Founder & CIO of @CyberCapital Europe’s Oldest Cryptocurrency Fund, full-time crypto researcher since 2014. My words are my own & are not investment advice.
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May 17 • 96 tweets • 17 min read
1/96) Scaling a blockchain exclusively with L2s is a terrible idea:
Horrible UX due to fragmentation, terrible economics & worse trust trade-offs!
Pushing users into centralization & ultimately into scalable L1 competitors!
That is what makes "L2 scaling" a losing strategy:🧵
2/96) L2 Centralization:
Arbitrum, Optimism, Base, Blast, Mantle, Starknet & ZkSync all have admin keys!
This means they can steal all users' funds right now; this is true for all of the top L2s...
If this is considered safe, then we might as well go back to legacy banking!
May 9 • 21 tweets • 4 min read
1/21) NEAR can scale to meet global demand with sharding!
There are six shards delegated to 467 permissionless validators now 🔥
The cutting edge, working on stateless validation & dynamic load balancing!
ETH & SOL better stay sharp as NEAR will eat their lunch otherwise: 🧵
2/21) Even though NEAR sharding is not fully implemented
As all validators still validate all shards, it can still exceed 1k TPS, keeping up with SOL!
In a few years, as the roadmap comes to fruition, NEAR will likely be able to exceed 100k TPS
That is the power of sharding!
May 2 • 16 tweets • 5 min read
1/16) SUI has a great design, except for its token economics:
SUI claims to have a capped supply of 10B, with 52% being "unallocated" till 2030
The problem is that over 8B SUI is being staked right now!
Over 84% of the staked supply is held by founders! SUI is centralized: 🧵
2/16) The founders control the MAJORITY of supply without lock-ins & ZERO legal guarantees!
The legal fine print protects them, as the truth is sobering
That is what makes the below chart published by the SUI foundation a lie:
The staked SUI implies there is no lock-in at all!
Apr 4 • 21 tweets • 8 min read
1/21) I used to be one of Solana's biggest critics
In this thread, we go over all my old critiques one by one & explore how SOL has changed:
Let me explain as we pivot for decentralization's sake:
2/21) Starting off with the fake usage numbers:
When I first called this out in 2021, there was very little real usage
This is why SOL claiming a 40k+ TPS at that time was a straight-up lie!
This is obvious now because SOL has, in fact, cleaned up its communication since then
Mar 25 • 15 tweets • 3 min read
1/14) According to the Ediborough Decentralization Index:
Cardano is by far the most decentralized blockchain in the world!
The EDI is an ADA-backed effort to measure decentralization...
Cherry-picking flawed methodologies has led to this preposterous claim. Do not be fooled:
2/14) The biggest problem with the EDI is that they count all pools as single entities
When in reality, pools are not single entities at all!
Pools represent groupings of stakers, who can easily leave
This is akin to calling a representative in a liquid democracy a dictator...
Mar 4 • 12 tweets • 3 min read
1/12) The crypto bull market has arrived; if you are new here; welcome
Feeling overwhelmed right now is normal; DON'T PANIC
Start by reading from my hitchhikers guide to cryptocurrency:
To help you navigate this mind-mindbogglingly vast universe of opportunities, scams & memes
2/12) In the beginning, Bitcoin was created
This made a lot of people very angry & was widely regarded as a bad move
As greed & fear have driven speculation to maddening heights of hypocrisy
We are in a boom & bust cycle; never forget that & also never forget to bring a towel!
Feb 19 • 18 tweets • 3 min read
1/18) What is decentralization & how do we really measure it?
We will rate BTC, ETH, SOL, XRP, ADA, AVAX & TRX at the end!
Too many falsely use decentralization as a shield to justify their mediocracy!
These six principles measure decentralization (the distribution of power):
2/18) 1. Validator distribution
Counting the number of nodes is meaningless, as there is no Sybil protection against node spam
What does matter is the distribution of unique validators (nodes involved in block production)
As they have skin in the game, whether PoW or PoS!
Jan 20 • 9 tweets • 2 min read
1/9) Dfinity sacrifices decentralization for scalability
Despite their lofty & outlandish claims, ICP is highly centralized & insecure
You can attack & censor ICP subnets by only attacking a handful of known nodes in data centers
The problem lies with ICPs consensus algorithm:
2/9) ICP has an extremely modular design, made up of independent subnets
However, unlike DOT & ATOM, there is no option for "shared security"
That means each subnet is responsible for its own security
This inevitably results in very low validator counts, endangering users:
Jan 13 • 23 tweets • 6 min read
1/23) ETH is still stuck at a meager capacity of around 100 TPS!
Core devs could easily raise the limit within a month
Instead, @VitalikButerin removed "increase L1 gas limit" from the roadmap!
While saying it can be raised "at any time"; this is false, deceptive & misleading:
2/23) The ETH core devs are choosing not to raise the limit
All while claiming it is not up to them...
