Coming at you live from goblin town
Updates on promising technology, undervalued technology and everything in-between
Spare me the misery
The market has been pretty rough lately. Instead of theorizing on why these cursed coins have experienced such a purgatory of price action, I decided it’d be useful to take a look into some of the more promising sides of crypto. Despite the nonsense and selling, many great things have been occurring within crypto across its various sectors. I’m more of a “glass half full” type of guy, making it easier for me to see the positive despite a sea of red that’s battered our beloved internet coins. Maybe it’s just the researchoooor in me, but I find it tough to be bearish crypto on a long time horizon.
I’m in it for the long haul.
I wrote a similar article to this about a month back, here’s a link. Observing the good and potentially promising projects that are both released and upcoming can not only serve as a good price action distraction, but can maybe give you a little bit of “aLpHa” while your net worth plummets in real-time, for 24 hours a day, seven days a week.
As a brief disclaimer, I hold positions in some of these tokens and this is not financial advice. I simply like the coins. Some of these may be low caps and I do not endorse them, I typically try and avoid getting into ponzis so invest at your own caution. This article is meant to serve as an explainer and I don’t want you to go broke chasing a revolving door. If you’re lazy and don’t want to read the rest of the article, I’ll give a brief TLDR, leaving out some topics so you’re incentivized to read the entire article, mwahaha. If you don’t want spoilers, cover your eyes and skip to the next section.
Beanstalk got hacked. In times like these, you have to wonder if putting money in magic internet beans is really a good idea. Hopefully they can bounce back in some form.
[Redacted] V2 is looking to be a pretty bullish catalyst for the protocol, with features like Hidden Hand and Pirex offering additional revenue streams that’ll benefit both the protocol and token lockers. We like the butterflies.
Optimism is more than likely going to release a token soon, which will kick off the inevitable L2 szn. Prepare accordingly if you haven’t already. Will expand on this if you wish to keep reading.
Bridging has become an extremely hot topic, with protocols like Synapse and LayerZero making up a large amount of the talk surrounding this upcoming sector. As more blockchains continue to grow TVLs and DAUs, bridging solutions become increasingly important for distancing crypto from its fragmented liquidity woes. There are also a handful of new bridging and blockchain interoperability solutions popping up every week, so be ready for slight oversaturation in the months to come.
Sudoswap is a crypto-native darling, providing utility for NFT swaps (liquidity!) and bridging the gap between DeFi and NFTs. Jpeg’d is cool too, and there’s even a new index of NFT related tokens out there on the market, which I think is pretty sweet.
Despite an absolutely silly number of high FDV shitcoins, DeFi on Solana is looking more promising with each passing day. Protocols like Drift and Zeta are leading the pack.
Alchemix V2 should be a pretty solid upgrade for this DeFi blue chip. While the token has experienced a brutal “down-only” price action since inception, ALCX could be a good pick if you’re looking to long a battered winner. There a few others like CVX, YFI and AAVE that I’ll discuss later on from a different perspective.
NFTs have seen increasing volumes as of late, with projects like Moonbirds and Miladys leading the pack. I’m still uncertain as to where NFTs end up in their final form, but trading these digital pixels is enjoyable & the PFPs can be very appealing at times. Maybe holding blue chip NFTs through the rest of this year could be a safe bet, I’ve been told that people like art and collectibles more than they like tokens.
4Pool is a pretty big development for the Curve Wars. Do Kwon + [Redacted] + Frax = some kind of beautiful synchronicity that will be very good for token holders in my uneducated opinion. [Redacted] V2 will also be very interesting.
I’ve become increasingly bullish on the future of GameFi, yet extremely disatisfied with the sector’s current state. I’d like to work on a GameFi thesis for Substack at some point, with some ideas on enjoyable ideas that can catch traction and a more sophisticated model for these protocols. Until then, we have to wait and see who wins this crowded race.
Crypto Infrastructure is probably a very underlooked sector, this article from Zee Prime Capital providing an excellent introduction for anyone as clueless on the topic as I was.
As you probably know, I’m a big fan of on-chain derivatives. There have been a ton of new protocols popping up, all attempting to grab the biggest piece of the derivative pie. Verdict is still out on who takes all, and I’m afraid the eventual behemoth of on-chain derivatives is still not in the room with us. If you’re looking to dig into the sector more, be prepared to lose your mind at the number of protocols and level of analysis you have to take on.
Ethereum Merge will probably be delayed, but it comes as no surprise to anyone who’s experienced at least one rodeo. Many believed this revolutionary upgrade would release in June, yet it has now been confirmed that it will probably come later in the year. If I had to bet - using options, of course - I would say that the Merge comes Q1 2023, but I’m just speculating here.
