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Ologai Profile picture
Ologai
@ologai
Scrolling down the world of economics, finance and crypto
May 4, 2023 • 12 tweets • 6 min read
Yesterday I talked about oracle front-running.

Today I’ll talk about how an oracle-based AMM with zero-slippage can be exploited by price manipulation. An oracle-based AMM sets the exchange rate based on prices coming off-chain.

This allows zero-slippage trades: you can trade any amount of tokens at the same price provided by the oracle.

Unfortunately, if not done carefully, this approach can be exploited.
May 3, 2023 • 11 tweets • 4 min read
Blockchain oracles 🔮 are the eyes of crypto to the outside world.

The most frequent use for oracles is a reliable price of an asset, based on aggregated data of several exchanges.

But one overlooked aspect of an oracle is its latency, which gives rise to potential exploits. Image If you want to know the basics about oracles, check my thread about it.

Latency of an oracle is the time delay between the off-chain and the on-chain data.
Mar 22, 2023 • 21 tweets • 7 min read
A lot is said about Uniswap V3 concentrated liquidity and its active management.

But did you know that Curve V2 (crypto) pools already have self-rebalancing concentrated liquidity?

Let’s dig in… 🧵 The tricrypto2 pool is a curve v2 pool. When you look at it, you see a bunch of data and parameters:
• Pool quantities and APYs
• Virtual price
• Price Oracle
• Price scale
• Pool parameters: fee, gamma and A

Although some are obvious, others require a deeper look.
Mar 1, 2023 • 29 tweets • 38 min read
The Shanghai upgrade will allow $ETH PoS stakers to withdraw their $ETH.

This not only has a potential impact on $ETH price, but it will also change the landscape of Liquid Staking Derivatives (LSDs).

Let’s find out the players in the game and how the game can change. 🧵 Unless you live under a CT rock, you know that:
• an Ethereum PoS node operator (NO) requires staking 32 $ETH at minimum
• LSDs allow individual users to contribute to fulfill a NO and get a 1:1 liquid receipt token in return. Staking yield accrues to the receipt token.
Feb 27, 2023 • 7 tweets • 5 min read
📜 A weekly scroll with stuff you should know about.

.Proto-danksharding explained in a simple way by @ShivanshuMadan. @ShivanshuMadan Edgy explains how to find gems using DefiLlama.
Jan 13, 2023 • 5 tweets • 2 min read
The Dunning-Kruger effect came from a study done by David Dunning and Justin Kruger in 1999 that concluded:

The lower the performance of a person, the better they think they perform.

Why is this important for INVESTING? This effect can be seen across several fields of expertise.

The metacognitive ability theory is that poor performers cannot distinguish between good and bad performances.

But why should they think they are better and not worse than they actually are?
Jan 11, 2023 • 15 tweets • 23 min read
New year, new narratives.

In this 🧵, I compile the narratives that CT is betting on for 2023.

At the end, I cover the most common ones. .@DeFiMinty has 10 narratives:
• Validator middleware (E.g.. Eigenlayer)
• Optimistic rollup improvements
• crvUSD - Curve’s stablecoin
• GHO - Aave’s stablecoin
• Fantom network
• Volatility trading
• GameFi
• NFTFi
• Liquid Staking Derivatives (LSD)
• ZK-rollups
Jan 6, 2023 • 17 tweets • 4 min read
As pointed out in my previous thread, market cycles are created by its participants:
• greed and euphoria compound during uptrends
• fear and depression grow during downtrends

Credit and other factors exacerbate the swings.

So how to take advantage of that knowledge? 🧵 🔷 How to know where we are?

You don’t! At least not for sure.

You can’t time the tops and bottoms because each cycle is different.

It can last much longer than others, or much less.
Jan 4, 2023 • 33 tweets • 6 min read
A thread about market cycles.

Part 1️⃣ What is a market cycle and what causes it.
Part 2️⃣ How to know where we are and how to position yourself The efficient market hypothesis states that any investment with a return above average will be exploited by participants, leading to more competition and eliminating that above-average return.

Higher returns would come from riskier investments, leading to a market with no alpha.
Jan 2, 2023 • 8 tweets • 10 min read
Happy New Year! 🥳

📜 The first weekly scroll of 2023 with stuff you should know about.

The end of the year is always a great time to reflect on what you learned. @milesdeutscher shares 22 lessons that anyone should have learned in 2022. @milesdeutscher And another 22 from @thedefiedge?? Some overlap though.
Dec 16, 2022 • 19 tweets • 4 min read
As it happens with any new narrative, perpetual derivative protocols are growing like mushrooms.

A negative side effect is that liquidity gets spread and isolated across all protocols.

Perennial may mitigate this side effect with a bottom-up approach 🧵 Image A bottom-up approach is one where a protocol provides a liquidity layer from where other DEXes can fetch.

