1/ melts and kaledora, sitting in a tree
talking about commodities

thanks to @EV3Research @MoneroMahesh @DAnconia_Crypto for hosting me and @kaledora @OstiumLabs for bringing the rizz

slides and commentary 👇 below the jump 2/ history of oil and what it can teach us about DePIN

standard oil - rockefeller started by horizontally integrating and rolling up refineries, and then realized operating leverage would come from controlling the upstream inputs and the downstream transport and retailing

1/ quick notes and data points from the discussion @kellyjgreer and i had at @PubKey_NYC last night

'tis the season of the most hated rally - bitcoin is ripping and macro folks are not happy about it

jamie dimon and elizabeth warren seem especially mad 😠 max cope incoming 2/ bitcoin pricing is driven by FLOWS

it's tempting to get lost in piles of analysis but as we'll discuss later on, the key to understanding is looking at open positions, trade volume, inflows and outflows

sentiment doesn't matter until it's expressed as a trade

1/ a short summary of a recent talk on silicon, satoshis, and superpowers

power in our world is changing. a decade ago, oil and gas companies and banks ruled markets. now it's tech companies and financialization runs rampant (>100x P/E ratios etc) 2/ as our lives become increasingly digitized, value creation is happening on a new frontier, and a handful of industries and companies are well positioned to capitalize on this shift

1/ last week's @BlackRock spot Bitcoin ETF filing was big news!

but, it's not the only story. many of the largest financial institutions in the US are actively working to provide access to Bitcoin and more.

a quick glance - $27 trillion of client assets here! 2/ this is by no means a complete overview of all the offerings available, but its always helpful to zoom out and look at the bigger picture

while "the institutions are coming" has been more of a trickle than a wave, we're seeing the bridges being built in real time

1/ stuff i'm thinking about right now (hence quiet and mostly off social) - a brain dump with links 2/ web3 infra business models very analogous to web2, hence business metrics end up converging over time

limited examples of scalable token-driven models that work, most successful co's are web2 / centralized models

tomtunguz.com/spot-the-diffe…

1/ thanks to @farokh and the @RugRadio community for having me on the show today! i enjoyed discussing NFT market structure and why i don't care for utility or roadmaps with my JPEGs 🙅‍♀️

links to things discussed below 👇

https://twitter.com/farokh/status/1557011467320295424

2/ blog post on NFT market microstructure and how it may evolve over time - don't worry, u will be able to explain market microstructure if u just skim it lightly

bonus: you can collect the post as an NFT if you are so inclined, thanks to @viamirror

meltem.mirror.xyz/Qc2jR5ggGznGrU…

1/ i prep talking points to help me gather + aggregate data, organize my thinking, and develop a cogent, fact-based narrative

here is a dive into this week's notes, with sources, for those of you who find it interesting or are working on doing this for yourself👇 2/ first i focus on market data by segment - i split it into retail, institutions & funds, and traders & market makers

for retail, @skewdotcom publishes social sentiment data

@glassnode breaks down bitcoin holder cohorts - shrimps (<1 BTC) accumulating aggressively rn!

1/ crypto market cap data is confusing

let's simplify by grouping things together

bitcoin, ethereum, and fully collateralized, dollar asset backed stablecoins (effectively the on-chain banking sector) make up the majority of the market today 2/ more interesting in looking at velocity, or trading volumes as a % of market cap, to understand where the turnover is in current markets

stablecoins have by far the highest velocity (we'll break this down further), followed by Tron (why?), Solana, and Ethereum

1/ an explainer on asset liability mismatch and why crypto firms are especially susceptible to this phenomenon due to issues around duration matching and risk management

tl;dr the finänce explanation for celsius, 3AC, and many others struggling

this is a balance sheet ⚖️ 2/ unlike tradfi, in crypto, most debt doesn't have a fixed term and requires over-collateralization (you have to post more collateral than the value of your borrowing)

in the last month, a lot of long term debt suddenly became short term debt or even worse, got called

1/ crypto sentiment is tricky to untangle, especially in the echo chamber that is crypto twitter

at @CoinSharesCo, we use data to inform our view on the market. here are some data points that provide helpful context. 2/ from our weekly fund flows report - last week, investors added to #bitcoin positions, with $126M in net inflows into publicly traded bitcoin products

with 2 consecutive weeks of net inflows across all crypto products, investors are buying the dip 🍲

jbutterfill.medium.com/volume-83-digi…

new york continues to be an absolute disaster when it comes to crypto policy

@ericadamsfornyc @NYSA_Majority @NYS_AM

https://twitter.com/BlockchainAssn/status/1517637109368164358

many states are taking steps to show leadership, while NY sanctions itself from the crypto economy via terrible policies

new hampshire h/t @GovChrisSununu
wyoming h/t @SenLummis @GovernorGordon
texas h/t @GregAbbott_TX
florida h/t @RonDeSantisFL
kentucky h/t @AndyBeshearKY

