I was farming a bit on futureswap as a liquidity provider and it was one of the worst projects I have ever invested in. The smart contract to claim your tokens gets bigger with every epoche (aka every day) at 100 Gwei claiming the (unmovable) tokens costs me more than 0.1 ETH to claim.

There is barely any trading volume due to gas costs. This could work on layer 2 or an ETH sidechain, but right now it us unusable for LP and traders. Obv it needs more trading pairs than just ETH/USDC

I agree currently it's not usable, but all they're really doing is testing their product among a small group of traders/LPs while distributing their tokens to the people most involved. Token is not transferrable so that should tell you how early stage it is. In general this is better than attracting lots of purely parasitic farming that just wants to farm and dump.

Their next upgrade will be moving to Layer 2, much like dydx just did (though that's in closed alpha right now, but they've had over 80,000 signups!).

Trading pairs are voted on by governance. They initially planned to add more sooner, but given the gas costs they've decided to focus 100% on getting to layer 2 ASAP. I'm confident WBTC/USDC, ETH/WBTC, and probably some of the bigger DeFi names will be added once v3 launches on Layer 2.

Re: claiming rewards, they are going to fix this; since the token isn't transferrable, there is no reason to claim and therefore gas-optimizing the claim is low priority, but will get done before the token becomes transferrable (I think). I wouldn't recommend wasting money claiming tokens that are not transferrable.

It's basically a proof-of-capital launch + generous trade mining.

I think having exposure to AMM dPerps and order book dPerps makes sense.

4 of the 12 DeFi investments 3AC shows on their website are in the dPerps vertical (Perp, dydx, FutureSwap, DerivaDEX) and they also have a smaller bet in MCDex if you peak at their farming addresses. To me this seems like an enormous category to win and their portfolio construction seems to support that

Well, obviously there is a lot of money to be made with dPerps verticals. The outcry when Bitmex introduced KYC was VERY loud, a good decentralized option would be amazing.

Obviously there is a chance futureswap will succeed, but my (very early) experience with it was pretty shitty. Hopefully they will build an amazing product, but the competition is tough.

Super simple math from a moron. When bitcoin hit 19.5K in 2018 ETH was at 1250. Bitcoin is at 60K which means ETH should hit ~3800. Very undervalued imo. I'm gonna buy a few.

^^ That's a poor mental model.

ICOs were a massive demand imbalance that created an insane run in ETHUSD / ETHBTC, and a subsequently harder crash when it all unwinded. I wouldn't get in the habit of predicting future value based on past [relative] value.

Stupid ape here. A friend is setting up a node for Rocket Pool launch this summer. I'm considering partnering with him and supplying some of the Ethereum. Anyone dialed in and familiar with the project? Any thoughts on it?

Agree and pretty much try to eat up every piece of content Su and company puts out. I've been bumping around the blogs and discords of the 4 mentioned above. Anywhere else you recommend one could do their own research and get exposure?

Good post thanks. Bought a couple anyway

can't you argue that the current demand for DeFi should have created a similar demand imbalance for ETH by now, and that the fact that ETH has "relatively" underperformed since its last peak does in fact reflect some sort of market inefficiency/potential for increased alpha relative to BTC?

Crypto prices do not move linearly with fundamentals and tracking 30-day, 60-day, 90-day relative performance is kind of a pointless endeavor. Ethereum has outperformed Bitcoin over longer time horizons and given it's a cycle behind Bitcoin should continue to do so.

But Bitcoin has a finite supply driving price action. Ethereum supply is growing and future supply mechanics are still indeterminate from my limited understanding.

I know there are proposals to make Ethereum more deflationary but I'm unsure how likely they are to pass.

I'm fairly new to this space, anyone able to point me to material that explains why Ethereum price should go up over time? Surely it should hit some sort of equilibrium and become inflationary at some point as currency. Is the bullish asset argument that we are nowhere near that equilibrium and demand pressure will outstrip supply for a long time yet?

You can look at a Bitcoin log chart for 5 seconds and tell short term price movements are not based on fundamentals. You can draw a linear trend line and see prices are above and below trend about 50% of the time.

