A 🧡 on the $ETH Merge - one of the largest and most misunderstood upgrades crypto has ever seen during its existence. πŸš€

In this thread I lay out the bull case for why I think the Merge may defy the awful macro backdrop and why most are missing the forest for the trees. πŸ‘‡
The Merge will bring with it significant changes to Ethereum - the most obvious being the move from PoW to PoS.

I won't spend much time here, but realize that the energy and ESG narrative will be profound in mainstream media.
The significantly more interesting topic of discussion is around the changes of the structural flows due the Merge.

I'll try and simplify this to the best of my ability, as I think this is not well understood by 95%+ of CT.
Structural flows cannot be front-run. It simply doesn't work. In ETH's move to PoS, issuance and sell-pressure (important to note these are two different things) are massively reduced.

You can't front-run that - not for a longer period of time anyway.
In its current PoW state, most of ETH issuance goes to miners.

Around 15k tokens daily.

By most estimates, miners insta-dump approx. 85% of their rewards for operating expenses and profits. This is around 12,750 tokens PER DAY.

~$20M in structural sell-pressure daily.
In a PoW design this is inevitable.

That's to say that this will always be a problem with BTC, but no longer with ETH - starting tomorrow.

Incredibly exciting - but that's not all!

With PoS, issuance is estimated to drop by around 70%.

From 15,000 -> 4500.
This alone would be massively beneficial, as the supply side is getting severely reduced. Forever.

The remaining rewards are distributed to ETH stakers. People that own ETH, stake it and want more.

Will they insta-dump rewards?

Doubtful. There are no mining costs to cover.
The cherry on the cake is that for the first months post-Merge, stakers can't even withdraw their staking rewards.

This means that immediately after the Merge, ETH issuance drops 100%.

In the long-term, approximately 90%.

This is where the term triple-halving comes from.
So imagine an environment where ETH is relatively stable - supply and demand match. That's the current scenario.

Starting TOMORROW, the structural supply side pressure gets almost entirely wiped out.

ETH will have to have $20M of sellers daily for the price to NOT move up... Image
(above is from @NorthRockLP)

Importantly, ETH issuance is token notional instead of FIAT.

ETH at $3K will yield significantly higher USD yield than it does now.

In a PoW model, the $ value of pressure on price from miners would be higher as well.

Gone starting post-Merge.
ETH will also now have a native yield tagged on to it - a massive driver of both retail and institutional interest.

Green narrative + native yield + a safe network + lack of sell pressure = REFLEXIVE demand.

So to sum things up...
A massive structural supply flow gets wiped out effectively immediately, while ETH as an asset multiplies in attractiveness.

I believe that this will create a slow grind up that will create one of the biggest narratives of Q4'22 and entirety of '23. A reflexive force. πŸ“ˆ
Halvings are rarely instantly bullish in terms of PA. Don't expect god candles.

But over time, the structural change will chip at the chart.

Day-by-day, the demand side will overpower the supply side due to the changes introduced by PoS, creating an explosive narrative.
Expect volatility post-Merge - could be that way for weeks, but long term I do not see a future where Ethereum as an asset doesn't overperform by a long shot.

As usual, NFA, DYOR and good luck everyone.

Today is a historical day for crypto. πŸ™πŸ»
Also a big thanks for @NorthRockLP for influencing my thinking around the Merge - I've taken a lot of inspiration from your articles and feed.

While the timing was off, I believe this is the best article ever written on the Merge: medium.com/@halp1120/1-th….

β€’ β€’ β€’

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with Mesky (πŸ’Ž, πŸ’Ž)

Mesky (πŸ’Ž, πŸ’Ž) Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @systems_value

Apr 12

On @dopex_io's SSOV3 and marketing. πŸ’₯

If you follow the Dopex ecosystem, you should be pretty familiar with SSOVs by now. It's the flagship product and an incredible tool to onboard options newbies.

It just got 10x better (not exaggerating).

