9 Things I’m Reading
Alright, first up on the list is this solid proposal from MonetSupply around an upgrade in MakerDAO’s tokenomics. The key thing that pisses everyone off about Maker in its current form is how MKR is burned. Maker as a business is probably one of the most solid ones you can get your hands on and is at a $1.8b FDV which is on the very low side considering they make $100m+ a year with no token incentives. Maker is quite literally indestructible by this point and I’m very confident that it’ll be around in 10 years from now. I don’t own MKR but the prospects of owning it are changing by the week for me. One key distinction around this post which I found interesting was opting against the “ve” model since it means that a vampire protocol can be built on-top, effectively controlling the Maker protocol. Instead, a simpler 2-3 week lock period with xSUSHI style compounding rewards was chosen. If this goes through or gains momentum then I think a huge narrative re-rating could be coming for DeFi’s king protocol.
My next favourite tweet this week was from CeterisParibus, spitting straight fire. I’ve said it before but I’ll say it again. High. FDV. Tokens. Are. Crap. They’ll die a painful death and every protocol with a small market cap, huge FDV will need to sort itself out otherwise community will have a down-only token that only destroys trust with the dwindling community. Like as with retail, why buy a token with a $1b+ FDV when the chances that the team executes to achieve a $10b+ FDV are very, very small? 10x for 0.1% success rate is not a great trade. Expect more pain for tokens with out-of-proportion market cap to FDV ratios. Low float high FDV is a game that ends with the bull market “frens”.
Progress is in the air. The Synthetix team have been hard at work and whispers are starting to emerge and spread through the ecosystem about what they’re brining out next with v3. Future, improved debt pool mechanics and cross-chain support all coming very soon. The community is alive, the team is shipping and the community is still around. While I personally find the FDV a little on the richer side, anyone who is fading DeFi at the moment is clearly a trend chaser and missing all the incredible innovation and hard work happening behind the scenes. Oh well, they’ll come back in a few months.
In an expected yet unexpected move Stripe signals their move into Web3 by announcing full crypto support! I can imagine this puts a lot of existing businesses in threat given the massive amount of compliance infrastructure that Stripe already has behind them. I wonder how “legit” this is though since ultimately Stripe is controlled by banks and given how certain banks really hate crypto, Stripe has to listen to what they have to say to some extent. I’m speculating here but something doesn’t feel quite right here, if anyone has a deeper perspective on this I’d love to hear from you.
I’m no macro expert by any means although this thread is a great primer on what’s going on with Chinese markets with relation to the events unfolding with Russia vs The World. I was reflecting on this today and it feels like the macro situation is way crazier than anything happening in the crypto world right now. While some cite this as an argument to hold off and stay in stables, one astute investor I spoke to said that if you’re setting your crypto investment thesis on macro rather than fundamentals of projects you’re probably going to be a) wrong about the macro since very few are experts b) underperform since you missed out on the best buying opportunities for certain tokens
NFT marketplaces aren’t slowing down anytime soon. MagicEden’s co-founder, Zhuoxun Yin, is one of the most plugged-in individuals in the space and it’s incredible to see the journey the entire team has been on. Most notably