Longest day of my life

Planned on arriving Monday morning but after hearing about Unicup and Boca Juniors game decided I couldn’t miss out. Flying 11 hours straight knowing id have to go straight to the soccer tournament didn’t feel great but I knew I couldn’t miss out. Havent touched a ball in 9 years, but once I started warming up I was confident I still had it. Boy was I wrong, the moment the whistle blew and you had use any sort of agility my entire body seized up. Looked like I had never played in my life, was a huge wake up call tbh. We ended up taking a team of misfits ( formed 24h before the cup ) to the quarter finals and lost in PKs. Great group of lads and enjoyed the experience. Props to @Uniswap for hosting, was truly an amazing event. Side note but found it funny Uniswap foundation and labs were 2 separate teams, always good for a laugh.

sharp lads

After losing in the quarter finals I went straight to the streets of argentina to drink fernet and coke. If your not familiar with the official drink of argentina well its an italian liqour mixed with coke. Everyone drinks it, from the fans to the venders. It’s so engrained in their community, its like the equivalent of bud light on an NFL sunday. Apparently they banned visitors and alcohol because there was too much violence.

good vibes

The game was awesome, can’t even begin to describe the amount of raw energy and culture on display. Constant chanting the entire game, no clue how the trumpet dude keeps it up. The funniest part is when my friend translated the chants into english, they are so dumb.

At this point you might be saying “nobody cares, tell us what to bet on” or “this dude has no idea how to use a comma” and you prolly right so lets begin.

People watching

As a gambler talking to people is very important. Right or wrong, dumb or smart, rich or poor doesnt matter. It’s important to just smile and wave and learn what they have to say. All info is good info.

As I hobbled from event to event my goal was to try and meet interesting people. I started with the conference, very well organized except for the internet. My first realization was wow there are alot of people here, like I get coming to devconnect for the events and food but who are all these people going booth to booth?

So I asked a friend, their response gave me a good laugh...

the most dangerous species of booth goer, the ‘business development representative’

So I started just randomly asking people walking around, “what do you do”. Most to my surprise were students interested in what crypto was and ofc the swag merchants. Since I was at the conference I figured id take some notes how big the booths were, luckily iphone has this measure feature so i got to work.

For the longest time I used to think BD / marketing people didn’t really matter but over time I realized nobody really has a moat and they are the differentiating factor. Any successful project is ran by the smartest BD / Growth / Sales people. Does this mean your lending protocol needs to host massive parties at every conference? Im still 50/50 on this but slight lean to yes if the music is good.

First crowd I met with are the MEV types, most of the discussion is over my head but feel I have a solid filter for who is legit or just shilling buzzword fugazi. I get the sense that this crowd is bored, flow is slowing and they are slightly unsure what to do with their skillsets.

Second crowd are the very skilled engineers who are post-economic. What does this word mean? well me and my friends have been using it lately to explain people who have made so much money they just dont really care anymore. Care not in the sense of dont try, but care in the sense of being aggressive raising money and having to listen / work for people. Be somewhat liable for an idea or success of a company. Met with some incredibly smart people that are just interested in building out stuff they have wanted to do for a while but don’t want to raise money and are just doing it for intellectual curiosity on their own time. tldr enjoying life but still coding, these guys never lose the (CODING ENJOYMENT WORD).

Third crowd is the VCs. Prolly the most intelligent, caring, attractive, well rounded self-aware people in the industry ( i might try and raise money soon). Most seemed unable to deploy and a bit worried. Chasing trends like prediction markets valued at 50-100m and stablecoin stuff. My guess is this is a combination of the above where the new exciting projects they want to invest in can only be built by the “post-economic” dont care anymore crowd and the risk reward for investing in the copy paste stuff just isn’t there anymore. I’d like to think most would agree with this sentiment, but tbh there did not seem to be many VCs down there.

chill pup

Last but not least brings us to the final crowd.....normies. People that have no clue what crypto is and because of that smile every day, enjoy life, and just overall happy people. There was a photographer taking a picture of this dog who was just chillen watching the horses. Was kinda of bored of talking to crypto folks at this point so I decided to walk down there and talk to her. Her english was surprisingly good so I began to ask her about crypto ( she was the event photographer). She said she had heard of it but had no clue how it worked, but said she has had clients that wanted to pay her in crypto but she could never accept it. I asked if she wanted to learn so I had her take out her phone and download phantom wallet (found this to be the easiest onboarding wallet) and sent her like $8 in sol. We then swapped it to USDC and explained how it worked. She was really smart and understood everything, was very impressed. Then she asked “what is a stablecoin”, and I began to explain how its mostly US dollars that are digital. Her next question made the entire trip worth it, she asked “what is the inflation?” to which I replied idk maybe 4% or whatever they tell us. She then went on to explain how the argentinian peso at some point was inflating at almost 10% per month. I replied not even our best ponzi schemes get that kind of return, she laughed we locked eyes then kissed. Now we have 2 kids, both learning rust. Only joking, but it was amazing to talk to someone who is cryptos best use case but never really took the time to understand it. Most of us who have been in this ecosystem for years are luckily we got onboarded because of our gambling problems or video game addiction. But for others their interest was rooted in deep economic instability where they had to educate themselves to stay above the poverty line. Now to some this makes perfect sense, but I fear most don’t really understand how bad it is for most.

Nobody cared we were nuking

To my surprise not once did anyone bring up the price of crypto. I never would have expected this considering we were nuking the entire conference. People just didn’t care, they were either there to have fun / talk to friends / network / enjoy a different culture. Idk if I had to guess if this were a solana conference and SOL was down 20% in 3 days everyone would be talking about it. I’m pretty confident the frequency of price checking of a eth dev is far less than a sol dev. Maybe the ethereum community actually cares about building and not price? Does this make the price go up, is it good or bad? well thats the billion dollar debate that is hard to gauge in the short term.

My gut feeling is the dev community for each chain has different reflexivity, im not even sure if that makes sense or I used the word correctly but I always try to fit “reflexive” into every blog. Next blog word is juxtaposed so be on the look out for that banger.

Privacy & Agents

Two topics that were discussed extensively at the conference were privacy and agents. Privacy seems to be a meta that has just caught attention recently. Is zcash leading the narrative? Quantum worries? No clue, but I think its been under represented in crypto mindshare and ofc all it takes is some dino token to pump for people to begin paying attention again.

Privacy is important I really do believe that, but its just impossible to invest in. If your not here to put food on the table congrats, I respect that but not sure I understand it. I do think its kinda funny how ethereum is aligning with privacy and the notion that its not investible. A match made in heaven as I see it, however if they are able to pull off privacy without sacrificing the other parts of the blockchain values we could see some real value. The world sadly will only get more chaotic and privacy will be a necessity for most or at least the thought of it. Don’t really have too much more to say about privacy but it had alot of eyes at devconnect and people really seemed like they cared.

Agents, are they useful? Jury is still out, or maybe the trial hasn’t even started yet. Unfortunately when people think agents they prolly think ai16z elizaOS. Not a great kleenex for us tbh, was just a sdk that didn’t really do much but as long as you lead the narrative and go on an taylor swift era exit liquidity asian tour you too can make millions.

