1/ Something major is happening in crypto that is being overlooked by traditional finance 🧐
One of the most consequential currencies, Ether (ETH), is about to become a yielding instrument with annual returns of up to 20%💰😳🎉
Thread 👇
1/ Today is my last day at Ether Capital!
I joined 4 years ago and my timing couldn’t have been better...
I fell head first into a bear market with ETH going from $1,400 to $80
Here are 3 things I’ve learned since then:🧵👇
Excited to announce our seed funding!
Grateful for this hugely supportive group of investors & angels
@jelenaaa____
is a rock star founder and
@johnletey
is a rock star engineer… and we’re just getting started!
Over $7.5m on Noble rn - CCTP & dYdX v4 migration will be 🔥
6/ With staking, however, you can turn your cryptocurrency into a productive asset that generates a yield. You can make cash off your holdings.
You’re now holding farmland 🌽 not gold 🏅
5/ Warren Buffett famously said he’d prefer all the farmland in the US instead of all the gold in the world. Why?
Farmland is a productive asset on which you can earn cash flow. Cash is king. Understandably, Buffett doesn’t value bitcoin either
Bought a happy meal for my daughter the other day
Paid for with USDC on
@noble_xyz
Thanks to
@CypherwalletIO
Your Noble address becomes a way to spend USD wherever Mastercard is accepted
Pretty incredible!!
Chatting with
@RyanSAdams
tomorrow!
We'll talk Ethereum and the case for ETH in the public markets 🔥🔥🔥
Ryan is a tireless Ethereum advocate and
@BanklessHQ
is beyond impressive 👏
Can't wait for the conversation!!
@BarrySilbert
"Who is going to be the MicroStrategy of Ethereum?"
There's already one!
It's
@ethcap
Public company holding ETH, already staking, getting ready to raise another $125m...and guess what they're buying?
We're recording w/ them on
@BanklessHQ
tomorrow.
2/ If bitcoin is digital gold and ETH is digital oil, then staked ETH is a digital bond.
And importantly, unlike a conventional bond, Staked ETH has no counterparty risk.
There is only protocol risk
10/ When bitcoin went live, few could have imagined the price would be a mainstay in CNBC’s ticker tape. Yet, here we are.
Similarly, maybe we’re not that far away from CNBC comparing staking yields to yields in treasuries, bonds and dividend stocks?
1/ I honestly don't get why investors buy negative yield bonds. Why not just keep the cash instead? 4 plausible explanations below but I still think I'm missing something. Would appreciate someone explaining this...
9/ In the case of just ETH, supply issuance over the next four years is *less* than gold or bitcoin.
This could be bullish for ETH price under constant demand conditions
8/ As staking becomes more prevalent, yields could drop to 2-3%. Not exactly 🤑, but better than the negative yield on your bank account.
And if yields are low, lots of Ether will be locked up in staking; we might expect a higher market price of Ether and capital appreciation
4/ This is a lot for traditional finance to process. They’re just getting used to bitcoin. But you can’t stake your bitcoin. You can only hold (ahem, hodl) them.
Bitcoin is like gold – it’s not a productive asset
11/ Ethereum’s digital bond promises to be a crucial milestone for crypto as an asset class.
In my view, traditional finance should be taking a much more serious look as this new digital paradigm for a yield instrument takes root
3/ In crypto, miners typically validate transactions and get a token as a reward. This is bitcoin’s model.
In staking, miners are replaced by stakers who put up ETH as capital, validate transactions and thus earn a token reward on that capital. This is *yield* on capital
7/ I’ve done some work on what yield you can expect on Ethereum post-staking (h/t
@Consensys
).
In the early days, when it’s more risky to stake, the yield could get into double digits – as high as 20% per year… pretty good!
9/ With staking as blockchain’s answer to a yield instrument, it’s just a matter of time before staking networks like Ethereum get the attention they deserve from traditional finance
My piece for
@web3canada
Tech can solve the privacy and innovation limits imposed in crypto enforcement
We can have a win-win, but need good faith engagement from regulators and builders
10/ In terms of staking yields, in the early days staking could be very lucrative, while after some time it may be more akin to inflation protection plus a margin
5/ You might say – I can already get yield on my crypto! Of course you can…
BUT you don’t get an intrinsic yield instrument when you lend assets because it entails additional counterparty risk
"What blockchain are the tacobell NFTs on?"
A question I *never* thought I could conceivably ask when I first entered the crypto space...
And yet, here we are🤷♂️😄
Being part of genesis was important to us.
We wanted to support the builders that made Eth2 a reality and be the first to showcase Ether as a productive digital asset🚀
EthCap is staking on Ethereum 2.0!!
🔥🔥🔥
We are thrilled to announce we were part of the genesis validator set (ie. there from the beginning!)
We may be the FIRST public company to stake ETH🤓
More details in our corporate press release👇
5/ 3. Portfolio managers have been forced to up their game, also a good thing
I was once (seriously) asked “why should I buy crypto if you can make it out of thin air?”
