Reading list on Crypto Economics
Thanks to Daryl, Hans, Dmitri & others. Join @TokenCode 🤓
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Is economic life really zero-sum? A universal framework for understanding incentive design in crypto and fiat systems — Part 1
https://medium.com/coinmonks/is-economic-life-really-zero-sum-e15e8179e2

Unplugging from the Fiat Matrix A universal framework for understanding incentive design in crypto and fiat systems — Part 2
https://medium.com/coinmonks/unplugging-from-the-fiat-matrix-b5a194e9442d

Which New Business Models Will Be Unleashed By Web 3.0? Taking context from the history of business models native to Web 2.0 and to Web 3.0
https://medium.com/fabric-ventures/which-new-business-models-will-be-unleashed-by-web-3-0-4e67c17dbd10

A Primer on Bitcoin Investor Sentiment and Changes in Saving Behavior
https://medium.com/@adamant_capital/a-primer-on-bitcoin-investor-sentiment-and-changes-in-saving-behavior-a5fb70109d32

Value Capture and Quantification: Cryptocapital vs Cryptocommodities - on staking and value capture
https://www.placeholder.vc/blog/2019/4/26/value-capture-and-quantification-cryptocapital-vs-cryptocommodities

Five differences between Cosmos and Polkadot
https://medium.com/@juliankoh/5-differences-between-cosmos-polkadot-67f09535594b

Notes on applicability of the well-known Modern Portfolio Theory to describe risk profiles of cryptoassets
https://telegra.ph/Crypto-alphas-and-betas-04-30

Dear diary, today I quit crypto...

I was writing a long rant and then deleted it. Let's make it short.

There is very little to none secondary market right now, hence it's hard to attract primary investors. So what some projects seem to be doing? Reverse raise. That's when you detain pretty much all of your tokens (you don't sell any to outsiders or just not at all) - and then you liquidate them. Every day you wake up and sell 🤤

It feels like a secondary market, but it's actually just a continuous fundraising - non-transparent EOS style. Keep selling, printing news, selling more. People feel like "oh wow the price is stable, means it's consolidation, I need to buy" but actually no one can sell because no one has tokens. This model was also possible before, but first you had to buy back your own tokens - which is costly and is not so easy. But IEO enables generally 0-5% liquidity, and then you just draw charts like you want. Casino level 80.

🆘 Reverse raise: print news + print tokens at no outsider supply => dump every day

Projects do not even need to try anymore. They don't care about websites or communities, which is sad - fuck them. Also there are no reviewers making an effort to look into anything these days - and it's understandable. The value add of reviewing the FuNdAMentAlz has no effect or meaning anyway, most of the time. People wanna see green, and that's it.

Jk, I didn't quit. But be careful of reverse raises. That's it, have a nice weekend - hit me up, I ll be in NY drinking my sorrows away. 🍹

FUUUUCK I GOT REKT AGAIN

It took less than 30 min for charts to fuck me again. Who is putting such bids? Where is the freaking retrace? 😰 Sell books are... empty?!

My path to getting fucked

Essentially lost 0.22 BTC + 4 ETH on top of it due to getting rekt on ETH/BTC. Shall we short something boys? Don't think I have enough money for ramen at this point even.

Maybe the bull is here, but as soon as you change your sentiment to I will HODL everything now! - you will probably end up in destination fucked 😌

Bull market BINGO sheet

You don't like some ICO? Well, anyone being negative during bull can shut up. Because who cares... When it pumps, right?

1. Crypto traders gonna be gods again. Everything they buy will moon to USD.

2. Influencers will be back. Because apparently they got smarter after bear.

3. VCs will become very important again. Prepare to buy bags OTC.

4. Every MM will have great performance. 15K USD and up yet again?

Etc. If you are making gains, don't fool yourself to read fundamentals. You are still dumb. But better with a lambo than without it.

​​Blockcloud is a scam ⛔ I don't always scream "scam" at every project, but this is next level. Everyone knew it was just a shitcoin with meaningless tech and no use cases - so a soft scam - but it's wasn't as bad, no one can predict the future. Anyway, what Blockcloud has been doing is outrageous:

1) Completely screwed private sale by giving almost no tokens at IEO
2) Kept selling foundation tokens at x20 posting charts of "moon lambo trading"
3) They have delayed the distribution yet again, for the third time - till mid-summer

Blockcloud made around/over 6M USD profit! Update: it's more factually correct to appeal to reverse raise shenanigans here rather than call specific actions. The fact that no one got the IEO sale and the private sale unlock was constantly being postponed, speaks for itself. Exact number is not as relevant here. Here is what reverse raise is.

