1/ With RWAs & regulated stablecoins one of the fastest growing sectors in crypto, does it actually matter if a stablecoin/RWA is issued or settled on Ethereum? I don't think it does once the asset is issued natively anywhere else but on ETH L1. Let me explain why
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2/ Let's take Blackrock's $BUIDL tokenized by @Securitize as an example. BUIDL is issued on Ethereum, Arbitrum, & most recently Solana. That's good for Blackrock but potentially zero sum for Ethereum's "institutional issuance L1" vision.
1/ I'm going to propose a completely new system for valuing digital commodities like L1 tokens/sovereign commodities vs gov/equity tokens.
This is very important for $ETH & the various L2 tokens/chains. It could remove the cloud over the $ETH asset once and for all.
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2/ There's only really two types of tokens in crypto, digital commodities (typically L1 sovereign assets) & equity-like gov tokens. I explain it deeper in my previous p1 thread:
1/ Lot of talk about how to value different assets in crypto, especially given the recent AI/memecoin craze lately, but I want to explain the proper way to value the most important large crypto assets: L1 tokens vs 'type 2' aka dapp/L2/'equity' tokens.
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2/ L1 tokens have a mystical 'L1 premium' that no one's systemically explained. Many people think it's a speculative ponzi, but it's just the opposite. L1 premiums are more fundamental most realize.
Jul 14, 2023 • 20 tweets • 4 min read
It's important we don't lose site of what Judge Torres' Ripple ruling means (and what it doesn't mean). I'm going to try to cut through the noise and keep things concise.
My main conclusion is that this is a political battle and after the first inning, crypto is winning. 🧵
Without any doubt, most importantly, the case struck down the "embodiment doctrine" that has pervaded mainstream legal discourse until this ruling. It's great to finally break free from this psyop.
Jun 2, 2023 • 13 tweets • 4 min read
The frxETH v2 thread you've all been waiting for!
Here's how @fraxfinance is building the most unique, versatile, & efficient decentralized LSD protocol possible.
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First, the motivation+1st principles:
The underlying structure of all LSD protocols are simple lending markets regardless of incentives/marketing/cute terms.
Lenders lend ETH & get a receipt token (LSD). Borrowers rent the right to run a validator & pay interest to lenders.
Aug 20, 2022 • 18 tweets • 7 min read
I can't stand to not speak up about this @feiprotocol situation. Please read this 🧵 for one of the most egregious "DAO/DeFi" situations I've ever seen. There's CeFi drama stuff, but this is a new low for DeFi.
Some background on what's going on: In late 2021 Fei Protocol (the stablecoin) did a merger with Rari Capital DAO (developers of the Fuse money market). The merger passed overwhelmingly & $RGT tokens became $TRIBE tokens effectively sealing the deal. tally.xyz/governance/eip…
Apr 2, 2022 • 13 tweets • 5 min read
Alright it's time for the FRAX UST 4Pool thread you've all been waiting for!
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So how did this big move come about?
Most people don't understand Curve. They think it's a DEX with less cap efficiency than Uni v3. Wrong. Curve is the "fiat savings account" of DeFi. Forget all the middle iq takes "cUrVE fEeZ r Lez tHan CRV inFlayShon. CRV iz ponZu"
Nov 2, 2021 • 15 tweets • 7 min read
Quick 🧵 on why every single stablecoin protocol will end up looking identical to @fraxfinance given sufficiently long time. #AllRoadsLeadtoFRAX
@MakerDAO launched their DAI minting module today. This is a bigger deal than most people think because it makes $DAI algorithmic.
The DAI Direct Deposit Module (D3M) mints fresh $DAI into @AaveAave for users to borrow. If too much DAI is minted and interest rate <4% then D3M contracts supply to target 4%. If rate >4% then DAI supply expands (algorithmically).
There's a lot of buzz about "DeFi 2.0" and what it actually means. There's a misunderstandings since everyone wants to brand themselves as the new trendy thing in town.