Agents will be a thing, but also impossible to invest. Agentic payment rails will be very important and x420 seems to be doing a good job building out the infra so far. Devs will start to take note and I think we could see another AI mini narrative start to form if things quiet down. Wish I knew more about crypto agents but I just don’t think its worth the research rn. But still important to note it also had alot of mindshare at the conference.

tldr

7.5/10

Enjoyed meeting new folks, great food, cool city, good friends, amazing culture. As for me, id like to think im the dog in the photo. Just observing for now, alot of market things scare me a bit ( will blog about these soon ).

The best trades I got out of the conference were either to start vibe coding a project or invest in Argentina real estate. I only have the money for one of those. Also gota get healthier.

happy thanksgiving

Can we continue to guess how the market will react with tariffs, doubtful tbh. Most will take a long view praying everything will revert and it could be correct but are there better trades?

Since December I’ve taken the view majors have topped and will either stall or bleed out but Saylor will provide enough of a twap that BTC dominance will outperform. So far that has held true, so I got that going for me. However holding these positions where your long bitcoin and short a basket of some alts & other majors can be risky when there is a large vol event that shifts the vibe. An example of this would be the presidential election. A binary event that shifts the market in such a big way you can see alts which might have alot of short interest exposure squeeze. This is usually where I get rekt and tbh I did when trump got elected. I thought Trump would win but I believed it was going to be more contested and alot of the Trump OI would get washed out before the presidency was finalized. Great story man, nobody cares! Now how do we make money…

Alright most of my thinking for the last 5-6 months has been that Saylor is the entire market. Saylors buying combined with large institutional interest post trump election did a couple of things. One tradfi apes pushed CME premium for futures up to >20%. When this happens the basis trade (buy spot / sell futures) becomes very attractive. And ever since the ETF this trade can be done more efficiently. Most of the ETF inflows were harvesting this yield. Now the important part is when the basis gets put on I believe it has a net positive impact on price as sourcing the spot BTC is harder more illiquid than selling a future.

Having said that, ever since saylor blew his load at the top his buying has been exit liquidity for this basis unwind. When said position has to exit it creates a downward price impact as selling spot BTC is worse than buying back the future. Basis premium and ETF flows work together.

So how is Saylor able to raise so much in debt? Well the twitter macro stat arb credit gurus GMO free traders would argue its because of the underlying volatility of MSTR stock. When you buy a convertible bond your essentially buying a call option. Saylor was giving out in a relative sense a very cheap call option relative to the market. While the vol 4 years out is less than the front contracts I guess these guys sensed value? Below is a bloomberg terminal screenshot to make me look smarter.

Now I know absolutely nothing about this space and maybe there are markets that exist where they can purely arbitrage these values 4 years out. If you pull up a terminal you can see some of the top holders are short MSTR equity but there are so few listed buyers of the bonds its hard to say where the actual demand comes from. Its hard to say for sure how the buyers valued it but whats important is how Saylors ability to raise has changed. When volatility was very high he was able to raise debt but as the vol collapsed his ability to raise more debt has come into question.

Its very important to understand the premium. Because not only can saylor try and issue debt but he announced of the biggest equity + fixed income offerings in history. A 42 billion capital plan he called it. Saylor is no dummy, if his equity is trading at a premium why let traders feast on this when he can take advantage of it himself. So thats what he does, the goal is to sell as much stock as possible to fund bitcoin purchases. This works until the premium starts collapsing too much. The premium got as high as 3.4x which means their companies MCAP / BTC holdings. Nobody gives a shit about their “software business”, most likely employees random friends & family. Saylor ends up twaping all this down to currently 1.7x.

Since announcing his common ATM he has sold almost 19 Billion dollars worth of stock to buy bitcoin. I swear most of you don’t realize how much buying power that was relative to the market. Now this works until he starts to piss off his cult too much. When the premium dropped to 1.2 reddit/r/mstr starts wondering if they are all retarded (they are) he had to come up with other options. Back to debt right? well since the vol collapsed he really had to sweeten the deal and he did.

So this was enough to stop the premium collapsing and took some pressure off the stock. But unfortunately equities and orange man had another thing in mind. Debt markets seem to have the advantage at the table so he needed to invent new products to attract new buyers, welcome RETAIL! Enter STRK and STRF which are preferred products that your average couch dwelling robinhood user has access to. Smart people wont give me cheap money, might as well try the american public.

• Dividend Yield: STRK offers 8%, while STRF provides 10%, reflecting STRF’s higher income focus and lack of equity upside.

• Conversion: STRK can convert to MSTR shares, offering potential capital appreciation, whereas STRF cannot, making it a fixed-income-only play.

• Risk Profile: STRK has more upside potential (and risk) due to its conversion feature, while STRF is more stable but lacks growth potential beyond the dividend.

• Investor Type: STRK suits those comfortable with some volatility and bullish on Bitcoin/MSTR, while STRF appeals to conservative investors prioritizing steady income.

Remember before all this debt was mostly raised near 0% rates, but now he is willing to pay 8-10% to keep the twap alive. And even filed an ATM offering to sell the STRK (issued at 80 cents) which has done very little volume as he tries to sell it.

So as it stands now he has 3 options

• Sell ATM stock (easy to do but kills premium)

• Sell STRK (still too expensive, zero demand)

• Issue more debt (if there was demand, he would have done this already)

  • debt would give him ammo to hopefully kickstart the premium again and vol

So if we apply some probability to those options find some pen and a spare napkin how much buying power do you predict will come from saylor in the next 3 months? Nobody has a crystal ball but I estimate we see under 3b of buying and this is using up all the common ATM 2B, and 500m maybe from STRK. Currently MSTR has 528,185 BTC and the current poly odds look like this

The June market only has 3k volume so don’t pay too much attention to that but May market would suggest Saylor needs to purchase ~22k BTC which at 80k BTC is 1.8B. Thinking about it more 30% is way to high id put it at 15% idk.

What i’m trying to say is MSTR financial alchemy used to work because the amount he was buying was so meaningful to the price. It was hard to source BTC and the illiquidity worked in his favor. But now things are different. The ETFs have a shit load of BTC easily tradeable and it takes 10s of billions to really move this thing. Bitcoin is boring, and without vol it becomes less of an attractive asset.

So making the assumption saylor is unable to generate the vol needed to bootstrap the ponzi again we have an easy trade. Just short ETH. Only joking, but maybe.

The trade?

Saylor assuming average premium of 1.5 and an avg BTC purchase price of 67k, $200 MSTR price is roughly the breakeven. This is a very important price for saylor and last time it came close he forced to make a sweet deal for more debt. Saylor knows the average price is important and the moment it goes negative it will dominate every financial headline. “SAYLOR BUYS 42B OF BITCOIN NOW PNL NEGATIVE” idk something like that. It matters, and I can’t seem to understand why the consensus view is that it doesnt mean anything and only his liq price matters. BTC is a big enough market now where you have the professional trading firms foaming at the mouth with a large borrow spot market where the hunt becomes a possibility. Maybe I get off to these financial conspiracy trades? But id like to think this is a very profitable trade to put his position in the crosshairs.

