Notes On Fantom Unchained ep. 41
It’s Thursday again and that means the Fantom Unchained is here.
Nick Drakon is part of the crew now. And he is dropping some knowledge today.
As usual I made some notes and here is what I got. 👇
Disclaimer: I made these notes for myself and I decided to share them. I make them because it helps me to really focus on what's being said. I noted what I found interesting. Not everything might be here. Nothing here is a financial advice.
$BTC drops to $20k
- Markets are forward looking. Markets started to move in anticipation of increased rates at the end of last year.
- Increased rates is bad for the economy = credit card payments, mortgages cost more etc.
- Market just went up because it's looking 3-6 months in the future. - Judging by the futures of bonds, market expects Feds Fund rate to be around 3.2%.
- Market went up = all the bads news has been released, market expects that inflation will start to roll off and rates will stop.
- Feds strategy is to raise interest rates and produce demand destruction in that way.
- There is a problem though.
- Look at each component of inflation separately.
- Are interest rates affecting the demand for each of those things?
- Food. It's very inelastic, you need to eat. What's affecting the price of food?
- War in Ukraine, high oil prices, supply chain issues.
- Interest rates are not causing the inflation for food.
- Energy. $115/barrel. Main reason - refining capacity issue.
- Oil goes to refinery, they break it down into various products, then ship it.
- Refineries typically run at 80-90% capacity. Yesterday they ran at 94%.
- 3:2:1 crack spread. When you buy a barrel of oil you break it up into 2 parts gasoline, 1 part diesel.
- The spread is the profit margin the refiner makes on every barrel of oil.
- Historically a refiner will make $10-20 per barrel of oil. It's $55 yesterday.
- Refineries make 4x normal profit, run at 94% (not safe), can't build more refineries.
- Releasing strategic reserves = useless.
- If you can't achieve demand destruction through rate rises, inflation will stay high for an extended period of time.
- You can't stop raising rates until inflation is under control. Traditionally you want rates at par or higher than inflation rate.
- Pros understand that Fed is NOT going to stop rising rates in September / October.
- Oil companies made $6-8bn in profit this quarter. Taking advantage.
- In 2020 many companies and people should have gone bankrupt. But the risk doesn't leave the system. This time they will go bankrupt.
Consensus 2022 thoughts
- Presentation by Michael Kong was interesting. Snap sync is done and in production.
- PebbleDB, Auto pruning, stare dag, asynchronous sharding.
- $AVAX presentation - moved a significant amount of traffics to subnets.
3AC facing potential insolvency
- Couple of guys based in Singapore, multi-billion portfolio.
- How much damage $LUNA did that we don't know about?
- Even funds and VCs aren't safe.
- When you run a hedge fund - you run a long/short book, with strict risk parameters. Now and then you see a hedge fund go bankrupt because you have a cowboy.
- Pro hedge funds don't take large directional bets.
- Crypto market is $1 trillion, a few investors control the majority of it. They all know each other.
- A16Z is going to be the winner. We as an industry shot ourselves in the foot.
- Bebis is going to end up with all the money in 10 years.
- It's a great time for opportunities if you put in the work. E.g. Byte Masons raised $11 mil in February. Still has $8-9 mil on the balance sheet. Market cap is 6 mil?
- Crypto industry has switched to Work2Earn.
Strategies for maintaining sanity in down markets
- Austin is buying into teams not just tokens.
- Justin says in 5-10 years it will be clear that crypto is it, the tech is good. It just takes time to build it.
- There are only two ways to make money: 1) long time horizon, you buy and hold; 2) Risk managers - active investing, what professional traders do. If you try doing something in between you will go broke.
- Learn how to manage risk properly.
Celsius halts withdrawals
- If you see smoke there is probably fire. It's better that you're safe than sorry.
- How do you survive bear market? Stop losing money! Either get out of your position or go short.
- They basically gambled with users' money and lost it.
The Game of Tomb, Lif3 launches, Tomb gets ratio'd
- Austing makes up voices in his head when he's reading announcements.
- The plan is to use Tomb as a utility token for other stuff, it seems.
- I'm personally not interested in $TOMB so I got distracted in this part.
Granary on Fantom, Avalanche, OP, Harmony. What's the key to success?
- Not in a rush to release a token.
- More competitive because of reserve factory.
- Credit union with locations on every chain with a focus on users.
- Granary takes a smaller cut and can offer higher deposit APR.
- Granary is a part of Byte Masons. Sort of.
Magic Cats staking is now live
???
cLQDR #1 holder of xLQDR in 3 months
- One of the tokens that Austin holds.
- Interesting piece of tech, Nick loves the fNFT and the cLQDR.
I highly recommend watching the full episode.