ChainHedge

2023-01-21 02:01:18 https://datafinnovation.medium.com/further-binance-peg-token-problems-8db6a2cc20c3

Before I also was thinking that Binance can actually print any amount of not backed BSC tokens. Basically for free farming, 0 collateral leverage or just to push fake TVL of their chain. Based on my personal experience in previous projects BSC was one of the most dead chains by real user activity. Left BSC (as user) totally after first problems with Binance bridge usage.(much time ago) Open / Comment

2023-01-15 13:43:32 *** Way too complex = way too fragile ***

* Complexity of particular farming\trading strategy (advanced combination with mix of platforms etc.) decrease system robustness significantly.

Usually we can't even guess what may go wrong. Even if we can assume vectors of attack, we can't count probabilities accurately. When I see some kind of 3-4 steps strategies, I assume it is the fastest way to fuck up in the long run. Most of people have no competences to even measure the risk for particular strategy. During the time when "too much money in the market" these strategies will lead to *risk adjusted* negative APY, even it shows as double digits juicy one. You have to study really well how things work and even go deeper in code if it is about automatized strategy which is not trivial task for anyone.

* Same way additional optimization of funds allocation will lead to decreased robustness of whole system.

The "smartest" people in the room are not who made the most return for bull market, but who survived after. All the over-leveraged\highly optimized yield fools are out of the game eventually.

* The most reliable "stress test" for immutable smart-contracts is time.

Then longer something works than higher chances it will keep working. Decent audit(s) is a must, but everyone can make mistakes, it is just human factor. The real money on the table make it stress tested much better than any audit.

For now:
Complexity of the most systems increased significantly. Even Maker began its degen game with Real World Assets(RWA) which *may* eventually lead to total disaster and failing of DAI system as well as every liquidity pool which includes it. For me it looks worse than USDT since Maker will not be able to handle compliance requirements. So even Curve 3pool is risky for me right now without providing any reasonable compensation for such risk.

I don't assume we have to avoid uncertainty and avoid taking high risk, but at least it should be properly compensated. When during last bull run we went to farm something new, we did it at least for triple digits APY with relatively measured time limited risk. Open / Comment

2022-08-28 11:51:34 https://glebhedge.substack.com/p/fragile-stablecoins?sd=pf Open / Comment

2022-07-11 11:46:01 To get the advantage of the future bull cycle except searching for new innovative projects which will pop up during the crypto winter, we also have to track significant pivot shift for old ones that still have funds for development.

Most likely old models of hyper inflation, *useless* governance tokens etc. will stay in the past with the last hype since their TVL was supported only with stimulation and now when token price go down usability goes down as well. Right now it is hard to find any projects with sustainable fundamental metrics(except ETH, BTC, some others) which leads us to conclusion that old economic models don't work and have to be significantly adjusted to resurrect.

Good example for previous cycle(2018) was dead ETHLend which turned into AAVE. Even AAVE still didn't create any serious value catch economics for it's token, hype growth driven by service popularity rise helped them to survive previous depression cycle otherwise nobody would remember them as other 95-98% projects, including endless list of of cheap Ethereum killers. Open / Comment

2022-05-15 21:35:34 https://twitter.com/glebhedge/status/1525906928626348032?s=20&t=0iaSsKFzebNL0mpM3xnC0g Open / Comment

2022-01-20 11:14:44 Interesting article about particular VCs effect on crypto. It is not a secret that access to liquidity is important to perform exit, especially for significant VC's bags. Big exchanges such as Coinbase can get access to retail money.

Personally, I really don't like VC ownership approach for crypto projects since it reduces the engagement of a community into developing processes or building services on top. There are exceptions where a state of ownership of a token doesn't really matter since a project is built by a particular team and overall is considered only as a utility for end-users(like Binance or Maker).

Based on my previous experience all L1 solutions which were backed mostly by VC eventually failed, so I am kinda biased in this term. But 2021 showed that people are still ready to buy VCs unlocks and push prices high, so purchase at the early stages of such projects could be reasonable for short-term\middle-term and they even can outperform ETH.

https://startupsandecon.substack.com/p/you-dont-own-web3-a-coinbase-curse Open / Comment

2022-01-19 09:43:09 Some thoughts on the current market situation.

https://telegra.ph/Market-note-012022-01-19 Open / Comment

2021-12-02 11:14:09 These days we can see many projects are launching on Ethereum L2 solutions or just side networks. Indeed that current ETH network fees are way too hard to handle for newcomers, so underfunded users have no choice but to use such solutions. But the tendency is pretty much obvious, that if the Dapp layer protocol can't perform well on the L1 Ethereum network dealing with users who can pay high fees, it most likely will fail on cheaper networks.

Also, the quality of projects which focus on L2 is usually very poor or has a clear intention to scam people since underfunded users usually have fewer competencies and less demand on security. If you launch a decent project it is obvious that you will focus on L1 first and make it accessible for the most available liquid market and cross-contract interactions. Only when it will be successful on L1, you would migrate it to other networks. The opposite strategy is usually a good indication of just trying to find a way to survive with a low-quality product. L1 protocols forks from another side use working models which already proved their efficiency. But we have to keep in mind that new "developers" didn't put significant effort to launch it, so by default they are much less valuable and a much higher risk of scam.

I assume that there could be exceptions in applications less related to financial use-cases which need a high amount of low-cost transactions, but the scalability problem is not solved yet. Lack of users on side networks can't be an indicator of good network performance as well. Open / Comment

2021-11-14 09:33:28 https://medium.com/@glebhedge/borrowing-protocol-management-8ba3773ad5a Open / Comment