So if we assume $200 MSTR is important. I have been selling the credit spreads 200/190 idk what the format is to say the position. Sell the $200 put buy the $190 put and short the spread. Is it boring ya, are options out of my wheelhouse for sure. But its a do or die spot for saylor and he will do anything to keep it going.

The other trade is staying short alts against BTC but with tariff headlines on the horizon like i talked about vol events earlier, its not worth it. Actually longing dogshit against short majors like eth is not a bad trade. Hopefully you get paid to wait and there will be enough vol whipsaw back and forth that the short interest will get carried out.

I wouldn’t put too much into these trades, the main focus of the blog is to show that saylor is struggling and doesnt produce the impact he once had. I firmly believe he is the only buyer and any other buying in size is because of saylor. This is why we get BTC dom up and ETHBTC to 0. Nobody buys majors outside of eth and if they do its to fund another salami ferrari.

Hopefully you enjoyed it, no real detailed analysis but just an overview of how I think about saylors impact.

Survive, cause this inevitably ends in tears

-fozzydiablo

Since its almost 2025 surely we are gambling on everything right? So our favorite predictions market site has a wager on Bryson’s challenge. Currently a 26% chance to make a hole in one with 51 shots left. 16+17+18 *counters fingers carry the 1* yep 51 golf shots.

For people who like to bet on everything from is AOC pregnant or will Hezbollah launch 100 missiles into Israel we can research on twitter because everyones becomes an expert instantly during times of social opinions. Lucky for us we can rely on our boy Lou the golf stat pro

So assuming a hole in one being 1 / 175 not sure where he gets this from maybe the distance. His probability by friday would be 37.5% so the current market would be undervalued and Lou should mortgage his home.

He has taken 120 shots so far and 2 have hit the flag pin. What does that mean idk not sure yet but lets take a look at a majority of the shots.

Using days 5-15 we can graph all of his shots and I realize there are only 9 pictures above. Now using some advanced proprietary machine learning models (chatgpt) we can graph the balls on the green so it looks nice.

Now my dad would always say “you cant make it in the hole if you dont make it passed the pin” and its true.

40 of brysons 110 36% here don’t make it past the pin. thats not great

Lets ask claude intern what they think

interesting to note the success rate so far is 0%… *takes notes*

2 things are important here, the slope of the green and the amount of comments. Slope of the green suggests the sweet spot is going to be to the left of the pin, but if you look back in the videos he creates a good amount of left spin on the ball which I guess is typical out of right handed golfers. Strange I don’t seem to get any spin on my wedge. If I had to guess the best chance is if he lands it in the green zone.

Yellow circle represents 29 shots 26%

Green circle represents 11 shots 10% (did that one mental math)

And 44/110 shots come come within roughly 3 feet

and update he made it proof of shot, guess i was spot on about where it needed to land so thats cool I guess

shit, I want that hour back

So how do you make money? I have no idea how political polling works and shit I don’t even understand the electoral college. So I try to stay away from politics. I’ve found the easiest money on polymarket is made when FAKE NEWS gets tweeted out and people instantly market buy or sell based on this.

A good example of this was Elon being a guest speaker at the Bitcoin conference. The night before was the opening ceremony of the Olympics and he was partying in paris. Larah loomer or whatever her name is tweets out elons jet is headed to nashville for the conference to appear as the “special guest”. Aircrafts are all trackable if they are flying IFR and have a flight plane in place. So bitcoin influencers and trumpooors start tweeting that Elon is inbound.

The above tweet was enough to move the market by tens of thousands of dollars in a range of 20-30 cents. Its hilarious you have a plane miles out from nashville at prolly 40 thousand feet yet this is enough for people to take a 50% wager elon will show up. First of all elon doesnt give a shit about crypto. Elon only acts in his own personal benefit…always has…always will. Second of all you have to think what other places could he be flying to. It turns out that he has a super computer in memphis. This was enough for me to place some bids around 40-50 cents. Am I gambling sure, but fading btc influencers and trump tweetooors is prolly a winning strategy. How much thought did I put into this? not much. Is this a sound strategy in the future? prolly not

Now that we are plane tracking experts lets take a look at another market.

Will Taylor Swift attend the DNC in person?

So the whole point of these is to get better at thinking about predictions. Trying to fine tune this degenerate process can be tough and most likely losing money is the only way to improve.

At first I start thinking of a couple things

• Taylor Swift has supported the Democratic Party in the past

• Often multiple musical performances at political conventions

• DNC starts August 19th-22nd

• Taylor swift has a concert in London until the 20th

• Do the biggest musical names perform on the first night?

• London to Chicago flight time

• Track the private jet

At this point taking no under 90 cents felt like good value for a bet expiring in less than a week. So I start bidding collecting my $2.50 in rewards daily. First Day of DNC happens and no new news from taylor swift related to DNC on twitter. Market starts trading into the 94-96 cent range.

THEN BOOM her private jet takes off from London and appears over Canada

At this point there is a slight panic and start asking myself if the timing makes sense. Can she get there before the 2nd day of the DNC begins, yes. SHit, doesnt look great so I begin trying to sell. I ask my quant what he thinks and he sends me this photo.

o fuck is right. thats the best TA if ive ever seen one. But then I realize im making the same mistake as the Elon BTC conference people. Just because a jet is in the vicinity or looks like it could land is that enough to wager? In this case 10-1 maybe, in elons 60/40 of course not.

So now im trying to think of every destination / flight path. Where does taylor swift travel after concerts? Most of the time its a flight back to Nashville but heres the thing that flight path doesnt match up at all with London to Nashville in fact its not even close.

Then my quant sends me this

This might make more sense, Swift is dating travis kelce and there is a preseason game that day. Travis isn’t even playing and why would she give a shit about pre season football idk. At this point im lost, market is trading at 8 cents for YES and im not confident enough to send it. Asked some people and there was a crucial part that I missed.

Yep, weather. Even though jets fly at like 40k feet, you gota ensure the smoothest flight path for her excellency dont you? With this information I decided it was enough to buy NO again. About an hour later her jet is at 43k feet and not landing in Chicago and headed straight for Nashville.

So thats the end right, we made money? When in doubt there is always a sweat. Of course on the final day of the DNC we start seeing twitter pick up on a random picture of a private jet that flew from Nashville to Chicago and the market pumps to 13-15 cents YES. There seems to be a common trend here and I always seem to be fading pictures of random Jets at airports tied to celebrities. We doubled down NO and watched the girl from SNL perform on the final day instead of taylor swift.

Is there a ton of money in prediction markets? no

Is it fun to figure out obscure bets? i guess

Is this a complete waste of time? prolly

Now that I think I have somewhat of a decent decision tree for these types of obscure markets we bring ourselves to the final boss

Deadpool domestic box office sales sit at $578,961,068 as of today pending tuesday sales. Napkin math we need 21m by labor day weekend for YES.