A false abdication of responsibility as they conveniently shift the blame to the validators
The truth is that the politics & dynamics of ETH's gas limit are far more complex:
Jan 6 • 19 tweets • 4 min read
1/19) There are three approaches to scaling a blockchain:
2/8) ETH is pushing users into custodian L2s that can censor
This always happens no matter how good L2 tech becomes
As this is not a question of technology but of human nature
L1s scaling solves this by creating a unified shelling point; this is not possible with "L2 scaling"
Dec 24, 2023 • 9 tweets • 2 min read
1/9) As a value investor, I weigh usage & adoption highly
Consider that before questioning my integrity when it comes to SOL
As it now exceeds ETH on multiple fronts, excluding the inflated metrics
That should be celebrated if you truly cared & remained independent as I have:
2/9) As the fund manager of @cybercapital, I decide on investments
Since we are not a VC & the fund is fully liquid based on FA
There are no "bags" to defend, as we can change our minds within a week & switch positions accordingly
This happened with SOL & it will happen again
Dec 23, 2023 • 9 tweets • 2 min read
1/9) SOL has the same economic model as ETH
Yet many act as if it is dangerously flawed
The only major difference to ETH is that it has high capacity & therefore lower fees
All of this criticism around SOL's economics is nonsense; a 1.5% inflation rate is not a fatal flaw:
2/9) SOL inflation is currently at 5% & will drop down to 1.5% after another 7 years
This is a good & normal design for a modern cryptocurrency
So unless you have been criticizing ETH's economic model this entire time;
Going after SOL now, over this reeks of deep insecurities
Dec 18, 2023 • 25 tweets • 5 min read
1/25) Chainlink's use of admin keys has the potential to bring down most of DeFi!
LINK serves such a critical role in the DeFi ecosystem
That if those keys are ever compromised, it will cause a black swan that shakes DeFi's core!
That is the devil that hides in LINK's details:
2/25) As LINK admin keys can manipulate oracle pricing!
Allowing an attacker to leverage DeFi to take advantage of this "vulnerability"
Like going short or long to rip off bots, an attacker could literally steal billions!
This would crash the entire DeFi market in the process
Nov 28, 2023 • 9 tweets • 2 min read
1/9) BTC & KAS are dinosaurs
Parroting that PoS replicates the old world & only makes the "rich get richer" is nonsense
PoS has superior economics, security & decentralization while being more fair & equitable!
There is no good reason to use PoW anymore; it is outdated tech:
2/9) PoW is inefficient, wasteful & expensive
I covered all this in my article defending PoS (link below)
What I did not counter is the "rich get richer" argument, so I will do that here now
To steel man, the argument: It is about stake centralization:
1/11) Kaspa lacks key features that are critical for L1 blockchains
KAS has no Turing-complete smart contracts or PoS!
Chains without these two features are uncompetitive, no matter how scalable they are
KAS claims to be technologically advanced, yet it fails to measure up:
2/11) Good decentralized money requires good decentralized finance
What is the point of decentralized money if it needs centralized custodians to be properly utilized?
Finance is an inescapable aspect of this highly competitive free market
Without DeFi, KAS is uncompetitive!
Nov 17, 2023 • 19 tweets • 4 min read
1/19) ETH's "L2 scaling" roadmap is a dead end
The UX problems cannot be solved, as they are inherent to "L2 scaling"
Free markets guarantee fragmentation; breaking composability & destroying the UX
Usage will move to scalable L1s instead, which offer a far superior product!
2/19) There is no good reason to accept a scaling solution that puts most users at risk
All the top L2s have admin keys that can steal all user funds!
Including Arbitrum, Optimism, Base & ZkSync!
Cryptocurrency history teaches us not to trust mere promises of decentralization
Nov 10, 2023 • 16 tweets • 3 min read
1/16) Scalability comparison of all decentralized L1s in top 60, based on Transactions Per Second:
BTC= 7 TPS: No plans to scale at all
ETH= 119 TPS: No plans to significantly scale at all
SOL= 400+ TPS: Committed to scaling with parallelization & keeping up with Moore's law!
2/16)
ADA= 18 TPS: Input Endorses will bring this figure up to 400 TPS according to IOHK
DOGE= 33 TPS: No plans in place for further scaling (started as a joke & is still a joke)
TRX= 471+ TPS: No exotic scaling plans in place, but is still committed to on-chain scaling!
Sep 8, 2023 • 36 tweets • 8 min read
1/36) BTC's security model is broken
It has to double in price every 4 years for a century or sustain extremely high fees!
Just to maintain the present level of security...
Which is impossible, as it exceeds global GDP within 31 years
Therefore, BTC security is doomed!🧵
2/36) Each halvening exponentially lowers the security budget; until it is gone!
These halvenings continue after exceeding global GDP for another 80 years before running out completely
If you understand exponentials & economics, you should know that this is entirely impossible!
Aug 7, 2023 • 14 tweets • 3 min read
1/14) Worldcoin's token economics are horrible
Trading with only 1% of the total supply in circulation!
A predatory design geared to benefit VCs, not retail investors or users!
This will inevitably cause a massive price crash, hurting countless people & exposing their privacy:
2/14) Historically, such token distributions have always led to a massive collapse
Something these VCs surely understand
As ZEC, ICP & MAPS all serve as prominent examples of this dynamic
Most retail investors are unaware & buy the WLD token creating demand on a tiny supply!
Jul 27, 2023 • 12 tweets • 3 min read
The top 12 cryptocurrencies by market cap in 12 Tweets:🧵
1. BTC is an emperor that wears no clothes
It has no capacity, no long-term security, no predictable supply, no value proposition, no DeFi & no privacy
Combine that with dysfunctional governance & it is doomed to fail!
2. ETH is now the market leader in all metrics except for market cap
ETH is a massive improvement over BTC, but it still faces problems:
Its pivot away from L1 scaling is a huge mistake, giving room for competitors to overtake it one day
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