But, every now and then a new project can be discovered that just has it, that just makes sense immediately, that excites you and fills you with so much passion and clarity that you want to tell everyone about it. 

Two projects recently triggered this wave of emotion, one will be mentioned and focused on today, and the other will be discussed at a later date (spoiler, it’s Coolman’s Universe). 

If you’ve been in the NFT space for a while, and have been dedicated to learning as much as possible, you’ve heard of Twin Flames by Justin Aversano: the healing journey of a photographer who lost his fraternal twin in the womb, who set out to find catharsis in photographing 100 pairs of twins. 

If you’re familiar with Twin Flames, you’re definitely familiar with Twin Flames #49, which is the fifth highest selling photograph of all time, checking in just under $3.8M. #49 is an unbelievable photo that shows a woman staring into a mirror while holding her sister’s death certificate. It focuses on the pain and struggle that surrounds the death of not just a loved one, but a twin, which ties the project completely together, offering a level of synchronicity that is reflected in Aversano’s work and personal life. 

I personally came to NFTs too late and by the time I learned about Twin Flames, it was well out of my reach and beyond the budget that I am willing to allocate toward NFTs, so I left it for what it was and moved on. Recently, however, I came across a Layer 0 episode of the Bankless podcast that featured an interview with Aversano. I typically skipped Layer 0 episodes since they focused on the personal lives of developers, but since Justin was a successful NFT artist who was launching his own curation company, I was curious to see if any alpha can be taken away from this experience. 

While the episode focused primarily on Justin’s journey and his career from the early days of his life until now, his struggles with the pain that came from his grief and sorrow resonated with me, creating a connection that I normally never felt when listening to a complete stranger speak. This drew me to him as a person and an artist, which when investing, is something that should exist. A certain level of admiration and respect is needed before committing large sums of money to someone in hopes of them achieving or creating something special. 

Aside from feeling a connection to his story, it was his vision for the future, that focused on personal and creative growth, that drummed up a sense of security for me in a world full of grifters. Aversano mentions briefly the roadmap he has laid out for himself over the next few years that eventually culminates in him hopefully embarking upon full length feature films. 

I grew incredibly bullish on the brand that he was creating, alongside the future opportunities that his art would possess, which led me down the rabbit hole to one of the projects that I have personally loved most in the NFT space which I believe will have grail potential for many collectors for many years to come: Smoke and Mirrors Physical Tarot Scrolls. 

Composing the Scrolls

Smoke and Mirrors will be broken up into two collections. There are the black and white photos which each scroll is based on that have been presold to collectors and will be listed on OpenSea under a separate contract in February, and there are the Physical Tarot Scrolls. 

Each photo in the collection is meant to be a representation of a tarot card found in a deck. The photos are then developed, scanned, silkscreen layers are created and screen printed on Egyptian papyrus, photographed again, edited and minted as NFTs. Collectors buying a piece for the first time are able to claim a physical copy of the project in conjunction with their NFT. 

The scrolls are one of the few pieces of art in the NFT world that give primary owners the ability to take physical custody, alongside digital ownership on the blockchain. 

If collector’s decide not to take custody of the physical version, they could leave that option unclaimed for future buyer’s on OpenSea down the road, when the NFT is relisted. This could in theory boost the value of the NFT since buyers would get access to two copies as opposed to one. However, collectors will need to verify with Jason Ostro at Gabba Gallery to determine if the physical copy has been unclaimed. 

Although there could, theoretically, be a multiplier for Tarot Scrolls listed on OpenSea that allow for physical redemption, it hasn’t affected floor prices much for those scrolls that are NFT only. In the recent wave of new buyers that have entered the market, numerous scrolls have been purchased in the 5-8 ETH range without there being a physical copy attached to them. This shows the sudden demand that is rising for this project while it lies dormant during its stealth minting phase. 

So how does someone get their hands on one for the first time, if purchasing on OpenSea isn’t an option for them?

The Scroll Chooses You

Currently the scrolls are under a stealth mint phase and only being distributed to private wallet sales. These sales are comprised of Quantum.Art Discord members who are genuine art lovers that are consistently active in the Justin Aversano channel, and early actors who signed up for the Greenlist when it was posted in Discord in 2021, before the sudden influx of attention to the project occurred. 

Active members of the Discord channel who are verified as Quantum collectors receive priority over unverified members, but are at the mercy of random selection over time. If a user is unverified but a valued community member, there is the possibility of being assigned an opportunity to buy one, otherwise, unverified users could find themselves at the mercy of random raffles to have a chance and mint one. 

For the lucky few who are selected and able to mint, the price is .21 ETH, which, when considering the floor is currently 7.5 ETH, is a tremendous steal and a life changing opportunity. 