Now PMs ask us to send them models on Ethereum’s inflation rate post-merge
Update from Ether Capital... if you take a step back from price volatility, incredible things are happening in the Ethereum and Web 3 ecosystem. The future is bright!
11/ But the best is yet to come!
It has been awesome meeting and working with builders in the
@cosmos
and IBC community so far.
Although I am a newcomer, I have been welcomed with open arms… grateful for what’s ahead!
🙏🙏🙏
6/ For example, tokenized lending on Ethereum (Compound’s cTokens) creates digital bonds but ones that are NOT intrinsic yield instruments.
Compound’s smart contract is counterparty risk
6/ At EthCap, we kept our conviction around web3 and capitalized on the institutional momentum:
-held ETH through a brutal 🐻
-invested in ecosystem plays MKR & Wyre
-held true to our thesis on ETH as a digital bond
-became the first public company in the world to stake ETH
@tbr90
@AaveAave
@compoundfinance
Correct, and I'd argue the layer 1 part is what makes it a true yield instrument. With Aave/compound, you're taking on more risk and it decouples from the protocol itself. Re price, I'm arguing you don't necessarily need incremental demand; it could simply come from supply side
What will DeFi look like in Ethereum 2.0?
There's one plot of real-estate for DeFi protocols on Ethereum today.
In Eth2 there'll be 64.
@hosseeb
gives us the model to understand how this new world might evolve.
DeFi in Eth2:
Cities, suburbs, farms
The Purpose Ether ETF launches this morning!🦄
Another world first after the Purpose Bitcoin Fund raised over $1 billion in its first month
We are working alongside
@PurposeInvest
on $ETHH just as we did with $BTCC 🚀
$ETHC
9/ Next week, I’ll be moving onto EthCap’s Advisory Board where I’ll continue to support this superstar team
I’ve told Brian I’m happy to bring a jammy California cab to the next meeting 😂
3/ And when I heard about the opportunity, I jumped at the prospect of collaborating with
@zmanian
and
@jackzampolin
- two Cosmos stalwarts I've admired for a while
Strong team? ☑️
12/ Getting a head start on grappling with novel concepts like intrinsic yield - that is, protocol risk without counterparty risk – could yield future dividends!
11/ So what’s next?
For now I’m going to continue to support the space as best I can
As an investor, advisor and overall web3 fanboy
Hit me up if you think I can help!
7/ Last year, we raised capital to buy more ETH for staking and assets grew from $10m to $220m
I’m proud to have been part of the team getting us this far
The next phase of growth at EthCap is building unique IP and operating verticals
3/ 2. Institutional investors now have a lot more options, and that’s a good thing
When I started, there were almost no crypto companies in the stock market
Remember Long Island Blockchain? Lol
1/ We are thrilled to announce we have staked over $50 million of ETH, becoming the only public company in the world to stake such a meaningful balance 💥
Here's why that's a big deal👇
$ETHC
Coinbase bonds are a casualty of crypto winter and the FTX blowup
BUT a compelling opportunity @ ~50 cents on the dollar:
+ Margin of safety
+ Strong balance sheet
+ Blue-chip brand
+ Robust yield to maturity
$COIN
2/ 1. Conviction matters
After becoming obsessed with crypto in 2015, I left my TradFi job to go full time in the space
Prices then dropped 95%😧
People *talk* about having diamond hands - I had staked my identity on *living* it
8/ Okay so moving on, the next questions are: what will happen to the ETH price post-staking and what yields we might expect?
These questions are very difficult to answer! Still, here are some thoughts…
2/ So how did this come to be?
First, the bottom up story:
I’ve known
@jelenaaa____
for years
Most recently we helped form
@CanadaWeb3
when I was President & CFO at
@ethcap
New episode!
Who's the Microstrategy of Ethereum?
Maybe it's Ether Capital.
A publicly traded company w/ a long ETH thesis. The first public company to stake.
They're raising another $125m to buy more ETH.
Institutions are buying ETH. 🔥
Listen:
4/ But there’s also a top-down story:
When I got started in crypto in 2015 as a closeted BTC maxi, monolithic was the way
Things have changed
Platforms are becoming modular, apps want control and flexibility, the multichain world is evolving and we need decent infrastructure
When we were pitching Ethereum/DeFi to skeptical investors in 2019-2020, I should have said "listen, in a year or two it's going to be on the cover of the Economist"🤷♂️
Decentralised finance is one of three tech trends disrupting finance—and it has the potential to rewire how the industry works. In our cover this week, we go down the “DeFi” rabbit hole
Cosmonauts, the day has officially come. ✨
Noble is distributing 500 FRNZ tokens to the
@cosmos
community.