The Rooftop Collective continues to long and short the coins on LTFs. I wish them the best and I hope we don’t run into each other anytime soon. Don’t fade the rooftop.
Digging deep and digging in
Without further ado, it’s time to look into everything that’s been going down in the crypto space over the past few weeks. I’m probably missing some important things, so feel free to message me or leave a comment if you want to hear my thoughts on anything else.
Solana DeFi Cambrian Explosion
Solana catches a lot of heat for network outages, choppy price action and the ridiculous FDVs of many alts within its ecosystem. Recently, I’ve noticed a slew of protocols that are working really hard on legitimizing the Solana DeFi space. I’ll name a few: Drift, Zeta, Jupiter, Katana, MarginFi, Fluidity, Xenon, Vovo, Atrix and Friktion. As I’m writing this, I realize I’m probably still missing a handful. All of these together create a more cohesive, useful and innovative DeFi ecosystem for Solana. Whether it be perps, automated investment strats, structured products or lending/borrowing, I think all of these offer something valuable. Since digging into these protocols, I’ve come to the conclusion that DeFi’s top 3 chains stand at: Ethereum, Solana and Avalanche. If more catch onto these protocols and pile into them in hopes of tokens, I think we could see a bit of a Solana renaissance. Stay diligent.
Beanstalk Protocol was unfortunately hacked last week, resulting in losses of over $180 million if the numbers I’ve seen are accurate. As far as the perpetrator goes, they supposedly made off with $80 million - quite the bounty. Hacks are always tough to talk about, and hopefully the protocol and those affected can rebound from this in some kind of way. I stand with the beans.
I decided to throw in this last section to help classify some of the projects that didn’t really fit into a particular section. I’ve been looking at protocols like UXD, Gearbox, Axelar, Yeti, Psyoptions and Mars as well, and still have some work to do regarding their ins and outs. Overall, I’m bullish crypto. The market looks weird, the Nasdaq continues to get slaughtered, inflation continues its rampage and NFTs keep going up and to the right - you’d have to be a crazy person to obsess over this and try to guess which way it’ll go.
Regarding a potential “Ichi Szn,” I think that there are other narratives that take precedence. Ichi blew up and nobody wants to touch that. Yeah, we could fork it on any L2 and the teams could make some quick bucks, but I don’t see a future in this at the moment.
As far as learning more about crypto infrastructure goes, you can’t go wrong with this recent write-up from @ZeePrimeCap. As blockchains continue to grow, infrastructure becomes even more important. While infra tokens might not increase in value as much as we want them to (assuming web2 dynamics play out) I think they can be a safe bet. The worst that can happen is you learn more about infrastructure and don’t make money, so there’s really nothing to lose doing a little reading.
Aura Finance is another cool protocol that had a brief moment in the sun, pumping the price of DeFi oldie (but goodie) BAL. Aura hopes to deliver a protocol built on top of Balancer that can provide additional incentives to Balancer LPs and BAL stakers. Good old ponzinomics. As far as I know, there’s been no announcement of a release but I’m keeping my eyes peeled for when this launches. This probably could have gone in the DeFi “Blue Chips” section, but it’s still pretty speculative and is more of a new development. Oh, and I don’t even want to talk about Moonbirds, so we’ll just leave it at that. Congrats to all the holders, unfortunately for me, I am not one of them. Up and to the right, I guess.
Protocols like Synapse and Layerzero are the two most well known in the field of cross-chain communication, with each having their own unique value propositions. Personally, I’m a huge Synapse fan and use it more than a few times a week. In the past few months I have seen bridging talk pick up a lot, with the addition of new protocols and dApps built on top of LayerZero.
Some of these include Interswap, describing itself as a “fully composable native asset cross-chain AMM” built on top of Layerzero. Stargate Finance is another dApp built on Layerzero, as we’re probably all familiar by now with the STG token and its price action since inception. Nomad is another promising newcomer that’s utilizing optimistic solutions for cheaper cross-chain communications. With all the talk of L2s and scaling, I think a similar dynamic will play out with bridges in the near to mid future.
As far as SYN goes, the token has been holding up well. Synapse has been shipping like crazy and I’m consistently impressed by the team. With over $9 billion in volume done since its release, Synapse is (in my eyes) the current leader in this fun niche of crypto. When I think about these protocols’ tokens, I do have a voice in the back of my head that keeps telling me a “bridging szn” might occur, although I have no reason to believe it will come before L2 szn. Like I said earlier, with the implementation of scaling solutions to cross-chain communication, it would only make sense for a similar narrative to play out; we just need to give it a little time and let the devs work.
