ETH: value store
All open & permissionless
Never before have builders had access to these
Ethereum gives developers superpowers
Only $96m SAI remaining
Soon there will be none
The most obvious opportunity in open finance right now: a governance lite stablecoin collateralized purely with ETH
I honestly expected another project to step up & take this on by now
Russia, India: exploring an alternative to SWIFT
China: launching a central bank digital currency
Europe: exploring alternatives to dollar dictatorship
SWIFT, FedWire, & the dollar won't reign king forever
Crypto presents a neutral alternative that all world powers can use
Breakthrough money protocols:
2016-2017: Fundraising (ICO)
2018-2019: Lending (Maker/Compound)
What's in store for 2020?
Coinbase just launched a staking service
Binance already custodies 2% of all ETH
What are the implications if the crypto banks dominate staking?
The core values of open finance:
1) Censorship resistant. No one can stop it.
2) Decentralized. No one controls it.
3) Permissionless. Anyone can use it.
4) Secure. Anyone can verify it.
Yesterday Microsoft rolled out a service to onramp assets to Ethereum:
- fab tokens
- loyalty points
- original artwork
Stuff like this is now happens weekly
Reminder: ETH is 4 years old 🚀
Tether has fallen into Ethereum's gravity well
Tether market cap:
ETH: $2.02B 👈
ETH: 83.3k 👈
Tether active addresses:
ETH: 39.7k 👈
3/ What are the reserve assets?
ETH and stabilized ETH in the form of DAI provide the vast majority of liquidity in protocols like Compound.
ETH is the permissionless reserve asset.
USDC is showing signs of life too, a contender for the permissioned reserve asset?
2/ Is DAI used in money protocols?
Yes. Increasingly so. Over 22m DAI now locked in money protocols. That's 26% of all DAI supply.
Pretty much none of this existed 18 months ago.
This is good for ETH since DAI demand is ETH demand.
Charts on money protocols & ETH:
1/ Is more ETH getting locked in money protocols than being issued?
Current ETH issuance: 4.6% annual
Since Jan 2018 ETH supply grew 12.15%
ETH locked in DeFi currently consumes half that amount
DeFi demand is sucking up new ETH issuance
To the general public there's absolutely no difference between BTC, ETH, XRP, LTC, BCH, or TRX
They just want the one that goes up the most
If you know the differences between these assets you have massive information asymmetry right now
The genius of Ethereum is how it recruits others do its work
An adaptive trait
You hold ETH? You're adding to its security
You develop on ETH? You're building out its tools
You write about ETH? You're recruiting new people
Competing projects are even helping to build ETH 2.0
To me, the argument isn't why Proof-of-Work?
The argument is, why Proof-of-Work if Proof-of-Stake works just as well?
Risk free rates are coming to Ethereum
DSR (Dai Savings Rate) = risk free rate of DAI
BETH (Bonded ETH) = risk free rate of ETH
Much of the future economic activity in open finance will be tied to these rates
Days like this are why you don't buy crypto on margin.
Build crypto wealth slowly.
1. Buy ETH and BTC
2. Dollar-cost avg paychecks
3. Don't use margin
4. Don't trade
5. Stick to the plan
This strategy works best for 98% of the population.
It takes 10,000 hobbyists to change the world.
10,000 Usenet hobbyists gave us the internet.
10,000 Homebrew computer hobbyists gave us the PC revolution.
10,000 Bitcoin hobbyists gave us money without authorities.
10,000 DeFi hobbyists are now giving us a bankless money system.
I understand being bullish on ETH and Ethereum.
I understand being bearish on ETH and Ethereum.
But I do not understand being bearish on ETH and bullish on Ethereum.
I think a new generation of millennials & gen-Zs will learn financial literacy through crypto.
Don't give me your opinion on Ethereum until you
- Open an argent wallet
- Send DAI using InstaPay
- Lend ETH using compound
- Take out a Maker CDP
- Trade something on Uniswap
Most of the people with hot takes on Ethereum haven't done even one of these things