🧵The Ethereum ETF is going to be way more reflexive then the BTC ETF.

I expect it to have a much larger impact on ETH price and be extremely positive for Ethereum based altcoins.

TLDR - The ETH ETF is about to bring a massive alt season which the BTC ETF did not deliver on Let's walk through the reflexive cycle:

1 - Ethereum ETF approved ✅

2 - $ETH price goes up in anticipation of flows + actual flows ✅🕒

3 - An increase in ETH price directly increases TVL across all Ethereum DeFi + creates a wealth effect among ETH holders

Lets debunk this $GMX FUD quickly:

1) Zero Slippage --> currently a non-issue for BTC and ETH given GMX's liquidity/OI caps vs CEXs

With Synthetics, zero slippage is being phased out and GMX's oracles will apply spreads from aggregators and orderbook depth of top exchanges.

https://twitter.com/hodlKRYPTONITE/status/1597158471312760834

2/ The second point relates to crypto dropping and traders on the platform being net short.

Firstly GMX has been live for over a year and the market has been down only since, and guess what?

GLP is +$40M from trader losses and has scaled to >350M in total liquidity.

1/ Time to address some $GMX FUD.

Recently a large trader took advantage GMX's zero slippage pricing on AVAX during a low liquidity weekend.

This limitation of GMX has been well known and established by myself and others many times.

It also has some very simple fixes. 2/ Firstly lets walk through GMX's oracle pricing model along with its pros and cons so we can fully understand the tradeoffs it makes.

IMO the tradeoffs are well worth it and have lead to GMX being the most successful DeFi leveraged trading exchange.

1/ Updated macro thesis from when I went on @UpOnIyTV in June 2021.

We did indeed see lots of inflation and the FED's response was rapid tightening that caused Crypto to crash.

Within 4 months I think the FED will be forced to pivot and resume QE. Sending BTC & ETH much higher.

https://twitter.com/FloodCapital/status/1402048594765561858

2/ Back to first principals, lets examine the US fiscal situation.

Debt/GDP surged during COVID and currently sits at 123%, levels we haven't seen since WW2.

But the US has successfully managed to de-lever from the COVID peak of 136%, how did they manage to do this?

1/ Manifold $FOLD is aiming to be one of the main block builders in POS Ethereum.

Block builders will be KEY pieces of infrastructure in Ethereum's future and have a strong positive feedback loop to help them create a moat and maintain their advantage. 2/ First lets take a look at the effects MEV will have on ETH after the merge.

1. Validators want to collect the most amount in fees/MEV in order to offer the highest staking rate on their $ETH. This incentives validators to pick the highest value block created by builders.

1/ $GMX is currently #4 on the crypto fees leaderboard, 30% of those fees go directly to GMX stakers!

GMX is currently trading at a ~8.2x P/E (at $41 GMX).

Lets discuss how @GMX_IO unique design is able to satisfy all major stakeholders: Traders, LPs, and $GMX stakers. 2/ Firstly Traders.

GMX is available on both @arbitrum and @avalancheavax, it allows traders to trade BTC, ETH, AVAX, UNI and LINK with 0% slippage, a 10bps fee, and up to 30x leverage.

With 0% slippage and a flat 10bps fee, GMX can offer very competitive execution on trades.

1/ No doubt the Merge is going be massive for ETH, likely turning it net deflationary with an initial yield of 7-9%. (not including MEV which could juice yields even higher)

But I think looking at 2nd and 3rd order effects are more interesting and can often be a source of alpha. 2/ The obvious second order effects are for liquid staking providers like @LidoFinance $LDO and @Rocket_Pool $RPL.

Especially when you factor in the ETH validator queue that, given a jump in yields, could be months long.

Check out this chart from @downingARK

1/ The Anchor Rate

We all know a 20% rate with uncapped deposits is impossible to maintain forever.

Q: So why hasn't the rate been lowered?

A: Because its allowing UST to re-collateralize.

Time for a thread🌕 2/ Right now stablecoin rates across Aave and Compound are 1-3%.

Relative to the market Anchor's 20% yield is at an all time high since it launched. (7-20x market rate)

This has generated a TON of demand for UST with Anchor deposits growing >100M a day since February.

1/ @DegenSpartan + other yield farmers take a look at this.

42% natural APR from trading fees because assets in GLP collect from:

1. Margin trading volume
2. Funding fees
3. Spot swaps

Biggest risk as an LP is paying out if traders are profitable on the platform.

https://twitter.com/0xAppodial/status/1502517202108485632

2/ You can monitor all of GMX's stats here: stats.gmx.io

This chart below shows trader PNL over time - historically they have lost money. Leverage trading is hard.

1/ To celebrate $LUNA ATH, for the next 48hrs @Delphi_Digital is offering a 20% discount on our Insights tier using the code "TERRA" + free access to our latest PRO Luna report.

To understand this rally and learn everything related to LUNA keep reading.

members.delphidigital.io/reports/mappin… 2/ Stablecoins are the backbone of DeFi:

1. Transfer money in a frictionless and cost-efficient manner.

2. Convert speculative crypto assets into a stable alternative.

3. Participate in the high yields of DeFi without taking on the volatility of floating tokens.

1/ It's hard to HODL.