Lets dig in! πŸ‘‡
We'll be dedicating this thread entirely to explore the implications and possibilities that V3 enables with a side of marketing - so if you're new to the ecosystem, please check out my Dopex megathread below to get up to speed.

Now on to V3...

To better understand the problems V3 solves, we need to start where SSOV has previously fallen short. Despite being a fantastic product, it's not without its shortcomings.

Mainly critique has revolved around long epochs, inflexible deposits and lack of secondary markets.
Read 19 tweets
Jan 27

This is meant to act as an extremely accessible resource for newbies and veterans alike on all things @dopex_io.

It includes tokenomics, team led by @tztokchad, broader DeFi implications, SSOVs and Atlantic Options.

Let's dive in! πŸ‘‡

I'll be dropping these threads in chronological order to ensure that anyone just finding $DPX can follow along. I'll be adding here as I create more content.

First off is an intro to $DPX and their flagship product - SSOVs.

Second is a thread on the economics of $DPX and SSOV. Important to note that some assumptions regarding fees (mainly the premiums) have changed since writing this thread, but there's valuable info in here regardless.

Read 9 tweets
Jan 26
A 🧡 on @dopex_io newest product reveal - Atlantic Options. A truly groundbreaking release that will profoundly change DeFi.

In this thread I’ll tackle the basics, use-cases and most importantly implications of this.

Lightbulb moment for DeFi. πŸ’‘πŸ‘‡πŸ§΅
At its very simplest, Atlantic Options allow collateral used to write options to become mobile and be used for multiple purposes at the same time. Imagine being able to use ONE source of collateral to farm, sell puts, lend and buy dips.

You can do this VERY soon.
Atlantics have fixed expiries similar to European options. The difference is that the collateral used in the option can be moved out by depositing the underlying token. When this is done, a funding fee gets paid to the option writer.
Read 15 tweets
Jan 14
Small 🧡 to share my thoughts on where $DPX is going. If you're just following along lately you'll have noticed the violent re-rating in price over the past few weeks as CT and retail slowly close the perceived value-price gap.

That said, this is only the beginning. πŸ‘‡ 1/8
By the day it gets clearer and clearer as the development of the project advances and the community grows that $DPX will be the project that delivers on-chain options.

What happens when that winning position in the on-chain options race becomes clear to everyone? 2/8
In business, when white spaces (in this case on-chain options) get filled in the market the winner tends to get a disproportional amount of market share.

In other words, winner takes all. The TAM of on-chain options is massive. 3/8
Read 9 tweets
Jan 5
Time for another $DPX & $rDPX thread. Alpha streaming straight to your timeline, this time from the big man @tz_binance.

The most prominent alpha leaker on Twitter just dropped some heat.

I'll be explaining it as clearly as I can w/ examples.

I'll be attaching the original tweet to the explanations for clarity, starting with tweets 1-3:

SSOVs were chosen as the first product because of their simplicity. Simplicity attracts users who become proficient and most importantly profitable...
becoming evangelists and devoted users for the platform. This creates 1) people who love the platform and tell their friends who intuitively know how to use the platform as well -> mega network effect.

2) Very sticky TVL, unlike other platforms that are incenticized by tokens..
Read 15 tweets
Jan 1
πŸ‘ ALPHA THREAD ON $DPX @dopex_io REDACTED VAULTS AKA Interest Rate Options.

In this thread I'll be breaking down the implications of $DPX latest plans on how they're CHANGING the on-chain options game.

Without further ado, let's get to the good stuff... πŸ‘‡
If you're unfamiliar with $DPX, quickly gloss over my most recent thread to get up to speed here:

Promise you it's worth your time - plus it's gonna help you understand the next ten or so tweets.

Personally so bullish IT HURTS.
To kick things off, a brief overview - $DPX revealed their groundbreaking interest rate options vaults under 24 hours ago. If you're reading this, consider yourself lucky - you are VERY early anon. Pays to be early.
Read 17 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!


0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy


3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us on Twitter!