Things I’m Reading
Looks... Rare? The SEC, “Community Owned”, Market Thoughts
Things I’m Reading
The past week or so started off with LooksRare dominating the discussion with them reducing their emissions and then immediately seeing a drop in their trading volume simultaneously. The OpenSea “competitor” that finally offered a token showing its true colours? What’s interesting is seeing how LooksRare volume spikes at very specific times that totally indicates healthy activity and definitely not a bot... Regardless, if you’re buying tokens with heavy token incentives that unlock immediately then you’re the final bag holder. Be careful folks.
That wasn’t all for the LooksRare folks. We then basically had the dev team cash out $70m which caused massive controversy amongst folks. I’ve got a few tweets that talk about this issue from both sides but I’ll start off from the “bad devs” angle. To be honest, any project which lets builders walk away with 8-figure wealth by just building a product, layering in a complex token incentive model and then cashing out during the peak of the platform’s hype is “dumping” on their users. That being said it’s also up to the market to start demanding longer vesting and lockup schedules for team/investors so also not really anyone’s fault if everything was transparent and disclosed. However I think the counter-point to it is that the way these schemes are structured is highly complex and takes detailed research to truly understand — which no one does until number go down 📉
This wasn’t really covered last week but was pretty big in my view. BuildFinanceDAO suffered an on-chain governance attack. What this means is that someone managed to pass in a malicious proposal and because everything is done on-chain there was no way of possibly stopping the attack. The DAO lost about $470,000 and has done some long-term irreparable harm to those involved. I’d recommend giving this a read for sure.
BlockFi got charged $100m for “violating the law” for offering its high-yield product. On the surface it feels unfair and unjust, however on a deeper level it’s also a victory that a certain level of regulatory clarity has been set and paved the path for others forward. The whole ordeal is a bit of a roundabout way to establish clarity but it is what it is. This also means the flood gates for institutional money chasing crypto yield is opening up wider. Yields 👏 Will 👏 Compress 👏 Down 👏
Galois Capital has some pretty degen stuff written but this is definitely a great piece that talks about the state of the market and what the collective psychology of this market has been thinking and acting on. One of the most iconic quotes from this post is the following:
HFT Chicago prop shops prefer SOL. Koreans prefer LUNA. Grad students prefer AVAX (it’s the only professor coin which has played out well after all). Andre disciples prefer FTM. Valley VCs prefer all of them because, hey you only need to be right once to return the entire fund right, and sometimes smaller L1s like NEAR because there’s greater billions to grow when you aren’t already a couple of yards in market cap. ETH maximalists now sit in the same camp as old BTC maximalists as they try to defend against attacks from all sides from the “new”.