A 🧵 on what DeFi 2.0 actually is and the protocols that qualify as DeFi 2.0
DeFi 2.0 protocols/designs bring more capital efficiency in holding assets on their balance sheet and deploy liquidity/stablecoins/assets/incentives through the hivemind of their token holders. Critics might say this is just "treasury management." I disagree.
Sep 26, 2021 • 16 tweets • 5 min read
I want to introduce a new concept from @fraxfinance called the Decentralization Ratio and how we've brought our fiatcoin collateral reliance to below 60% and soon <20% while keeping the tightest algostable peg.
A 🧵 on stablecoin decentralization
Some background, $FRAX is the only algostable to keep a perfect peg, never breaking once since launch in 2020. But a common criticism is that FRAX is just fractional USDC. Indeed, at launch, the only collateral that partially backed FRAX was USDC.
Jul 16, 2021 • 10 tweets • 5 min read
I want to introduce one of the coolest features we've been working on at @fraxfinance called veFXS gauges. Arguably the biggest innovation @CurveFinance introduced after their stableswap invariant was their gauge tokenomics. $FRAX is gauges on steroids 🚀
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For those unfamiliar, users can lock Curve's $CRV token up to 4 years to vote on "gauge weights" that are tallied up every 7 days. Why is this a big deal? Each Curve pool has a gauge weight that signifies the amount of CRV token rewards it gets for 7 days until the next reweight.
Jun 3, 2021 • 18 tweets • 6 min read
This thread is about stability, money, and why maxis are wrong. If you only ever read one of my 🧵 make sure it’s this one
Let me tell you why BTC and ETH will never be money and what stablecoins are actually about. And how it's still $1T+ bullish for $ETH and $BTC. 👇
First of all, most people should know the dollar itself is loosely pegged to something: the CPI.
The CPI is meant to track a basket of consumptive goods Americans should always be able to buy with their $. It's debatable what should be in this basket, but let's move on.
Apr 8, 2021 • 18 tweets • 6 min read
A 🧵 on algorithmic stablecoins & capital efficiency
A lot of algo stablecoin critics continue to feel vindicated when a new project feils.
But skeptics misunderstand nuances in how the space is evolving. Let me tell you why your life will be ruled by algo stables soon 🙃
People call algos a ponzi or claim they will never work...and even if they did work, they say "Why would I ever use a partial/no backing stablecoin when I can use 150% backed $DAI?" They don't understand that capital efficiency is for SUPPLY SIDE money, not consumer side use
Apr 4, 2021 • 18 tweets • 5 min read
Some thoughts on $FEI.. 🧵
(obviously take this with a huge grain of salt as $FRAX is the only other algo coin in the @Uniswap top10. So it goes without saying I have some bias)
But as someone deep in the algo stablecoin space, I think there's important predictions to make.
Firstly, I won't comment on the $1B+ genesis ICOish raise because this is a technical/mechanism overview. I don't like to comment on speculation and the drama side of crypto.
Mar 11, 2021 • 9 tweets • 7 min read
1/ Proud to announce Frax v2. V2 is possibly the most ambitious stablecoin project ever attempted. V2 is more than a stablecoin, it's about completing the vision of decentralized stable currency by opening a new paradigm of design space. 🧵
samkazemian.medium.com/frax-v2-algori…2/ @fraxfinance introduced the concept of a fractional-algorithmic stablecoin. V1 is the first stablecoin with parts of its supply backed by collateral & parts unbacked/algorithmic. It is currently the only stablecoin under 100% collateralization without breaking a price peg.
Jul 27, 2020 • 49 tweets • 12 min read
1/ In this thread, I will explain why Ampleforth (AMPL) is the biggest facepalm in crypto history, more so than even Bitconnect. I don’t mean to say AMPL is a fraud, but after this thread if VCs/backers don’t explain themselves, this will be a fiasco when shit hits the fan.
2/ As of writing, AMPL has over half a billion dollars of market cap. Trust me, I got into crypto in late 2013 and mined Dogecoin so I’m no stranger to meme value. But I’d like to set the record straight here that AMPL is just that, a meme, and serves absolutely zero use