In general, the primary market is now rekt. No one wants to touch seed or private sale. SAFTs mean nothing. Projects bend over at exchanges' will. You risk hugely by being vested for a century or have your bonus completely reversed Ifor being an early supporter. Demand an extra mile of accountability from projects going forward...

​​Professor coins strike again 🤓

NKN, IOTA, Avalanche, Perlin... who was first?

-> Apparently, IOTA is just going to do DPOS Avalanche: twitter.com/ercwl/status/1133724442658562050
-> Which is very similar to what NKN is trying: twitter.com/NKN_ORG/status/1134156239380787200
-> Which is in fact has been a battle of perlin for a long time: https://news.1rj.ru/str/cryptocodereviews/53336
-> Which is what tried to be debated by Near Protocol: https://medium.com/@itsnear/what-avalanche-paper-is-not-c047cf512c16
-> To which CTO of Perlin replied to as switching to just Snowball: https://twitter.com/Dranithix/status/1132388693694509056

A bunch of fugazi words, right? But you know what? No one gives a fuck about your new consensus.

Deal with it. Blockchain is a piece of old technology, no need to make 100 consensus layers. Surely, academic papers are important, but it's mostly how techies like to measure their pipi's. What matters is success determined by users and the value you bring them. Having the best paper and being the first paper is not a secret sauce. Another project will take your tech and then implement it in 1 day, retaining full network effects.

Which is why I don't believe in ETH killers and some new Layer 1's. That just doesn't cut it. Crypto is no longer about that research, there is too much noise. Crypto is now a startup business, where you have to work on community retention, product marketing, and build something users need - and not only what your dev friends like to code.

Will try to make a new article on Token as a Product in the coming week.

Spark it Up 💥

One of the most discussed projects of 2018-2019... After a year of weird communication, questionable development, and so on - the token unlock of SPRK is about to happen.

A terrible paid interview with Ivan on Tech seems to have convinced nobody. There is no fundamental focus from the community, because what is there to look at? But maybe we are all in a bubble, but everyone else likes them? 🌚

Pamp or damp? Your prediction:

xDai DPOS @xdaistable

P2P payments... Boring. P2P payments in a stablecoin... Subnoscription market, payments - still not hot enough. Stable chains for every stable coin, with private ZK Dai payments, bridges, and more... This is getting hot!

I like the narrative and the insanely fast development speed. One staking token can ensure security on every sidechain as well. Read some preliminary research, later on it will probably be updated: t.me/ivangbi_diary/602

Waiting for the numbers!

​​Time to FUD myself

So Binance announced the split between a US and an International exchange, essentially how Bittrex US - Bittrex International had it for some time. Binance already has the Jersey, Singapore and other compliant platforms which you can access with fiat. But no shitcoins. Ouch. Another thing, CZ has always been the guy who is able to stick a stiff one into the legal questions and make his movie keep rolling. That's why Binance managed to have that liquidity, one of the reasons. Whatever your beef with them might have been, they are still a freaking leader.

But this recent trend of hardcore regulatory pressure shows that no one can escape the big brother, even CZ of Binance. Considering that a huge amount of volume is coming from the US, this essentially says that shitcoins will not be available to that huge capital anymore, unless you go really illegal and buy KYC accounts.

Let's split assets into 2 categories:

1) BTC, ETH, and major (old) alts which might be useless - but they are so old, they are compliant. Those will be available to the big capital which are trying to do portfolio management or whatever else, just putting money into every big coins and stuff like that. Inflow of capital. Everyone needs it.

2) Shitcoins. I love shitcoins. Shitcoins is everything that is not BTC, ETH or the useless old alts which managed to become somewhat compliant. Those will be available only either via some shady routes and shady KYC stuff, or on smaller exchanges. Smaller exchanges means low liquidity. Low liquidity means it's easy to pierce through the books with 1 ETH orders. Easy to pump, easy to dump. Thst's fine! But there is one problem. It mean they might never outgrow that period. Because big capital might never get access to them.