Alright so here we go again, how do you try and figure this out. Lets just take the daily numbers and put it into google sheets

then lets group them by midweek and weekend. We can see that weekend numbers decline anywhere from 54% to 40% and midweek is pretty steady at 48%.

So lets just throw out some numbers, 40% of weekend / 40% of week / 40% of monday

annnnddd we get $596,422,487

alright im no genius but thats below 600m so why is YES trading at 84 cents?

In fact lets say there is only a 30% decline

annnnddd we get $599,625,674

again still no genius but thats also below 600m

so what am I missing?

Monday is a holiday so if it does normal holiday numbers plus weekend and weekday at 30% decline it will > 600m. This is a big IF

First thoughts are labor day movie sales are higher? But every google journalist thread and report says labor day isn’t even a big movie weekend. Alright just like in the swift to DNC I missed the weather. When its raining people might go to the movies right?

Now we need to figure out which states put up the biggest numbers.

Alright interesting so Texas Georgia and Florida might be shit weather which could drive larger turn out at the box office. Alright what else?

There are no other big movie releases which might drive sales down, thats good for number go up. Google trends seems to be down only? Is there some insane marketing push for labor day weekend? idk doubt it

WHY IS YES AT 84 CENTS???????

The largest holder is Decap, which according to most people is either retarded or a genius. Its always important to know your counterparty

So I asked

My math isn’t the craziest equation, its pretty simple. But how can his math be so different. Is decap a math wizard? Does being a math genius even help you in this case?

We are not talking 50/50 here we are talking 84/16

again, what am I missing?

and here in lies the mental illness? Have you found value or are you really just an idiot?

Am I betting my life savings on whether it rains in florida or not?

-fozzy

It’s important to understand the past to understand what could happen again. So lets start from the beginning, if your already familiar with crypto skip this part. Curve is founded by gigabrain math guy Michael Egorov. Its a decentralized exchange that started with basic swaps on stablecoins. It has since expanded to support other types of more volatile pools like ETH/WBTC/Defi tokens.

The token $CRV is used to vote on gauges which decide the rewards each pool will get every epoch. Users lock up their CRV for as many as 4 years to receive the highest voting power. It’s an inflationary token that is staked for voting and incentivizing liquidity pools. Now would I lock up a governance token for 4 years? no unless I somehow get tricked into snorting a bunch of glue. But people love to whip out the excel spreadsheet and start to extrapolate numbers. If I lock up $1,000 I will receive $200 every year sounds good right? Even with perpetual swaps which are derivate contracts on crypto that yield funding rates every day to normalize the swap price back to index people tend to get obsessed with cash flow. Whether its a defi token giving out an inflationary reward or longing / shorting a futures contract to receive your 9-5 wage cuck funding payment. People like it, hell sometimes I also put too much emphasis on it. 200% APR is cool in all if you don’t lose 80% of your principle…

Lending markets

So in decentralized finance Defi for short we have lending protocols. Users are able to deposit collateral and borrow against their positions. Decentralized and permissionless systems are great and all but they come with risk. When you allow token holders to set the collateral weights and what can be deposited this allows for potentially risky scenarios. Lets take CREAM finance for example.

Cream was a Compound finance fork where users could supply more exotic types of collateral that Aave and Compound didn’t accept. This incentivizes more users and deposits but also introduces risks. History taught us that certain collateral is very bad. After a governance vote Cream accepted SWAG token. SWAG token proceeded to go to 0 and it was very difficult for liquidators to step in to keep the system healthy. CREAM was left with 1.3m in bad debt and SWAG depositors prolly bought himself a nice apartment. Not to mention Alameda used CREAM heavily with tens of millions in FTX collateral. With decentralized systems, its not a question of if they will be abused but when.

So what happens next.

So as a founder its tough. You work very hard to create a project but how do you finally reward yourself? In crypto everything is transparent, except on solana nobody has a clue how to read the explorer. Cashing out is a very difficult problem in such a transparent system. One sell and every single community member hates you. So you have 2 options. The first is transfer tokens to a third party and just tell everyone “market making”, this is very popular and is a nice disguise. Now the 2nd option is more transparent but alleviates the sell pressure, yes thats right Lending Markets.

Now Mike starts talking to Kain and realizes he doesn’t have a reasonably sized house. For a founder this is very big problem, that must be dealt with in a decentralized manner ofc.

Mike needs to not only acquire the zombie punk of reasonably sized houses but also needs to one up Kain. Founders are competitive, they don’t become billionaires without the trait. So how does he accomplish this? Well he starts to deposit his CRV tokens in multiple lending markets. Mike owns 430 million tokens (roughly 50% of the circulating supply) and starts to scatter it out borrowing stablecoins ($USDC / $USDT) against the collateral.

Now this is all and well if the collateral value stays high. Unlucky for Mike, CRV suffers a $50 million dollar exploit and the token value starts to drop. People are now panic selling CRV and his collateral ratio across many lending protocols is falling.

I honestly had no idea the extent of how large this borrow position was and began looking at what the borrow rates were on his stables. Now keep in mind his on chain wallet had very little in stablecoins to pay off these loans. History tells us people often love to hunt positions, the “add fuel to the fire” saying. When a liquidation presents itself, the market usually locks in on the target. When you want to short something you usually want to find the trigger. What is going to cause this liquidation to happen?In this case it happened to be one of the lending markets safety mechanism.

The trigger 🧸🎯

One of Mike’s lending positions was $17 million in FraxLend. Now props to the frax team they were aware of lending risk and had in place a mechanism that under different levels of utilization would alter the interest rate of the borrowed asset to incentivize the user to pay off their loans. In this case the CRV/Frax pool was under 100% utilization. This meant that every 4 hours that goes by at 100% utilization the interest rate would double. If Mike doesn’t pay this off, this is THE trigger. There is no escaping an exponentially increasing interest rate when you don’t have any money to pay off the loan.

Like we talked about crypto is transparent. You can track his wallet to see if there are any stable inflow. As long as there are no inbound stables this was free money to short. So I said screw it and levered up the short while monitoring his wallet. The position at the time was a ticking time bomb.

The borrow rate for his fraxlend position ends up hitting almost 70% annualized and still is at 100% utilization. Now Mike knows this is a problem, so he starts to borrow more from Aave and paying off the higher rates on his frax borrow.

Not only this but he creates a CRV gauge that has high APY rewards to increase deposits to the isolated pool he is borrowing from. The end result is lowering the utilization thus lowering the interest rate on his loans. Pretty genius tbh and quick thinking

With the high APY on this pool the cavalry arrives. Keep in mind, its a short term solution because the interest rate is still 70%. He has just prevented the growth of the rate.

OTC from above?

Does Mike have the money to pay off these loans. Ofc he does. But does he wanna spend US dollars to buyback his governance tokens. You can make a guess to that answer. The end result of this was a couple of OTC transactions from many counterparties buying CRV from Mike at a discount to the market price. “Handshake” agreements were that they were to be locked up for a couple months…at least this is what twitter was told. CRV rallies, and Mike sits comfy in his $40 million dollar mansion and played everyone like a fiddle. If you want decentralized lending markets this is what you get. It never should have gotten to this point, and many lending protocols scrambled to protect their user deposits by putting pressure on the CRV positions they had. Chainlinkgod sums it up nicely. GG Mike, well played

Will history repeat itself?

