Complaining about crypto & web3

Turn it off then turn it back on again

Welcome to Goblinburg

None of this is financial advice and I have not been paid by anyone to write the words you are about to read.

It’s been a while since I last wrote something for Substack. I apologize for the hiatus, I guess you could say things have been busy. Without saying too much about it, crypto has gone down since my last article - who woulda thunk it. Markets go up and they go down, but sometimes they just really want to go down because of everything from inflation to the potential for nuclear war. How Bitcoin factors into this, I don’t care to find out. Putting all of that aside, I thought I’d come on here to talk about my recent lack of enjoyment from Crypto Twitter. Markets (particularly alts) have gone down so much in recent months that it feels like everyone has turned into a hostile goblin, obsessive over their portfolios that have drawn down 99% as they argue and bicker about whatever flavor of the day Twitter dot com is talking about. I don’t know about you, but my timeline has been a disaster. It really sucks when tokens go down, but there’s something worse: when the tokens don’t go back up.

Everyone appears to have been beaten down so hard recently that they truly believe in their hearts that crypto will never go up. While there’s a high possibility that we don’t go up like we used to for the next six months (there’s a joke in there) this doesn’t mean crypto / web3 is dead, although maybe we should just keep saying it is to avoid an influx of moon boys and scammers. Even though markets are down, my hopes are up. I think there’s never been a better time to double down and get research done, mainly because a large number who used to be interested in crypto three months ago are not anymore and the competition feels significantly lighter than it did “back then.” Oh, and I haven’t written on Substack since the whole UST / LUNA ordeal, but I guess that’s a story for another day, written by someone who isn’t me! Crypto has been taking hit after hit, scam story after scam. I don’t even want to explore everything bad that’s happened, as there are already entire websites dedicated to documenting the various pitfalls and facepalm moments the industry faces on a daily basis. But are we doomed?

I don’t think so.

It’s tough to be bullish when it feels like the entire world is collapsing around you, but this is just that: a feeling. Inflation is bad, we all know that. Unemployment numbers are bad, we all know that. Equities look bad, we all know that. Quarterly earnings calls have been bad, we all know that. Growth stocks look horrible, we all know that. Arthur Hayes’ price targets are accurate, we all know that - sorry, went off topic. Putting all of this aside, things in our digital casino aren’t too bad. We recently had the OP airdrop which essentially gave most Crypto Twitter regulars a free couple months of rent for basically nothing. There are diamonds in the rough, but recently these diamonds have been few and far between.

Here are some of the more interesting things that have happened since I’ve last written along with some of the things that have caught my eye that haven’t happened:

• USDD / TRX

• USN / NEAR

• LUNA / UST (rip)

• BAL / AURA

• OP / VELO

• MPL / GFI

• XMON / SUDO (soon)

• RBN

• SYN

• OHM

• Miladys / Aura Miladys

• Goblin NFTs (ugh)

• Porter Finance

• Primitive

• Panoptic

• Celestia and Arweave

• Timeless and Pendle

• Axelar, Nomad and LayerZero

As you might be able to see, not a lot has gone on - booooo! As far as on-chain activity goes, everything looks rekt and liquidity looks pretty garbage too. This can be attributed to on-chain warriors losing funds and a general lack of attractive plays for those who aren’t team members with tokens to sell (many of us). Looking at DeFi, TVL got totally ransacked after the Terra debacle, resulting in many promising protocols and even well-established juggernauts losing between 50-75% of their TVL (one of the few things keeping them afloat in the first place). Stable yields got rekt, speculative yields got rekt and DeFi tokens got rekt, but this last part isn’t new. If you’re trying to invest in DeFi with a timeframe less than six months, you’d be better off sending your money to 0x7Db280BA0fd96619D55Cd18270435A41e25948a4.