Near and Aurora
If you’ve followed some of my tweets over the past month, you’re probably aware of my disdain for NEAR’s price action. Despite a huge ecosystem fund of around $800 million, the rumors of an algo-stable (USN) and the fact that NEAR appears undervalued to competitors like AVAX, LUNA and SOL, this coin has not performed as many would have liked it to. So it goes.
Bridging to Near and its EVM-compatible counterpart Aurora is extremely easy, thanks to Rainbow Bridge and its next-level UX. Just try it for yourself if you don’t believe me. Not only is this a very easy solution to bridging funds, but the native gas token on Aurora is ETH, which is incredibly helpful for those more acquainted and funded on Ethereum. Bastion Protocol has been making quite some noise since its lockdrop, accumulating over $580 million in TVL. This is huge. In their own words, Bastion is an “algorithmic, DeFi lending protocol” that wishes to become the liquidity hub of Near. As far as the Aurora ecosystem goes, Bastion is the clear-cut winner in my book. I’m sure that more protocols will begin to pop up (hopefully a derivatives platform) but for the time being it’ll be tough to compete with Bastion and its native token, BSTN.
Looking at the Near ecosystem, there are a handful of projects that stand out to me, mainly because of the general scarcity currently occupying the chain. Here are a few quality projects (note that I’m not saying tokens, as alts are messy and low-caps can blow up easily): Trisolaris, Ref Finance, Flux Protocol, Spin and Paras. As far as utility goes, Near could also use a more built-out suite of products, but isn’t that what Aurora is for? I expect NEAR to make quite the run throughout Q3 2022, assuming markets don’t tank. While I’m not currently positioned, I’d happily re-enter longs once it’s clear NEAR has broken out of its toxic and diabolical price action.
Rekt “Blue Chips”
If you know me, you know I love DeFi. There’s simply no other sector in crypto that can compare to the level of innovation and entertainment that DeFi brings to me on a daily basis. The tricky part that comes with loving DeFi is that the tokens don’t really perform as you’d like them to. DeFi has been in a bear market since its inception, basically. Sure, individual tokens can pump in isolation, whether it be CRV, SUSHI, OHM or whatever other flavor of the month token is hot, but when it comes to the sector, you’re better off putting your money elsewhere.
But hear me out.
I’ve discussed the possibility of a DeFi revival in my last two articles, citing tweets from @divdotvc as a form of hopium in an effort to try and revive my dead bags. The truth is that this won’t come for a while, but when it will, the pump will hit hard.
Think about it.
If you’re a big name institution managing big money, where will you look at in crypto to park some of these funds? Will it be GameFi or Metaverse coins? Probably not. Could it be “blue chips” like Yearn, Aave or Curve? This is more likely. I could probably talk about this ad nauseum, but the truth is that we’re a long way from this point. Until then, new DeFi protocols’ tokens will always reign supreme as we continue to iterate our way to the inevitable “DeFi 6.942 Szn” and cash out 12 fig positions in the umpteenth Olympus fork.
If you’re looking to capitalize on some of these oversold tokens, I’d look closely at developments on Tribe Turbo, Alchemix V2 and the new range-bound stability mechanism from OlympusDAO. There’s a very strong chance none of these coins bounce and break through abysmal downtrends, but if there’s one thing the crypto community is good at, it’s certainly getting high on hopium. So get out there and find the next Apple or Microsoft on-chain before Blackrock beats you to it.
P2E and M2E
While I don’t hold any positions in either of these categories, I’d be lying if I said there isn’t opportunity in them. We all saw the meteoric rise of GMT (Stepn), with the token capping out at a high of around $3.6 a few days ago. M2E could be big, especially considering the amount of people around the world who have gotten into fitness over recent years. While I don’t think a tokenized walking application is sustainable, what do I know?
Many call it P2E, but I looked putting the sector together into one description: GameFi. Video games are fun. People of all ages from around the world play video games everyday, representing a wide variety of genres, systems and communities. Who’s to say we can’t implement ponzinomics into games? It’s my belief that before we see the first successful crypto-native GameFi application, we’ll see NFTs and crypto integrated into legacy structures. Unless something really cool and genuinely fun comes out, I’m sticking to my guns here.
To me, one of the more interesting parts of GameFi is the possibility of implementing DeFi tokenomics into games, whether it be some sort of Pokemon close or Runescape on-chain. This could be a really cool way of grabbing two huge communities and throwing them into the world of crypto, in addition to being a fun thought exercise to speculate on. If you’re trying to learn more about GameFi, I can’t recommend @chng_raymond enough.