Each FRNZ token will be exclusively redeemable for a physical friendship bracelet, shipped anywhere in the world. 🌐
Read on for how to claim & participate 👇
6/ Finally, the
@noble_xyz
story:
On Ethereum, native asset issuance is trivial
But sovereign chains bring unique issues:
+ Smart contract layer needs security
+ Bridging/routing paths affect asset fungibility and UX
+ Appchains aren’t purpose built for asset issuance
5/ The
@cosmos
stack is literally built for this and is hitting major PMF
It's true - Cosmos invented multichain before the rest of crypto got onboard
For me, it’s also about being at the forefront of the infra layer☑️
We are excited to announce that Noble is bringing native
#USDC
to the
@Cosmos
and boundless Inter-Blockchain Communication (IBC) ecosystem in partnership with
@Circle
! ✨
7/ Also, proof of work mining doesn’t provide an intrinsic yield instrument either. Why?
Unlike with staking, mining rewards are *external* to the protocol
Don't think Ether has the same hard money or digital gold narrative as Bitcoin?
@drakefjustin
breaks it down for us 👇
Ethereum's new monetary policy potentially gives ETH a stronger store of value thesis than Bitcoin🤯
Check out the Ether Capital Podcast on Spotify or Apple!
EthCap is thrilled to announce agreement with
@PurposeInvest
! 💥🚀
It includes the Purpose Bitcoin ETF, which will be the world’s first physically settled Bitcoin ETF
#BTC
Press release with details is 👇
7/
@noble_xyz
aims to solve this
It provides a secure and seamless landing spot for all assets in Cosmos, bringing native liquidity and improved UX to the IBC ecosystem
☑️☑️☑️
I tell people that
@MakerDAO
was the "aha" moment for me in crypto...
Find out why👇
On the Ether Capital Podcast, we discuss stablecoins and the world of Maker and Dai with
@g_dip
and
@brianmosoff
Check it out! (Apple and Spotify)
1/ Alternative theory: people buy negative yield bonds because they have no choice. Opting out of negative interest rates is too costly. They *may* fear the future or expect deflation, but that alone doesn't make them buy these bonds. More👇
In his latest memo,
@HowardMarksBook
discusses the reasons for and implications of negative interest rates, which have become increasingly prevalent in global finance and are nothing short of Mysterious. Read/subscribe:
#OaktreeInsights
I've contributed to
@namadanetwork
#NamadaTrustedSetup
at round
#240
with the contribution hash bcac01d6d581e8918b00c5d4d9e4db71707b9db8d925e35b7888298c143a42e04688f9b1761e2c49a254571eee5add671b2404c85ff19c35df5060bf2d9b6012. Let's enable
#interchain
privacy.
1/ Wow! Canadian regulators seem to be saying that any crypto exchange is trading securities if they hold a client's crypto, even if the crypto in question is a commodity and not a security👇
Hello, world!
We are excited to announce the
@anomanetwork
, a blockchain protocol for private, asset-agnostic bartering among any number of parties.
This article provides a 1st overview of the features of the Anoma protocol, motivations, & the vision:
Gitcoin Grants Round 6 is here.
📆 FINAL DATES: 6/15/2020 - 7/2/2020
🌟 SHINY FEATURES: Bulk Checkout (!), new Grants Explorer
💰 $175K in matching funds, including $25K alongside
@CryptoForBLM
Let's build community, together 🌳
1/ ChainSafe is excited to announce that we’ve raised $18.75m in an oversubscribed Series A.
The additional funding will allow us to continue creating open-source infrastructure and tooling that empowers
#web3
builders.
Unfortunate comment on bitcoin from York University professor Dr. Ambrus Kecskes in today’s
@globeandmail
. I felt the need to respond! cc: author
@DaleJacksonPI
1/12
This week's
@ethcap
newsletter:
"Politics is the art of looking for trouble, finding it whether it exists or not, diagnosing it incorrectly, and applying the wrong remedy." -Ernest Benn
😈Its feels so good to be this bad!😈
My first week as head of BD for
@Noble_xyz
has been incredible as we overtook
@0xPolygon
&
@Trondao
to become a top 5 $USDC issuer with $200M+!🤯
Thanks to all my bad friends across the
@Cosmos
who have helped guide me along this journey.🫡
6/ Theory 3: Investors think the banking system is so fragile right now that they would prefer to take a haircut on guaranteed gov't credit than be exposed to a black swan Lehman-type event where they aren't covered by FDIC insurance
As for what's next, I'm excited to be working on ✨something new✨😂
Going to continue investing, supporting relentless founders, and looking for the next big thing.
More details soon and a lot more writing coming at
TLDR - buy the token, not the miner!
Buying the token = token risk.
Buying the miner = token risk PLUS chip risk/energy risk/ operating risk.
Unless you're a miner who understands AND can outcompete on these risks, mining is a suboptimal way to get exposure IMO🤓
Often find myself in deep🐇holes in mining. 1 I have been stuck on is the ASIC supply chain bottleneck and how those constraints affect the overall network growth. There are 2 things that concern me for overall growth of NA miners: supply chain bottlenecks and capital constraints
Join Ether Capital on Nov. 11th as we dive into why traditional finance should pay attention to crypto. Get insights from some of the brightest minds in the space! RSVP at info
@ethcap
.co
9/ Genuinely curious and looking for insights. I'm avoiding the crypto/defi comparisons for now - let's just embrace the morass of traditional, centralized finance!😁