Perennial is a standalone derivatives protocol, but their approach is to build a bare-minimum primitive, so others can build on top.
Dec 14, 2022 • 11 tweets • 5 min read
As it happens with any new narrative, perpetual derivative protocols are growing like mushrooms.

A negative side effect is that liquidity gets spread and isolated across all protocols.

MUX Aggregator intends to mitigate this side effect with a top-down approach 🧵 A top-down approach is the one we already see in token DEX aggregators (think 1inch, Paraswap, Matcha, …).

Trades are optimized for best return by finding or even spreading them across several DEXs.
Dec 7, 2022 • 20 tweets • 10 min read
Once in a while, a protocol opens new markets in DeFi.

@GammaSwapLabs is one of those, allowing trades on VOLATILITY.

Let’s find out how they achieve this 🧵 ImageImageImage @GammaSwapLabs GammaSwap is a volatility DEX.

Trading volatility means you profit when you go:
• LONG: if you expect token prices to change
• SHORT: if you expect prices to remain steady.
Dec 5, 2022 • 7 tweets • 6 min read
📜 A weekly scroll with stuff you should know about.

.@CryptoKaleo on how the USA moving from net supplier to net buyer of oil will be bullish for the Oil/Energy sector. @CryptoKaleo A comprehensive thread exposing the case that a stock market crash may be imminent and bonds may rally.
Dec 2, 2022 • 17 tweets • 5 min read
Greek letters are used in investing and finance. Do you know what they all mean?

Let’s see:
• Alpha
• Beta
• Delta
• Gamma
• Theta
• Vega (not really a greek) 🔷 Alpha

Generating alpha means taking an investment with more returns w/ same risk, or the same returns w/ less risk.

In other words, alpha > 0 means an investment better than the market (e.g. S&P500 ETF).

Hence the proverbial words: “You want some alpha, anon?”
Nov 30, 2022 • 7 tweets • 6 min read
What happened to $CAP’s price yesterday? It moved +60% in a day 🤯

Why? @CapDotFinance just launched Private Beta of their v4.

But is it worth the rise in price? 🧵 Image @CapDotFinance CAP v4 is a complete revamp of v3.

While v3 was limited to $ETH perpetuals and traders could only open/close positions, v4 is an entirely different beast!
Nov 4, 2022 • 7 tweets • 6 min read
A month ago, @insrtfinance minted 1000 Dawn of Insert NFTs.

These NFTs hold several benefits:
• Token airdrop 🪂
• Reduced protocol fees ✂️
• Boosted rewards 💵
• and more…

Let’s recap what is Insrt Finance and how the NFTs are being valued. @insrtfinance If you minted one NFT and you were one of the lucky 40%, you would actually be in profit.

I missed the minting phase, but I bought an Uncommon at 0.2 $ETH. Now the Uncommon floor is at 0.37 $ETH.

The Common floor is at 0.19 $ETH.
Nov 2, 2022 • 24 tweets • 19 min read
To continue where I left off, I’ll cover the other parts of the FRAX ecosystem:
• Frax Base Pool
• Frax Price Index (FPI)
• Fraxswap
• Fraxlend
• Frax Ether I explained that $FRAX is the stablecoin of @fraxfinance.

The biggest AMM for $FRAX is Curve, in which @fraxfinance has a big influence in terms of boosting yield through their $CVX holdings.
Oct 28, 2022 • 28 tweets • 13 min read
You can't spot an innovative project if you don't know what already exists.

One of the OGs is @fraxfinance, which has become a massive ecosystem.

Let's go through it:
• $FRAX, the stablecoin
• Algorithmic Market Operations
• Vote-escrowed FXS
• Frax power over Curve ImageImage @fraxfinance On another thread I’ll cover the other parts of the FRAX ecosystem:
• Frax Base Pool
• Frax Price Index (FPI)
• Fraxswap
• Fraxlend
• Frax Ether
Sep 5, 2022 • 8 tweets • 4 min read
📜 A weekly scroll with stuff you should know about.

As always, an amazing thread by @thedefiedge. This time about strategies to make your crypto research (or any for that matter) more efficient.
Talking about research, this thread is a massive one but it covers how to find gems and how to find out if they are going to pump or die.
Jul 29, 2022 • 6 tweets • 3 min read
You read that a blockchain is Byzantine Fault Tolerant (BFT), but what exactly is that? And how does the first and biggest blockchain does it?

BFT refers to the Byzantine General's Problem, which starts with a group of generals trying to reach a decision: attack or retreat? They are far apart, so messages are sent among them to reach a consensus.

However, some generals can be traitors and send conflicting messages.

If half of the generals decide to attack and the other half decides to retreat, they'll get slaughtered.