Why did I make you read a couple paragraphs on stroking myself off to the only money I made this year? Well, because as the old saying goes…Risk doesn’t disappear, you just move it around. Not sure if its actually a saying but it sounds kinda smart. As it stands now Mike decides to increase crvUSD (curve stablecoin) aum, by borrowing it on new lending markets with CRV as collateral. Fraxlend position still exists and aave position has been greatly reduced. These are the updated positions from largest to smallest. Rough liquidation for all positions is around 0.36 which is roughly -45% from current CRV price $0.68

CRV has heavily underperformed ETH, and everyone seems to be abandoning el herium.

Seems safu what gives?

When I am not exit liquidity on shitcoins I find myself looking for shorts that if the market turns they will face forced selling pressure ( Luna good example of this). People like use the fancy word high convexity and it happens to work both ways. TLDR when it starts to move it MOVES hard, at least I think thats what it means. Now remember the safety mechanism fraxlend had that forced Mike’s hand. Well Silo, his largest position has almost the exact same mechanism.

Currently, its safe sitting below optimal. While still having a high interest rate on the borrow 33.5%. So whats the kicker? Let me introduce you another main character Sifu. It’s important to know who is proving Mike with the ability to borrow. In this case we can see the depositors of crvUSD in the isolated CRV Silo pool. Sifu has 20% of the pool representing 12m of the 60m.

Why is this important? Because Sifu can single handedly withdraw his funds and push utilization past 90% kicking the interest rate into growth mode. Now why would someone do that if they are getting 25% on their 12m deposit? Well, without other market participants depositing crvUSD into the pool Sifu could short crv pull his deposit and really put the pressure on Mike.

So as long as Sifu can withdraw before CRV falls and utilization gets maxed out he is successful able to play both sides of this trade. Has the ability to control the interest rate which puts pressure on Mike with a short on his collateral, but also gets ~20% on his deposit.

What next?

Mike will continue to incentivize the silo deposit pool, to minimize the growth of the interest rates. But currently his debt grows at almost 1m a month. There is no other lender that will support his collateral this time around if things start to go south. He is backed into a corner with his 2 largest positions having mechanisms that exponentially growth interest rates when things go bad (Silo, Fraxlend). This is such a doomsday overhang that sits over CRV. I believe his debt will grow at a pace greater than his CRV collateral in 2024 and it all ends in tears for most veLOCKOOOOORRSSSS.

Fade me, bet with me, do what you want. I’m just trying to provide some context of the risks holding CRV, and nobody seems to be betting on it.

Remember if im right I make a bunch of money, if im wrong this was all psyops…

Happy New Year

-Fudz

Edit 1/8/24

Situation is actually worse than I thought and I completely missed more loans Mike has. Total Deposits in SILO are over 124m and borrows are 51m. So in total we are looking at around 80m in borrows.

Not great

You hear a loud bang, in a panic you take off your noise cancelling Bose headphones only to see smoke coming out the right engine. Fasten seatbelt light DINGS as the pilot states the obvious “we goin down”. You would think jets can float down with one engine but unknown to you, pilots are in short supply and Kevin learned on his xbox

You crash land on an island somewhere off the coast of southeast asia. You and Kevin both survive but are rattled. Middle of nowhere… no cell service… having never been in this kind of scenario you panic at first, but slowly start to acclimate to the new reality. What you do have is a suitcase full of cash, high level math degree, and sophisticated knowledge of the financial markets space. Like any great investoooor you assess the situation. Heres what we know…

You start walking down the beach and to your surprise see more private jets washed up to shore. So at this point your either thinking kevins entire family must be pilots or there must be other sophisticated players on the island.

You keep walking to get your steps in and finally stumble upon 3 merchants…

• Jimmy sells bananas at the banana stand ( $1/lb )

• Harold sells parcels of land on the island ( $10/sqft )

• Mark sells fresh water ( $100/bottle )

You figure you have 10 grand in cash might as well figure out how to put it to work. Even though a couple private jets washed ashore the only people you see on the island are a buncha dumb apes. Gota be some edge right? So your start calculating the supply / demand dynamics and gather as much information as possible.

Hit up Jimmy and ask where he gets his bananas from.

Ask Harold how many parcels are on the island.

Ask Mark how many bottles of water hes able to sell.

What you gather is Jimmy gets his bananas from Harold, who grows bananas on his land. And Mark doesn’t give you any info, kinda sus. So after using whats left of your iphone battery you start to run some excel spreadsheets…

EXTRAPOLATOOOOORRRRRRR

Calculate how much land you can purchase, how many banana trees you can plant, your revenue from selling bananas to Jimmy by undercutting Harold. Numbers check out and seems like a steal, so you go back to Harold and get yourself some land.

You sit back enjoy the sun for a couple days realizing you just made the easiest trade of your life. But as you get up to grab another drink you spot a cruise ship in the distance. Its coming toward the island, your SAVED!! Can finally go back to your old life. Figure you might as well get your money back. So you go back to Harold and ask him what he will pay for your land. Harold laughs and quotes you 30% lower, at this point you have no choice but to sell. While you sell back your land you check with the other merchants. You look over at Mark and see he is still at $100 a bottle. You look over at Jimmy and talking to someone with a shit ton of bananas and you realize its KEVIN.

You both get on the cruise ship and realize Kevin has bag of cash with him. You ask how much he sold his bananas for and he tells you 10x what he paid for them. Your confused, can’t be possible. High supply, increasing inflation from trees, doesn’t make any logical sense. Kevin tells you he wandered deep into the island and hung out with all the apes while you were busy extrapolating relative value and ROI. Kevin realized they like the bananas, and all it took was one of the head apes to really drive home how much he liked bananas.

Over time you numbers are correct and it is the right trade. But timing when you would be rescued is impossible and forced you to capitulate. You start wondering…

Did Harold know the cruise ship would come?

Is Kevin actually a genius?

Did we really land on the moon?

Nothing makes sense anymore.

This story is either real dumb max cringe and I wasted your time or can help explain the absurdity of these crypto markets. Now you never wanna go FULL Kevin, but its important to understand who the participants are in the market. Your calculations may be correct, but that only works if the apes are also doing the same calculations and realize the value. Apes dont do fancy math and spreadsheets. At the end of the day they just wanna gamble and this continues to be cryptos best and only use case.

For example, is pacmanblur technically smart enough to develop some ZK proof layer 3 wizard fugazi tech. Sure no doubt. But the only way you make money off that is some 30 page report by a future PHD black turtleneck wearing buncha plants in office VC group highlighting how that technology is the future. But what does he do? Spins up a multisig with a referral pyramid scheme connected to a points slot machine. As I write this BLAST has 820 MILLION DOLLARS in it. Why? because thats what the current apes (market) want. Whether you think its healthy for cryptos future doesnt matter, the reality is they just wanna press a button to see some imaginary points go up with hope of future on chain wealth. Is this a problem? maybe, but you cant fight what the markets demands and pacman understands this.