Do Kwon has been buying BTC like I buy meats and cheese. Translation: he’s been bidding hard. Despite Kwon’s best efforts, BTC price action has remained abysmal. However, the goal of Kwon isn’t to simply pump BTC and ride off into the sunset. Instead, the intent is to further diversify the reserves backing Kwon’s algo-stable, UST. If you don’t know what UST is, I recommend checking out @0xHamz on Twitter to read more about the interesting dynamics between LUNA, UST and Anchor Protocol.
Recently, Kwon announced a proposal to end the war between Terra and Frax, with a goal of coming together to incentivize the 4Pool. If you’re unfamiliar with the Curve Wars, I recommend reading some of other articles on this Substack to gain at least a little more of an understanding. In addition to this collaboration between Frax and Terra, the [Redacted] Cartel has joined the party, creating one giant conglomerate that hopes to end the Curve Wars for all. I think that Do Kwon isn’t one to be messed with, as he has size and follows me on Twitter - I’d like to keep it that way.
Frax Finance is a future DeFi blue chip, if it isn’t already. With the release of FPI (a token that tracks the CPI) and the FPIS token, Frax has been making moves. Sam Kazemian is a giga brain, and I haven’t seen the protocol make any mistakes. With the power of Convex and now Do Kwon, are you really going to bet against Frax?
[Redacted] has also been in the news lately for its coming series of changes with [Redacted] V2. I don’t think I’m able to say too much, but Pirex and Hidden Hand will do great things for the protocol as they move away from their status as “just another OHM fork.”
traders fighting for financial freedom, ct awesomeness
I was pressured by my good friend @brentsketit to include a section on the Rooftop. If you don’t know who the Rooftop is, you’re probably better off skipping this section.
All jokes aside, the Rooftop is one of CT’s more “elite” trading groups, with members such as @salience_xbt, @Sathematical, @Awawat_Trades and @badquant1, among others. While they’re all much better traders than I am, maybe this can help me become accepted. Until then, I’m shouting at them from below with a megaphone.
The Rooftop has been known to hate frontrunners. The Rooftop also despise NEAR’s price action, making us immediate allies. The wise wolf @HsakaTrades even stated that he will no longer be taking this collective as some ragtag band of magic internet money traders - you don’t mess with the boys on the roof.
I still don’t really know what they do.
Oh man, where do I even start with on-chain options? We all know how much retail investors love these leveraged financial products, and I can’t wait for the day we can mess around with them on-chain with the absolutely full capability to lose all our funds (and more). Protocols like Dopex, Opyn, Zeta and Opium are some of the standouts, but as I said in the TLDR (if you did read it, I know I said to skip it), I still think the sector is ripe for disruption. Many know that DeFi’s TVL stands at around $200 billion give-or-take, but the TVL of on-chain derivatives protocols is a mere 0.5% of that. Contrasted to TradFi derivatives, the numbers are just out of this world.
The natural progression for any market is to evolve into a behemoth of rampant institutional speculation, and I think crypto is well on its way to that. Structured products are a good start, but if we wanna bring in the big dogs, we need liquid option markets with optimal pricing.
But I guess option vaults are cool enough right now.
NFTs + DeFi
Don’t even get me started about the potential for protocols like Sudoswap and JPEG’d. Despite the harsh reality that most people hate NFTs, you can’t deny the possibility of a future where NFTs become as ubiquitous as something like paying for coffee online. Sure, the apes are ugly. Sure, the punks are old. Who cares about those projects anyways? It’s probably impossible to keep track of every new NFT project that gets released, considering just how many blatant cash grabs, rug pulls and shitty 10k generative PFP collections release everyday. Does Fiverr have a stock? You should probably long thaty instead of listening to anything I’ve mentioned so far.
The combination of DeFi and NFTs has been picking up steam, with the release of JPEG bonds facilitated through Olympus and Sudoswap’s pending launch (plz soon). I think that NFTs put a bad taste in the mouths of many, but I think they’re cool. Would you rather lose money on a token with no utility or lose money on a cool picture? I know what I’d choose nine times out of ten.
Just as DeFi will integrate with GameFi, the same will occur with NFTs. In addition to the intersection between NFTs and DeFi, there are a ton of novel projects like Flip Metrics, LooksRare and Gem who are consistently delivering exactly what the space needs. What am I asking now? I’m glad you asked.