Sort of... but in general markets get more efficient over time, not less. So your prior should be: "it's more likely that 2017 ETHBTC mania top price was inefficient than that current 2021 ETHBTC price is inefficient". And also that the magnitude of the inefficiency was more back then than it is now.

Ethereum has outperformed BTC since the launch of COMP (which was the spark that ignited DeFi/yield farming).

But this also created demand imbalances for:
-stablecoins
-WBTC and other wrapped/synthetic versions of BTC
-DeFi protocol tokens

Yield farming and DeFi token trading leads to lots of needed outflows for taxes on realized gains. This tends to affect BTC less as there's more HODLing and less active use.

There's also the ETH2 deposit contract which is significantly more locked than DeFi ETH is, but also must factor in that the types of people who deposited early into ETH2 are likely to be people with long time horizons on their ETH investments who wouldn't be sellers today anyway (even without ETH2 deposit contract).

Cliffs: There are lots of factors and flows in play; and IMO nothing even compares to the ICO demand sink because the flow was basically: People buy ETH with fiat or BTC-> buy ICO tokens with ETH -> many ICOs that receive the ETH sell *none* or very little of it.

Even if you use ETH for DeFi, it's generally liquid within 1 tx (not anywhere near *locked* like ICO treasuries were for a while). People rebalance into stablecoins, take profits into BTC, buy houses with profits, etc.

Does anyone subscribe to The Block Research and have opinions on the quality of the content, particularly as it pertains to DeFi? The free report they provide is comprehensive but curious if the rest are on par.

I think there's so much content out there paying for anything is silly. Maybe Nansen if you want to do that level of address analysis, but beyond that not sure what I'd pay for in crypto.

Nansen
Parsec
Delphi
Messari

are all worth the money if you are dealing with any size at all

Oh you are are ya? You realize bitcoin production got cut in half and ETH didn't do **** right? Go ahead, load up on ETH with your dumb ****ing math.

BTC is proving low inflation is key. Time and time again.

Lol why you so mad. Probably cuz you don't own any ETH, fish

I'm buying more ETH right now just because he posted that.

BTC supply before the halving: 21m
BTC supply after the halving: 21m

However, if you're a fan of this narrative, you are absolutely going to love Ethereum with EIP-1559 and PoS.

Also think it's likely the block reward is cut from 2 to 1.5 or 1 by the end of the year if the merge does not happen. But the merge may also happen this year, which would be even better scenario.

Listening to Justin drake on bankless podcast made me absolutely damp.

Why bother yield farming/generating APY for stablecoins and all that jazz when you can just buy more ethereum?

I'm sure the answer is you can make more money from the latter than the former, but i'm personally not quite understanding how.

I do understand staking your ethereum that you've already purchased in pools tho.

Obviously I ask this because everyday as I do more research it becomes more and more clear to me Ethereum is extremely undervalued. It's almost certainly going to overtake bitcoin in market cap. It's probably going to be the greatest investment in history.

The main idea is you take the 100% yield and buy more btc or eth with it.

risk management / diversification

lots of great yield opportunities have been basically stablecoin only (YFI launch, Curve launch, Alchemix) or 50/50 crypto:stablecoin in LP pools (Sushiswap launch, YAM launch, Uniswap launch). You could of course use crypto as collateral to borrow stablecoins, but that comes with 1) financing cost 2) gas costs 3) loss of capital efficiency due to over-collateralization 4) added complexity of managing CDPs and potential liquidation penalties (even further loss of capital efficiency if you want to minimize liquidation risk)

but the other reason is, no matter how crypto native you are, people still have obligations in fiat. and let me tell you, yield farming generates income/short term capital gains like mad; you don't want to be all in on something that can fall 70+% rather quickly when you're going to owe the government regardless

in general, the risk:reward of stablecoin farming has been quite good, and it lowers the volatility/improves the composition of your portfolio by adding a +EV, uncorrelated bet. I always keep a sizable allocation to stablecoins for these reasons.

(I also think it's obvious that the EV of holding ETH is less than 200%/year, so when good stablecoin farms arise, it's a clearly better bet than ETH)