Investor memo from Howard Marks (Co-Founder at Oaktree). Just picked out a part I thought was great:

[Long-term investors have an advantage over those with short timeframes (and I think the latter describes the majority of market participants these days). 2/ Patient investors are able to ignore short-term performance, hold for the long run, and avoid excessive trading costs, while everyone else worries about what’s going to happen in the next month or quarter and therefore trades excessively.

1/ $GMX's @avalancheavax launch analysis

Lets take a look at how @GMX_IO has already done $1B in volume, $1.25M in fees and attracted over $45M in liquidity on Avalanche in just 12 days.

GLP on Avalanche may be THE most efficient pool in all of crypto. 2/ Firstly, before I get into why GLP is so efficient, a quick recap on GLP.

GLP on Avalanche is a basket of assets with fixed target weightings: 25% AVAX, 20% ETH, 15% BTC, 25% USDC, and 15% MIM.

The assets within GLP are used for spot swaps and leverage trading.

Just read this amazing article by @shanav_m

Derivatives is one of the sectors I am most bullish on for 2022. Expressing this view via $GMX and $DPX.

"As a yardstick, crypto options volume as a % of spot is ~2%; in US equities this number is 35x"

jumpcrypto.com/state-of-crypt… Why crypto options have previously struggled, and now the solution.

1) High ETH transaction fees & slow block times
--> Solved by quicker L1s and L2s

2) Delta Hedging Option Writers
--> This can be solved by perp and option platforms working together

1/ Thread on my favorite projects for 2022 (no particular order)

$GMX – Derivatives & Spot Swap DEX
$SYN – Best Bridge I’ve Ever Used
$DPX – Decentralized Deribit

Good alts can outperform BTC and ETH even during market weakness.

Chart below indexed to Dec 4th open, ~54k BTC. 2/ The following thread is meant to hit the highlight reel regarding each of these projects.

In reality they all deserve their own dedicated thread or even longer form post, which I will tweet out.

1/ The objective in crypto is to survive and outperform BTC & ETH.

In my opinion this is accomplished through one thing, conviction.

Thread on conviction and how I choose and invest in projects. 2/ Conviction allows you to hold to 100x, it also allows you to hold through massive drawdowns.

Yet there is a difference between blind faith and conviction.

Constantly re-evaluate your theses, if new information presents itself then you have the ability to change your mind.

1/ Wen @GMX_IO + @dopex_io official partnership?

There is a MASSIVE opportunity to mutually benefit both platforms by using GMX perps to automatically hedge Dopex's upcoming option pools (think decentralized Deribit)

Quick thread on why this is important: 2/ A big hurdle for the growth of DeFi options is capital efficiency.

When MM's sell options, they look to delta hedge as they do not want to be exposed to the direction of the underlying asset.

1/ Decentralized options within crypto is one of the use cases I can easily see becoming bigger than the centralized alternative.

It simply boils down to accessibility.

In tradfi you can get anything designed for you, but only if you have enough money. 2/ Through DeFi the possibilities for different vaults and structured products are endless, you just need to source the liquidity and pricing, this becomes much easier when products are available to everyone.

DeFi in itself opens up infinite possibilities for new markets.

UST has grown its dominance from .67% to over 6% in 2021 with barely any exchange listings and only 2 main apps, Anchor and Mirror.

Given this growth in 2021 and upcoming catalysts, 150% growth in 2022 isn't unreasonable.

Meaning $UST at 23B EOY 2022.

So what are the catalyst? #1 Development of TeFi

Some notable applications:

Sophisticated DEX @astroport_fi
(Think Uni V2, V3, Curve and Balancer)

Money Markets @mars_protocol
(Think AAVE and Compound)

Leverage Trading @Levana_protocol

Comparable apps on Ethereum have 10's of billions in TVL.

UST grew its market cap by 50x in 2021.

With 150% growth in 2022, UST would reach a market cap of ~$23B, meaning an additional $13.8B in $LUNA burning. UST's growth strategy is two pronged:

1) Exporting itself as the most useful and decentralized stablecoin across all layer ones.

2) Building out the only TRULY decentralized finance ecosystem on the Terra chain.

1/ Thread on @GMX_IO (originally a @Delphi_Digital report)

GMX is a perps and spot exchange on Arbitrum with plans to launch on AVAX in the future.

GMX has a revenue run rate of $57.3M per year, 30% of which goes directly to GMX stakers.

Meaning GMX trades at a ~16x P/E ($38) 2/ GMX uses GLP, a basket of ETH, BTC, LINK, UNI, USDC, USDT, and MIM to facilitate margin trading and swaps on the platform.

Swaps are executed based on pricing from @Chainlink @FTX_Official & @Binance allowing GLP to offer zero slippage swaps and low fees.

3 ways to on board hundreds of millions of crypto users:

1) Financial Speculation

Making someone rich increases the chances of them sticking around.

https://twitter.com/zhusu/status/1462736949999849472

2) Gaming

Gaming seems like the next logical step, think about WoW, Runescape, CSGO all with the in game economies truly designed for peer to peer commerce.

These games are coming but it is important that they are top tier so this will take a while to build out.