Sometimes its best to stop trying to make sense of this market and submit to the absurdity. Ledger, a forklift loving dad from Alabama was gifted a Honorary BAYC which he sold for 200 ETH. A JPEG FOR FREE and in return gets HUNDREDS OF THOUSANDS OF DOLLARS in cash. Congrats ledger, nice trade. Its sounds dumb but sometimes its best to stop applying every day logic to these markets. I am eternally stuck in the middle of the curve, but maybe you anon can one day reach the on chain wealth of the left curve Kevins.

Happy gambling

- Fudz

Follow me for more ramblings

@fozzydiablo

At first glance Axie Infinity looks like a harmless simple click and drag game with a combat system a 4 year old could master but under the hood its a brilliantly designed economic machine that will churn to the constant demand of what I like to call “GDP Arbitrage”. In todays ramblings I will try to cover…

• The Axie ecosystem as a whole

• The Axie flywheel Breed / Burn / Scholar / New Players

• Breeding Margins

• Some trade ideas ( Fozzy Yolo )

Overview

Axie Infinity is a Pokémon-inspired universe where anyone can earn tokens through skilled gameplay and contributions to the ecosystem. Players can battle, collect, raise, and build a land-based kingdom for their pets.>

AXS Governance Token

AXS is the Axie governance token that represents according to them future earnings that come from Axie Treasury. Only way to currently earn AXS is from placing top 500 in arena. Future ways might include staking, Ronin DEX LP incentives, and who knows the hell knows. AXS is sent to treasury after users breed their Axies.

SLP

SLP is the token rewarded from winning adventure and arena mode. This is the main focus of the play-to-earn concept where players can sell SLP for real money / other cryptos. SLP is also sent to treasury after users breed their Axies

Ronin Side Chain

Ronin chain is a EVM compatible fork of ethereum. In order to participate in the Axie ecosystem you need to bridge your funds from Ethereum. From there all activity from marketplace / transfers / breeding all take place on the Ronin chain which is free up to 100 tx a day. None of the gameplay is recorded on chain.

Scholarships / GDP Arb

Scholarships are the lending of Axie teams to other people who play with your assets. You then split the rewards between the manager (you) and the scholar. The manager has full control of the wallet that holds the Axies so there is no risk in the scholarship program from a custody perspective. This greatly boosted the Axie community because people in poorer countries can benefit from the income as well as the managers can benefit from the yield. For example average annual salary in the Philippines is ~ 10k and if someone with some spare time and an android phone can make couple hundred dollars every week thats awesome.

Starting Out

A first time user has to purchase 3 Axies to start playing the game. Then you use your team to either play adventure mode (vs computer) or arena mode (vs another player) to earn SLP which is a crypto you can trade on AMMs / CEX. Each mode uses up energy which is constantly refreshed depending on how many Axies you have on your account, the more axies you have the faster the refresh rate.

So lets say you buy a team ~$550 and decide you want to play a card game for 4-6 hours a day. The average player earns roughly 120 SLP which is 50 from adventure, 25 for completing the daily quest, and the rest comes from arena wins. Currently SLP price is $0.112 so you can earn roughly $14 a day with if current prices hold and ~$550/$14 ~40 days until you have recouped your initial investment (This of course is subject to the price of SLP which we will get into later) So why isn’t SLP on a downward spiral to 0 with this constant inflation pressure?

Enter Breeding

The cost to breed 2 Axies is a fixed fee of 2 AXS and (150+150) 300 SLP if both Axies are virgins. The more these lovebirds hop in the bed the more costly it gets as the SLP cost increases by 150 each time up to the breed limit of 7. The offspring takes 5 days to hatch and will inherit traits from both parents in a Dominant / Recessive 1 / Recessive 2 structure with a 5% mutation rate for each gene. Sorry bible belt, there is no incest in Axie Infinity. As long as the 2 Axie’s share a common family tree they are unable to breed. The goal of the Axie team is to act as the “FED” to monitor the breeding (burn) and minting (inflation) of SLP.

As of Aug-23 the price of AXS has skyrocketed so much they had to reduce the breeding fee from 4 originally to 2 now. At times it was currently unprofitable to breed most types of Axies. They also implemented a SLP reward change to shift the focus more towards arena and less towards adventure. This had a massive effect on the floor price Axies because ones with poor traits could still complete adventure and farm reasonable amounts of SLP. Now that arena is the main source of SLP rewards the Axies need to have good pvp traits. The change was to reduce the inflation of SLP but in my opinion it only made the net effect on SLP price worse because by shifting the focus more towards arena, floor axies which normally would be subpar arena traits could still be sold for decent value. This change decimated the floor price of Axies which resulted in breeding becoming less profitable.

If the breeding stops there is no burn –> no burn –> SLP goes down –> scholars make less money –> less breeding.

Tail wagging the dog?

As the saying goes is the dog wagging its tail or is the tail wagging the dog. In this case we must ask ourselves is Axie demand driving the price of SLP, or is SLP driving the demand for breeding. I’m leaning more towards SLP driving the demand for breeding because of how reflexive this asset is. Lets dig in…

What is a reflexive asset?

Great pieces from Deribit Insights if your unfamiliar Pt 1 Pt 2

So how the hell did this happen?

It all begins in a time where DEFI yields are getting absolutely pummeled mid summer-2021 and nobody knows where to put there money. When people are starving they are pushed out further out on the risk curve. For us non VCs this actually involves risk.

The narrative had shifted away from DEFI and towards NFTs again. Axie was directly in the crossfire and benefited greatly from the media / CT exposure. People saw oh look I can pay X amount for a team and generate 200% returns with the scholarship program. Aave is giving me 3% on my USDC, sure why the hell not. So boom, we get massive demand for Axie buying and scholarships. But then people dig a little further and realize they can make 20-30% margins just breeding. This perpetual cycle started churning very fast as people realized how much money there was to be made.

Where does this cycle start we might as well ask the Tootsie Pop Owl. It flows like this…

• New Participants

  • As new players enter the system they need to purchase at least 3 Axies. This creates the initial market demand.

• Breeding Margins

  • With more Axie demand, it becomes more profitable to breed Axies

• Burn

  • As more Axies are bred, this burns AXS / SLP which can create significant buying pressure on both assets.

• Scholar $

  • If SLP appreciates this means that Scholar’s will make more money from playing Axie.

• New Participants

  • More money for scholars means higher yield for managers which creates demand for new players to enter the ecosystem.

So at this point you should realize this creates the ultimate reflexive ponzi with a 5 day lockup built in. Not to mention funding early on was insanely negative on the AXS perps which made up for most of the volume.

Crypto Twitter seems to love protocol revenue for some stupid reason and this Axie ponzi absolutely prints because of the incredible flywheel Breed / Burn / Scholar / New Players. Heres the thing, they seem to denominate the revenue in USD yet it mostly comes from AXS deposits in treasury due to breeding. So what happens, maybe just maybe -tinfoil hat on- some funds / whales notice that if they start squeezing this thing it becomes a massive catalyst to bootstrap the revenue shills and Axie flywheel. As AXS price goes, higher the revenue goes, more eyes on axie, more axie demand, more burn, more money for scholars. Ahh at last the self sustaining economy Mac dreamed of.

