then that’s something you can fix.
Write down the specific conditions under which you’re operating under. Time of day, food you eat, people you’re around, things you do (and don’t), and that likely sheds light into processes (habits, frameworks, conditions) that lead to successful/poor outcomes.
Read 5 tweets
27 Sep 21
1/ Web3 games will dominate. Here's some data. Of note:

@AxieInfinity is on pace to generate ~$1.4B in 2021 revenue, up from ~$80M in 2020. @SkyMavisHQ, studio behind Axie, is 3 years old w/ 61 employees making it arguably the fastest growing & most capital efficient game studio
2/ The impressive growth of Axie is, in large part, tied to novel play-to-earn (P2E) mechanics which, much like ride sharing apps, has become a primary source of revenue for gamers across the world. P2E combines digital asset ownership w/ the passion economy empowering users
3/ Another impressive metric is retention. Games struggle with two things: initial bootstrapping of users and retention. The latter is known as half-life and most game studios need to constantly put out new game hits to counteract this phenomenon (Zynga case in point). Not P2E...
Read 5 tweets
21 Sep 21
If CryptoPunks were a protocol, what mkt cap would you give it?

Few data points to inform your choice:

> ~$780M realized market cap (aggregate of last sale prices - h/t @coinmetrics)
> 15% have never moved wallets
> Brand value?

I’m biased obv but curious 🤖
Valuing brands is difficult. But here’s some context on brand value:

Source: interbrand.com/best-global-br… Image
At 10B, punks brand would be worth about the same as Starbucks. At 5B, just shy of Ferrari. Again, this is just one subjective valuation by Interbrand.

But my thesis is that some NFTs will capture & accrue a lot of value as they become essential parts of our digital identity
Read 4 tweets
21 Sep 21
1/ We need to design better token mechanics of DeFi protocols. Specifically, tokens used for insurance/managing protocol risk (AAVE, PERP etc). Problem w/ current designs is correlation. If protocol insolvency, value of collateral token drops wiping out insurance fund. Solution?
2/ DeFi insurance solutions suffer from correlation risk. Risk increases as DeFi is tightly integrated and composable (you’re only as strong as your weakest link).

Current solutions try to contain risk by isolating it thru silos (Kashi) or capping aggregate exposure (Nexus)
3/ One idea to improve the security module of @AaveAave is to diversify the insurance pool. But how do you do this gracefully without dumping Aave for a basket of uncorrelated tokens?

One way is thru options. Strat could be: sell calls, collect premium, build stables reserves
Read 5 tweets
30 Aug 21
1/ Some thoughts on portfolio construction (each section expanded below):

> think in probabilities
> think in risk units
> don't forget about duration
> don't fall in love with positions
> have entry/exit strategy
> don't try to be a hero
2/ Think in probabilities:

Position sizing should be based on probability relative to another asset/theme.

Example: What is the probability Solana surpases Ethereum? Likely not zero or 100%. If probability is x%, then size SOL relative to ETH according to x
3/ Think in risk units:

How many incremental risk units are you taking by investing in x vs. y, where y is inherently lower risk or beta.

Example: investing at the dApp layer is a levered bet on a base protocol. Factor in illiquidity, execution and technical/dependency risk
Read 7 tweets

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