I have a lot of faith in maybe 25-30 protocols, but the rest just look bad. This isn’t on them, it’s more related to lack of speculative interest and general macro concerns leading to this ghost town we’re seeing. I’ve referred to DeFi as a Wild West in the past, and we’re really leaning into this moniker adopting a ghost town vibe. I don’t see DeFi TVLs reaching ATHs for at least a year, but I’d expect a slow grind upwards as money flows into more established protocols and promising candidates like Ribbon, Maple and Primitive.

By no means is this going to be a fully descriptive report, as I’ve done those before and they can take quite a bit of time. I mainly sat down to write because I wanted to get some of my thoughts sent out into the world before I lost them for good. Crypto Twitter has taken an apocalyptic mindset, and it’s almost impossible to find anyone actively researching the markets like there was just a month and a half ago. Looking at crypto from a broad point-of-view, I find a lot of comparisons to the late 90s tech bubble and eventual burst, which is pretty bullish. I think many underestimate just how much vapor there still is in the market, propped up by LP incentives, sky-high VC valuations and general froth which still needs to bet cleansed before we resume up-only.

After UST / LUNA got blown out, we even saw a handful of funds take a huge hit, with additional funds taking massive hits from the blood in the water across pretty much every alt. As far as majors go, BTC and ETH look okay for how badly most of our other beloved coins have been attacked. Arthur Hayes recently called BTC bottom of $25k, which is probably reasonable looking at previous cycles. I’ve seen some fall into the trap of predicting drawdowns akin to that of 2018, which I don’t necessarily agree with. Crypto has become so much bigger since then and has attracted institutions that have invested quite a lot into both public and private markets. Yes, I believe the emperor(s) have no clothes as far as many valuations go, but this doesn’t mean all of the market is vapor. Looking at past cycles to get a better idea of where we’re at, it feels like 95% of the market was vapor. Currently, maybe 75-80% of the market is re-branded vapor - a huge step in the right direction.

I really think crypto can help solve many of the problems we face in the world, whether it’s financial inequality or something more cryptographically focused (like the tech behind L2 scaling solutions). We’ve seen the beginnings of a cross-chain world and what it might look like, with new protocols like Axelar, Synapse and LayerZero paving the way for a chain agnostic future. As far as volumes go, some of these protocols have done very well and continue to hold up despite lower liquidity and streets filled with slaughtered bulls. We might be in Goblintown, but I don’t think we’ll remain here for too long. I’d like to think BTC could range between $2xk-$33k for the next few months, potentially breaking the bearish trend after macro concerns smooth out and the Fed begins to take a more aggressive stance. The band aid needs ripped off, and if we ever want to 100x on an alt going forward, it’s in all of our best interests to deal with the pain now instead of prolonging it.

It’s been discussed in the past, but this really is a market driven on attention. Do you remember NEAR? Remember SOL summer? Remember FTM szn? Remember the wars we used to fight in DeFi? Once a token goes up, it inevitably has to go down for the rest of time. It’s better to focus on things that are new and could release a token, or the products you believe will survive through the awful conditions we’re facing. Whether this means sleuthing through Twitter and Discord for 10 hours a day or creating excel sheets on blue chip protocols / tokens, the choice is yours if you want to come out of this ready to grind in the casino once more.

As I approach the end of this very brief write-up, I think it’s best to explain that I am still bullish crypto - it just isn’t a pretty market to be engaging with everyday. I don’t think I’ve made a trade in the past month and a half now, instead focusing on honing my knowledge and learning more about the lines we see on the charts. I’ve started cleansing my Twitter feed of trash, and use Twitter lists pretty much everyday. There’s alpha in exploring battered DeFi tokens, infrastructure plays and the cross-chain landscape, but I’ll leave it at that. I plan to write an in-depth article about cross-chain interoperability soon, but it’s a fairly comprehensive topic and has taught me a lot about aspects of crypto that have made me rethink my research process. Instead of rushing a Substack post out, I’ll let network spirituality do the work and bring my words onto the screen in a more refined way. I promise to write more very soon, and I hope you all enjoyed this extremely short post. Go out and do great things in Goblintown.