And this trend might just continue. Big capital is compliant, and will be restricted access to those volatile assets, our lovely shitcoins.

What is the problem of shady routes and buying KYC accounts? Compare Silk Road to a compliant market. Despite everyone in crypto liking the new paradigm and so on, everyone benefits from big money coming in, even if it is stupid. Don't you want banks, family offices, or businesses to start buying your shitcoins? Of course, you do! But then you need to comply. Everything here is built on economic incentives after all. I wouldn't say volume will shit to those who accept the US, because nowhere where there is volume - US is accepted.

There is always information assymetry. Not everyone will learn how private keys work, only 5% will. Not everyone will know what your project does, only 5% will. The rest is a crowd, and you need that crowd to grow as a company, project, product, or whatever else. And the more we are pressured, the harder it is to get that 95%.

Rephrased from some twitter post I saw yesterday:

You: I want to trade this asset.
Gov: you can't, it's not compliant.
You: but freedom of money?
Gov: you will lsoe money, we can't let you do it.
You: ok I understand, I studied. May I?
Gov: no, you can't buy this.
You: but it has good risk-return exposure.
Gov: no, get 1% interest and stay poor.
You: ...
Gov: JAIL.

This is me every time I have some new FUD... but then realize "I am too close".

IDEX going KYC -> FINE

We all knew it. IDEX is introducing KYC and DNA tests. But there is nothing bad about it.

In most jurisdictions, a transaction below a certain amount of USD is not even checked by the authorities. For instance, if you pay 5K USD for a piece of software, that is still considered to be normal, and no one will check anything. The resources of the gov agencies are so constrained that they only follow >X USD transactions. Below that, they can't physically care.

So this means we can be flipping shitcoins and airdrops on IDEX just via a fake email address. Pretty eeasy stuff, could have been worse.

https://medium.com/idex/idex-kyc-transition-period-and-updated-asset-availability-for-us-markets-set-to-begin-d45e945f842d

Many recent IEOs have never even been known to any community. Absolute random shady coins.

As it seems, exchanges loudly yelled "fuck it" and stopped pretending to do project due diligence.

They see there is no correlation between value & price, so users just want to long or short as well.

It's not news, this was the case before, but bear market amplifies the hopelessness of people.

Exchanges slam marketmakers onto random lowcaps and have people gamble. But it's fine!

Up until there is cash flow from projects assuming adoption, all of the partnerships matter none and are no better than just gambling.

Right now: a shitcoin with a marketmaker > a coin with legit use cases. Because of the cashflow shortage, either from usage or community belief.

If you want to see value and fundamentals play out, you need to stay through the washout.

Origin of Blockchains 🌿 Nature

You might be familiar that the way decentralized networks work resembles an efficient ecosystem, the likes of how the DNA functions. Here is some really cool content which dives into how blockchains could evolve based on cell theory.

A nice Sunday read: https://medium.com/id-theory/on-the-origin-of-blockchains/home

Looks like team is dumping their tokens. Marketing has been pretty weak as well. Need more market making funds to support the price! Team doesn't appreciate the community, they don't care about price...

Portions of a social network can thus turn into filter bubbles, in which individuals see only an algorithmically curated subset of the larger conversation. Filter bubbles reinforce political views, or even make them more extreme, and drive political polarization.

This can be related to hating DPOS in crypto, believing some pamp alt will change the future, and so on... A very interesting read 👉 https://www.nature.com/articles/d41586-019-02562-z

Why is my amazing product not mooning? - there is nothing good and bad, it all depends on how much someone else values it. And when your industry is not valued at all in general, the answer is clear.

In a terrible market, you can have the best product in the world and an absolutely killer team, and it doesn’t matter — you’re going to fail. — Marc Andreessen

The Founder’s Guide to Markets 👉 https://anujabrol.com/the-founders-guide-to-markets-345c8bc2991c

Political Theology of Crypto

Crypto unlocks an ancient form of political theology which uses the power of truth to ensure that the ‘laws’ of the system cannot be broken.

⛓ http://cryptosovereignty.org/the-political-theology-of-crypto/

Imho: the technology executes how we designed it to do it. But it's the social consensus that gives a cryptocurrency its value. There is no right or wrong in the code itself, it's what people make out of it. If your fork does not appeal to "social", it will simply exist there as the "wrong" chain and lose that much value accordingly.