We all love perps. On-chain options are still a year or two away from full efficiency and optimization, so perps are where crypto degens can really let loose and lose money. Whether you’re on 5x leverage or 50x, there’s nothing like betting on some perpetual swaps with your entire net worth. As far as non-centralized perp platforms go, here are a few of the standouts: GMX, dYdX, Drift and Rage Trade. Yeah, I’m probably missing a gazillion, but don’t blame me. There are too many protocols creating perps, and I’d rather stick to what I know. Some of the more recent developments include GMX’s plans for X4, Drift’s continued dominance on Solana and dYdX’s plans to go 100% decentralized (whatever that means). I also like Rage Trade because it’s underlooked, so no promises there. Most of what I research fades into oblivion, it’s better I try and give protocols some attention than keeping them to myself.
If you don’t know what a Milady is by now, you’ve been living under a rock. This has been one of the more “outrageous” NFT projects in some individuals’ eyes, thanks in part to the unique art style of these Miladys. FloorDAO, “a decentralized NFT market-making protocol” recently staged a competition of sorts for users to vote on which NFT project the DAO would bid on next. Naturally, Miladys won. Network spirituality 1, Tubbycats 0.
After briefly skyrocketing to a 2 ETH floor, Miladys came back down to earth, for better or worse. Personally, I wouldn’t sell my Milady for less than 50 ETH. Not only do I enjoy the art, but the Milady community is one of the most unique and engaging niches of Crypto Twitter. If you don’t get it now, you probably never will. As far as Urbit goes, I still have to set it up but I’m looking forward to falling down the rabbit hole.
I’ve written about L2s in the past, and while not much has changed, we have been blessed with the amazing news of a “next chapter” for Optimism. I’m sure we can all assume what this means. I didn’t expect this to happen so soon, despite the fact that it’s been close to a year now since the L2 airdrop rumors first began popping up on my TL. Faced with an almost imminent token from one of the more prominent L2s, we’re left with an urgent question: who’s releasing their token next?
Just as we saw Sushiswap v. Uniswap create a very interesting vampire attack dynamic back in the summer of 2020, it is on mine and everyone else’s mind that the same will play out. Imagine a scenario where Optimism releases a token, the eco pumps, people make a lot of money, TVLs increase and devs are happy. Why wouldn’t additional L2s make the jump and capitalize on this? By releasing a token and grabbing away other L2s’ users, this would create a vampire war - something I look forward to very much.
If I had to guess, I’d say that Arbitrum will follow, with zkSync and Starkware close behind. However, I’m biased when I say that Arbitrum will follow in Optimism’s footsteps as I’d probably receive a much bigger airdrop from them than I will Optimism. For more reading on a possible “L2 Szn,” go check out this thread from the wise @Crypto_McKenna. L2s can be a tricky topic, so if you’re unaware of the tech & ecosystems surrounding them, I also recommend checking out @epolynya’s Twitter for additional info.
As far as on-chain derivatives go, structured products are currently king. The combination of AMMs, Liquidity Pools and absurd levels of composability left the door wide open for structured products to come into crypto, and it’s only been getting better. As far as protocols go, here are some standouts: Pendle, Primitive, Ribbon and Element.
Whether it be option vaults, principal-protected notes, yield-enhancement products or something even cooler like leveraged longs or shorts on interest rates, there is something there for everyone. I’d like to see more money pile into structured products, as these are generally more sustainable than traditional LPs and, while volatile, can provide consistent yield under the right conditions.
Money legos on money legos on money legos. Let’s keep it up.
If this has taught you anything, I hope it’s been a wake-up call to get out there and read more. The market will continue to be the market - it won’t go anywhere. If you want to take a break from the overall chop and crab, get out there and start making Twitter lists of high quality accounts to help better inform yourself. The goal in crypto is to never get left behind with old, rotten bags. If you don’t remain diligent and work towards constant improvement, you’ll get left behind.
With my first semester of college wrapping up, I’ll be able to devote more time to consistently posting on Substack. As of right now, I’m keeping everything free. I’d consider adding a subscription for something like two paid articles a month, which I might try out in June. If you have any comments or complaints about that, just message me on Twitter. As far as free articles go, I’ll keep posting these until I stop breathing - I love writing too much and wouldn’t want to block anyone out with a paywall. Thank you again for helping me reach 5,000 subscribers, it means a ton. I wouldn’t be anywhere without all of you.
Don’t worry, I’m still planning on writing a Frax Finance deep dive, so stay tuned for that!
If you enjoyed this and wish to donate to the Knower Ramen and Cold Brew Fund, here’s my Ethereum address: 0x7Db280BA0fd96619D55Cd18270435A41e25948a4. If you want to stay updated on my day-to-day life and learn more about market happenings, give me a follow on Twitter @knowerofmarkets. As always, remember to share this with a friend of a friend of a friend and have them share it with their friends too, peace!