---
# System prepended metadata

title: 'Tokenomic Traffic and Weather with Goblinbzns, May 11, 2022'
tags: [Alchemists]

---

---
tags: Alchemists
--- 

# Tokenomic Traffic and Weather with Goblinbzns, May 11, 2022

Down 98% in the last 7 days.
- terra is a cosmos blockchain and offered a 20% yield from people buying in, but if people are selling it's a death spiral
- stablecoins are a huge deal and not all are made equal
- few stablecoins in the ecosystem
    - Dune - gets high quality data on chain
    - popular, allow relatively stable value and transfer

How are stablecoins structured?
- 3 stablecoins worth 
- Custodial and Non-Custodial
- USDT (tether, offshore) power over the erc20 contract
    - Custodial
    - have dollars and things like dollars to back
    - 35% of stables on ethereum are tether
    - fraud - don't really have enough dollars to back
    - can blocklist addresses, like hackers
        - ether can't do that
- USDC 
    - backed by Circle (Powerful!), consortion (US based) including Coinbase 
    - fungible 
    - not audit, but austitations show enough decent cash and real collectable debt back (collatorized)
    - Circle can censor addresses and smart contracts
        - could kill Maker by blacklisting DAI
- DAI
    - bring collatoral to borrow against
        - like eth for dai
    - if the price of eth drops then theres an imbalance
        - you get liquidated and your dai is brought out of the system
    - can only produce enough dai as much as people who are willing to borrow and risk being liquidated
    - more demand than supply
        - Maker solved by accepting stablecoins
    - Peg Stability Model - smart contract
    - interest rates are trivial in the vaults
        - cost to borrow is almost irrelevant
    - ratio subjective to liquidation
        - oracles - smart contract checking the price
        - if your eth in the vault is worth less than what it was when you borrowed then you eth goes up for auction on discount
- UST
    - Terra coin collapsed
    - produced by staking Luna
- USDT
    - in the process of collapsing
- UST was a new blockchain spin up by a grifter
    - algorithmic stablecoin
    - ponzi scheme
    - "bank run"

- If you hold crypto assests, the fuction of the economic system interplays.
- certain protocols are at existential risk if USDT is less than a dollar
- the value of Ethereum is driven by trust and ability to engage in ecosystem
- where do the protocols interect?
    - if UST should be avoided, than anything that touches UST should also be avoided
- High Market Cap
    - if a protocol is on top of ethereum than it's gonna be related 
- historical cycles of eth
    - where do we bottom out to?
- eth merge is very close
    - good econimic structuring
    - regulatory risk
- what if Coinbase gets shut down?
- notible events get regulator attention
- Run on Tether - attracts regulators
- Eth is ~250B
    - adding all the other protocols adds another ~200B

### How can we plan, individually and as a DAO?

The general impact on us, our funds in CCO3 is in Eth, so our runway is directly connected to the dollar value of eth.

How do we want to structure our treasury to protect with this volatility?

Resources in stables that we trust as LPs, to make some hedging with hopefuly some upside.

If the market is going down:
- create a model
    - what happens to the value over time?
- holding resources in DAI/USDC LP and DAI/xDAI LP and the rest in Eth
    - flat market, vs eth going up or down
- not trying to predict
- instead trying to prepare for anything

Coordinate burn lowering
- contributors all agree to lower burn

What's the mechanism destroying USDT?
- in the wake of UST collapsing, there's been a flight from USDT to USDC and DAI
- general flight to safety happening - scared of Tether

UST crashing, largely left Curve unscathed?
- UST and USDT aren't directly related
- Curve has three pools
- UST created four pool
    - doesn't explicity effect three pools

**Information asymentry**
- insiders know info that's materially relevant
- education and understanding of how crypto and markets work 
- example: bitcoin sv - been restructured multiple times by attackers, but is still a billion dollar market cap
- malicious insiders out to steel
- acting in good faith but don't have understanding

*There's so much information asymetry and there's lots of conversation just out there to learn.*

*Being curious and reading can make information asymentry work in your favor.*

## Recomendations

1. get a strong understanding of the principles of how this works
    - Bankless
    - Finematics
    - economics basics 
2. how to assess something specific
    - sources analysis
    - Maker DAO forum risk analysis
    - 1000% apy - don't touch it, probably ponzi
    - Karpatkey reports - Hedgefund treasury management
    - Cryptoskeptics
    - don't always read the feel good cyrpto is gonna eat the world

### [Tokenomic Traffic and Weather](https://discord.com/channels/709210493549674598/740299170589704364/974044628049362985)

AMM patterns:
Uniswap v3
Uniswap v2
Balancer v2
Curve
https://dune.com/hagaetc/dex-metrics

Sources // News (roughly in order of quality):
Week in Ethereum newsletter
Bankless weekly rollup (podcast)
Gnosis Chain weekly newsletter
Paradigm biweekly dao report
Discord 
crypto twitter "CT" (cobie, dystopiabreaker, degenspartan, timbeiko, superphiz, &c.)
reddit

Sources // Data:
Dune.com dashboards
David Mihal dashboards (https://cryptofees.info/)
Defi Llama

Sources // Analysis:
MakerDAO forums (collateral / risk reports)
cryptoskeptics (crypto critics corner, web3 is going great, rekt)
Karpatkey reports
Finematics

Existential risks in crypto today:
unbacked USDT (Tether) 
centralized stablecoins as regulatory attack / capture vector (USDC)
centralized exchanges & banking on/off ramps as regulatory attack / capture vector
PoW as failure in survivability onion

## Spontaneous Q&A in Discord, May 16, 2022

Could you say that staking HAUS in this pool gives the token another value aspect besides exchanging it for eth or whatever and this encourages holding it?

*Broadly, yes*

Potentially, can any token be used as collateral and staking?

*Collateral is maybe not the most accurate word here, but generally, yes. Any liquidity pool on Balancer can become eligible for a veBAL gauge and therefore liquidity providers (LPs) can receive BAL rewards for staking their LP tokens to the gauge (assuming veBAL holders vote to send emissions to that pool / gauge)*

*If there isn't a gauge already for a pool, it needs to pass a Balancer governance vote to create one.*

So I'm relating to owning real estate, where unless you're flipping the value is in the the potential credit???

*The thing is that lending protocols only allow certain tokens to be used as collateral, and they allow different % of borrowing depending on the quality of the asset*

*Most lending protocols will let you borrow against ETH, WBTC, DAI, USDC, etc. Some protocols let you borrow against riskier assets, but also those lending platforms are riskier (e.g., CREAM)*

*At present, there are no protocols that accept HAUS as collateral*

*This was something I was thinking about trying to pursue (getting HAUs as collateral on something like Agave, Kashi or Rari) but the past six months has taught us that lending protocols carry a LOT of smart contract risk, so I've shelved the idea for now*

like security risk or market volatility risk?

*both, actually
Right now, the value proposition of holding HAUS is*
1) you can exchange it for ETH
2) price may go up (it may go down)
3) you get gov rights in Uberhaus (soon ™️ )
4) you believe in DAOhaus and want to support
5) at some big number, you get a backstage pass to war camp channels (citadel role)
6) you can LP it on Swapr or Balancer to get the liquidity mining rewards
*We need more / more compelling value props tho, and that's a major priority for Alchemists*