Fozzy Yolo

Welcome to the fun stuff. Hopefully by now you have learned how the ecosystem operates and how the tokenomics are designed. Now for the disclaimer, I got absolutely dummied holding a short in the most recent AXS pump because of coinbase insiders ( thanks guys ). But its a lesson and a catalyst I should have honestly seen coming, you live and you learn right. I will now go over 2 strategies for Axie I believe are strong plays…

Closed Ecosystem you say?

Since Ronin is a side chain we can track all the activity coming to and from this Axie ecosystem with a Dune Dashboard

As we can see this is ETH deposits to and from the bridge. You can really see the insane breeding demand that occured in the June - July boom. This was due to insane breeding margins as people were churning 20-30% premium in 5 day intervals. An easy way to track breeding is to look at AXS deposits because currently there is no reason to send AXS to Ronin unless you are breeding. As you would expect these are highly correlated. New players are bridging over ETH to begin their Axie journey and existing breeders are taking ETH out to buy AXS and SLP to continue their mass Axie orgies.

Above we can see SLP deposits and withdrawals in strong correlation with AXS deposits. You can notice that the deposit / withdraw balance was net positive deposits in the run up. This is a good thing which means the ecosystem was very healthy and balanced. Right near July 24th we can see the balance start shifting towards net negative deposits from the ecosystem. Because the marketplace is denominated in ETH as you can see from the chart below these are all connected. The marketplace doesn’t seem to adjust itself very quickly and is very sticky to ETH pricing where it really should be adjusting itself to USD priced demand.

So what is happening?

When an Axie is breed it “burns” 2 AXS and 300 SLP, but that Axie if used is perpetually minting SLP. New ETH deposits needs to increase exponentially to keep up with the perpetual output of SLP rewards. As the charts show this is not the case. ETH deposits are falling while SLP withdraws are almost off the charts at this point. This ugly unwind has been damped a bit by ETH going up because the marketplace / breeders gets a boost in USD appreciation. Why do you think FTX listed SLP-PERP. I can’t tell you its not because of the volume / fees.

If you were to choose your fighter would you pick…….

• Twitter traders who pick up a crayon and draw a falling wedge?

• Math wizards from Alameda?

  

Short SLP here

I don’t have access to futures?

At this point in time it is hard to determine how much an Axie scholar will make over the next 6-12 months due to the uncertainty of SLP, so the next logical step is to look towards breeding. Since breeding costs are fixed, you want to look for the highest margin traits. This can be done by scanning the marketplace by traits and determining relative “floors”. 6/6 pure Axies mean they have all 6 traits the same class. This gives them an extra boost in stats and they are desirable. Axies with every single traits from Dominant / Recessive 1 / Recessive 2 all the same are very rare and fetch a fat premium.

So the focus in terms of margin is on these Axies. You can run scripts based on traits to see how efficient the marketplace is. If you are able to determine you can buy Axie X and Axie Y and sell their offspring for a profit based on trait probability you could churn a nice little business. You can estimate your breeding offspring margin based on floors. Now this is all subject to change because there is also a 5 day hatching period but this is in my opinion the safest way to approach this ecosystem.

Conclusion

Axie is a cool concept and its a great start for blockchain gaming. They realized early on they needed to get off Ethereum because of the high fees in order to gain any major adoption. Don’t get me wrong I am all for creating new ways for people to make money especially those who are unable to get jobs due to certain circumstances, but people seem to forget that the money has to come from somewhere.

In order for “Play to Earn” to become sustainable you need to constantly create new demand. Every game ever created has had to deal with inflation from in game currencies and there are many ways to deal with this. Axie will need to get very creative in creating new burn opportunities because demand comes from the money you can make not the gameplay itself. A couple ways they can approach this…

• Land mechanics

• Items

• Axie upgrade / burns

• Pay for ronin transactions with SLP (not even sure if possible)

• Host many tournaments with SLP ticket entries

• Host a ranked arena where competitors play for AXS they stake, again SLP ticket entries

Axie will survive no doubt, but they have a very steep uphill battle. I think its more of a financial adventure than enjoyable game for most but that wont stop the concept of GDP Arb being gamified into these colorful pets.

If you have somehow scrolled this far I hope you can see whats happening as this ecosystem starts to unwind. As I have mentioned the recent appreciation of ETH has provided some what of a buffer and if that goes….God have mercy.

Reflexivity is a beautiful thing. But the same ponzinomics that pump it up also can send it right back down in a very ugly manner.

Has the music stopped for Axie?

-@fozzydiablo

Best place to trade = FTX Exchange

If you also find yourself scrolling crypto twitter 24 hours a day you might be familiar with what I like to call the “Hsaka phenomenon”. Not only are we witnessing a wolf who can somehow use Twitter, but a wolf with the ability to move the crypto markets. A wolf you say?

Who is Hsaka

While we don’t know much about the legendary discretionary trader we do know they enjoy the memes and the volatility just like the rest of us.

Unlike the rest of us meme loving degenerate trading animals Hsaka wields a power few of us have. Harnessing over 200k followers and a rock solid backtest of great market calls he can use his social capital to move the markets.

Pays to Tweet?

It all starts with Hsaka tweeting $ with the ticker. Not only is this good for increasing the reach of the of the engagement but it allows algos to easily pick up on the tweet itself. Combine this with a NLP bot trained on Gainzy’s tweets and pepe the frog memes we might have ourselves some extra beer money. Below is every $LUNA tweet with its PnL (1m to 2h since tweet) and volume profile. Bear with me on the charts, girls think giving birth is hard try plotting something with matplotlib….

Wednesday, August 18, 2021 1:00:59 PM

“What’s the next $LUNA / $SOL ?” he asked ignorantly, succumbing to the same trap on a dozen prior occasions, obliv… https://t.co/kSNZPmWGen

Wednesday, August 18, 2021 11:25:35 PM

Oh? $LUNA ATH (again) https://t.co/kcrWUBT3IW

Thursday, August 19, 2021 4:45:03 AM

$LUNA is yet to enter price discovery against $ETH btw. https://t.co/MTHMWRZyho

Tuesday, August 24, 2021 12:21:18 AM

That was a good post ATH break chopsolidation range on $LUNA. Second leg soon?

Saturday, August 28, 2021 3:59:11 PM

Tabasco is up to something. I can feel it. Closed a bunch and shoved into $LUNA. Can’t complain about 55% in 12hrs.

Sunday, September 26, 2021 10:51:28 AM

Heard Novo gets stripped of his cameo credits in Billions if $LUNA doesn’t trade back above $40 soon.

Monday, October 4, 2021 7:10:40 AM

Heard Novo gets a cameo in the next season of Succession if $LUNA trades above $60 soon. https://t.co/ncanETy1EW

Monday, October 4, 2021 4:08:37 PM

$LUNA https://t.co/DDIDfO9LQa

Thursday, October 7, 2021 3:32:03 PM

L1s catching the strongest bid. FTM, ATOM. Novo, when $LUNA?