1/ cross chain liquidity - a short thread

contrary to popular belief, liquidity is not listing ur coin (that's exit liquidity...)

liquidity is a function of market depth

generally -
lots of bid and offers + big size -> liquid
few bids and offers + small size -> illiquid 2/ when demand > supply for block space, tsxn fees go up. fees dynamically price financial computation.

so what's a girl to do? 3 solutions:
1. make function use less block space
2. migrate compute to L2 and settle to L1
3. do compute elsewhere that's cheaper

1/ there's been a lot of talk about crypto, sanctions, and the escalating conflict in Ukraine

joined @emilychangtv @business last night to discuss.

#Bitcoin is non-political. it's use is being politicized but the narrative =/ facts. receipts👇

bloomberg.com/news/videos/20… 2/ bitcoin is non-political, global internet money.

it can securely, quickly, and cheaply transfer value with verifiable settlement guarantees.

anyone with an internet connection can send it without an intermediary or through a centralized service provider. user's choice!

1/ massive narrative shift under way right now

after a rough 2020 (who can forget crude futures flipping negative) the energy sector is entering a new era of profitability and cash flows

for 2021, exxon $XOM reported $23B of profits. chevron $CVX reported $15.6B net income. 2/ i expect the energy sector and the crypto sector will become fast friends over the next decade

bitcoin mining and other types of specialized computation that supports the security and efficacy of blockchain networks require colocation with abundant energy sources

1/ thanks to @cvpayne for having me on @FoxBusiness to talk about the crypto venture boom and the wealth being created by this growing industry

while flex is fun, there's something profound happening with the billions of dollars of wealth being created

video.foxbusiness.com/v/629482398300… 2/ in 2021, $612B was deployed into venture capital investments, nearly double what was invested in 2020

of that about 5%, or $33B, went into crypto related investments, but valuations in crypto are on average 150% higher than other sectors

investors want in at any price!

1/ design is going digital!

acquired marula #002 - a physical chair and its digital twin, which lives in a metaverse landscape

designed by @StudioAkha, customized by me

only 150 marulas will exist

opensea.io/assets/0x495f9… 2/ there are 3 types of marulas - limited, rare, and ultra rare

the finishes and the location of the NFT goes from earth, space to other galaxies depending on the rarity

i'm excited about the intersection of design, NFTs, and new studio models for creators

1/ dear @ewarren @katieporteroc @RashidaTlaib @SenatorHassan and signers of the "letter to cryptominers"

your letter, while admirable in intention, contains numerous factual inaccuracies around bitcoin mining, its ESG footprint, and impact on local energy grid

brief thread... 2/ the carbon emitted by electricity providers supplying the Bitcoin mining network are inconsequential.

at 0.08 % of global CO2e emissions, removing the entire mining network from global demand would not amount to anything more than a rounding error

1/ excited to announce the launch of two new @CoinSharesCo ETPs - @Polkadot and @tezos

both ETPs have 0 management fees and give staking rewards to holders - 5% on $DOT and 3% on $XTZ

coinshares.com/news/coinshare… 2/ as blockchain protocols offer incentives to participate in securing the network, fundamental questions emerge around how long term holders of these assets participate in network inflation

at CoinShares, we have been building crypto financial products for the last seven years

1/ new research from @CoinSharesCo @jbutterfill on quantum compute as a threat to bitcoin's security model

tl;dr - scary in theory, exceptionally unlikely in practice. also, the entire financial services / internet economy would be FUBAR.

read on 👇
coinshares.com/research/bitco… 2/ cracking encryption is HARD. 128-bit encryption has 340 undecillion (36 zeros) variants. that's... a lot.

context - a computer that could test 1 trillion keys per second would take 10.79 quintillion years to crack it, which is 785 million times the age of the universe 🪐💫👩‍🚀

1/ so you want to work in crypto?

excited to share a new @Pallet_HQ job board ft my amazing portfolio companies - over 150 roles from across 2 dozen companies in the space, and roles ranging across functions from engineering to HR to BD

meltem-jobs.pallet.xyz/jobs 2/ companies include @BlockdaemonHQ @CasaHODL @chia_project @edgeandnode @fold_app @MessariCrypto @zapper_fi and many more!

if you're a portfolio company, just ping me and i'll send you the link to easily add your open roles or link your careers page.

1/ a few thoughts on current sentiment re: bitcoin

i see a lot of talk about a coming 🐻 bear 🐻 market, but let's look at data to help clarify where things might be headed through the end of Q4 and into Q1

sentiment -> demand -> market structure -> flows 2/ sentiment has been mixed - lots of positive news and catalysts but also the looming threat of max regulatory pain in the US and Europe

however, there is now significant support for a bitcoin allocation from macro investors and institutions