Wednesday, October 20, 2021 3:45:21 PM

$LUNA (along with some other L1s) casually outperforming during a BTC ATH break. It’s alright, you can continue wa… https://t.co/1zgt467z1W

Wednesday, October 20, 2021 6:07:59 PM

Buy high, sell higher. $LUNA https://t.co/xSFEbS7q00 https://t.co/czuyCC9vL6

Friday, October 22, 2021 6:08:53 PM

Intern just submitted their $LUNA report. Was pretty extensive, will try to distill it as well as I can. 🧵👇 1/n… https://t.co/axcCZukBpS

Wednesday, November 3, 2021 8:10:07 PM

Novo definitely rolling that into $LUNA https://t.co/kua9rtWQHK

Status Report Kowalski

Overall you can see from the volume profiles something is clearly happening. Below we can graph the returns of each tweet. Maybe the effectiveness starts to wear off or was it simply the momentum of the market during those time periods?

Regardless of the reason, there was still money to be made off these tweets if one acted swift enough. Just buying every tweet associated with $LUNA would net you ~ .50% even if you were late to the trade. Now enough with Novo’s bags lets look at his past ~200 tweets.

Last ~200 tweets

As you can see from the chart, a mix of low cap / volume tends to outperform which would make sense given it takes less money to move the market but you also have to consider the sample size. As you can see from the top performers there is almost no buying until after Hsaka tweets.

This trend is very similar for the other low caps / top performers. Even including majors like BTC and ETH we still have a positive performance which is pretty impressive.

Are you being dumped on anon?

Taking a look at the average performance for every tweet past a 30s-5min window we actually see no significant drop off but rather a increased profit. There is little data to suggest there are active asks waiting to fill off the apes. Although there is a slight mean reversion on low cap tweets we can see in HBAR and KSM specifically. So if your no gunslinger id stay away.

Change in open interest follows a relatively normal distribution with mean increase of .70% and STD of .12%. This would suggest there is a slight bump in increased activity following his tweets in a 5 minute before and after timeframe.

Conclusion

Im no math wizard but I believe there is enough here to see what kind of power Hsaka wields. Is he most likely very good at recognizing momentum? prolly. Is there money to be made off of this? Maybe, but you would need an algo that solely focuses on determining if there is enough liquidity present to market buy and also only focus on low cap stuff. The best trade could be to become Hsaka best fren and know his positions before he sends out the tweet. But for all we know Hsaka may work alone as he doesn’t want anyone else stepping in his tracks……

Funny enough while working on this blog I had Hsaka notifications on. Saw a tweet about $ONE some L1 shitcoin. Instantly put down my shake shack burger (gota add cherry peppers btw) hit the market buy and continued to watch the apes bid.

PS…look at the data you might find something interesting. But im no Fredo

chip and a chair frens

-fozzy @fozzydiablo

shout out to Tardis. without their data this would not be possible. if you are looking for data that is reliable and clean they are the best option.

An Ant Mill is an observed phenomenon in which a group of army ants are separated from the main foraging party, lose the pheromone track and begin to follow one another, forming a continuously rotating circle, commonly known as a "Death Spiral" because the ants might eventually die of exhaustion.

Part 1: Balance

Crypto has 3 main participants

• Investors (Funds, VCs)

• Builders (Shadowy coders)

• Traders (Degens)

All 3 of these actors play a vital role in creating our markets. Without investors throwing money at concepts in their early stage of development, builders would have no incentive to create. Without mass speculation from traders, investors wouldn’t make any returns. All 3 must exist in perfect harmony, whether they like it or not. A perfect example of this is Axie Infinity. Without degens pumping this thing to billions in FDV, all spinoffs wouldn’t get funded and investors wouldn’t be pocketing their management fees on Metaverse / Game-Fi funds. Can’t complete the puzzle without all 3 pieces.

Part 2: Rotation

If you have been in crypto for more than a couple weeks by now you should pick up on this concept of rotation. From my understanding outside of crypto, the journey of money takes a much slower regulated approach. Projects are funded multiple times from early to late stage, then hope they can be acquired or eventually IPO / SPAC to dump on your average couch dwelling Robinhood user. Since crypto is the wild wild west this cycle is greatly expedited but with more transparency. Very profitable for early investors and unfortunately less so for many who find themselves summoning the wrong card. There only exist 2 outcomes in this scenario…

Because this process is much faster in crypto there is always a push to constantly create new narratives. People fail to realize how a very small subsection of the entire crypto ecosystem control this narrative. There is a reason why your average retail trader has a 60mg dose of adderall in a PEZ dispenser on their desk.

Defi → NFTs → Game-Fi → DAOs → L2s → Metaverse → L1s

Defi or Metaverse, no matter what label you slap on it’s always been the same trade.

Part 3: Lost

So within this balance, where do you exist? I can only speak from a traders perspective but to understand these markets you need to put yourself in the shoes of each participant. In this endless rotation the worst thing you can do is blindly follow the ant in front of you. You want to consume as much information as possible but at the same time make your own decision at the end of the day. Why do my friends spend $50 a month on some guy running a chat room (paid group) telling them which basketball team will win the next day? It’s because when they lose, they can put the blame on someone other than themselves. Losing is the best education you can get especially if you are able to identify what went wrong.

Always be asking yourself questions and look for where the incentives are. Why is anon pushing this? Why is this fund buying XXX token? Crypto is relatively transparent, this is a luxury for your average crypto trader. Learn to navigate the chain by using tools such as etherscan or dune to find out for yourself what is really happening behind all the shitposting and shilling. Only way to make money consistently is learning who is really putting up the signs.

Part 4: Exhaustion

If your still alive, good stuff. Maybe this blog can inspire some of you to think differently or maybe i’m just wasting my time trying to learn where commas go. Regardless, during this deep bear market liquidity will continue to dry up and market participants will get more ruthless as CT will continue to turn on each other. At this stage it’s all about finding willing buyers to offload a majority of all this dog shit. Hell, the majority of CT still posting are only around to offload their bags or to launch their own NFT project before it actually starts snowing. Retail volume is dead, Coinbase is nowhere to be found on the app store, everyone hates Matt Damon, and even your grandparents who you shilled crypto to over a nice family gathering are started to question the tech.

The name of the game is and will always be surviving. Risk of ruin or whatever cool term they call it these days. I don’t care if you’re a Zen master or do hot yoga every day, crypto takes a toll on your mental health. Maybe instead of staring at the 1 minute chart all day you might decide to open up some coding tutorials. Traders have a full head of grey hair by the time they are 30, builders are retired by then. Crypto is a the greatest mmo with the most equal playing field, thats why we are all attracted to it. Anyone with an internet connection and some smarts can make some beer money. Enjoy it, but as the WoW loading screen tooltip famously says “everything in moderation”.

At the end of the day… those dead ants in the middle of the spiral? In crypto, we call that effective altruism.

Good Luck anon

A Bug’s life top 10 movie btw

follow me on twitter for shitposts @fozzydiablo