Although this creates an amazing chance to make $20,000+ for people, very few scrolls are actually being listed for sale on OpenSea, with very few people willing to part ways with them for prices beneath the floor. There have been sales, of course, in the 2-4 ETH range, I personally was fortunate enough to grab mine for 2 ETH, but the latest wave of buying has been at the 5+ range which, potentially could become the norm moving forward as a new wave of higher end collectors begins entering the mix. 

The lack of say here really mimics the celestial uncertainty and synchronicity that this project embodies. Collectors are at the mercy of the universe which determines whether or not they will receive an opportunity to mint. If gambling on the universe isn’t the thing for you, users can take their chances participating in the 1/1 auctions for a scroll if desired. 

The 1/1 auctions are slightly different from the 1/5s that I have been talking about above. Each of these pieces follows the same formula of photograph and color choices, but the differences between each one are based on the execution of the colors and the type of papyrus used. 

1/5s are printed on a light Papyrus from Egypt, and each edition of the 5 are slightly different in terms of where the colors are located and the way they are presented on the scroll. With the 1/1s, the same principles of color apply, however, they are printed on a darker papyrus that was dipped in the Nile River, which adds an extra layer of mysticism and supernatural power to these beautiful works of art. 

The 1/1s, however, have seen a sudden rise in demand with auctions ending in the 8-9.9 range in the past few go arounds, which is something to watch and consider as the project matures and mints out in its entirety. 

More importantly than money, however, this project is about art that vibes with your spiritual connection to the universe. If there is a connection that is meant to be made, it is likely that it will occur at some point in this journey. And like having a tarot card reading, the scroll that links with you does tell an interesting story about your current spiritual location, or your future opportunities. 

This is a project I’m most bullish on not because of the money, which I do think will be rewarding and could be generational, but an appreciation for the artwork and narrative that develops when analyzing each individual piece. 

Instead of giving a breakdown for what makes this project super amazing from a financial perspective, like I normally would when writing about NFTs, I want to take this next section to break down some of the pieces I enjoy the most, some of which are available for sale on OpenSea, owned by me, or locked away in someone’s vault. Let this be a rare time of reflection and appreciation for art, rather than investment. 

Reading the Cards 

Each of these is purely a work of art that belongs in a museum somewhere, and I wholeheartedly do believe that at some point, someone will have these displayed in a gallery in NYC, probably something like the Guggenheim if I had to guess. 

They just work so well as multimedia constructions that reflect the new and the old, with the composition of something mystic, surreal and supernatural. 

We’ll start with the one that chose me, which was the Ten of Staffs 4/5.

In tarot the Ten of Staffs typically represents someone who is carrying an incredibly heavy burden that is struggling through challenges ahead of them. But through perseverance, understanding and acceptance, that challenge can be completed with a new beginning being bestowed in the near future.

We see this idea of struggling through the burdens we carry and the need to push forward and persevere through the photo that Justin has chosen for this card.

Here we see the subject standing at the gravesite of his brother, the use of blues covering the tombstone and the world in front of him and around him acts like a border of his sadness and despair, a border of his burden that he has had to carry throughout his life. The use of red in the back symbolizes the anger that is behind him, but still occasionally rears down on him, the anger of loss that no one can ever truly transcend beyond, but only grow to accept. While standing over the grave of his brother, we see a green shadow emerge, an ephemeral symbol of his brother’s spirit alongside him, walking through and with him alongside this journey, delivering the subject through their most difficult times and giving him the assistance and guidance to push forward and enter upon a new world full of new challenges and opportunities.

The Empress 5/5 is another scroll that I adore, which stands out to me visually. In tarot, the Empress is typically a symbol of power over the years and all growing things. She is the symbol of creation, whether it is life, art or new ideas, she is the embodiment of the force that looks beyond and at home simultaneously, aware of the future and the present while using her force to reign in nature.

We see this idea delivered through the placement of the subject and her shadow casted outward. Here we have a dichotomy that is developed. The subject is staring intently at us, into our souls, into our third eye, into our present, showing us the dominion she has over the growth that represents us, while simultaneously her shadow looks out into the ether to see where we’ve been and where we are going. The shadow in white shows the purity of her intentions, her goal to to provide us with new opportunities and new blessings. The use of the gold symbolizes the bounty that is consistently bestowed upon us each day with the pinks beneath her symbolizing her maternal nature. It is a beautiful piece that as one focuses closer on, one finds a deeper meaning and understanding.

The newest scroll to be minted, which is currently still in auction at this moment of writing, tells a wonderful story of humanity and the architect that constructs our consciousness and living embodiment: The Three of Coins 1/1.

The card displays an architect that is building, the powers of masonry are present and the card in its upright manner symbolizes the wealth and potential, it is symbolic of the genius one possesses and the opportunities that are being built each day by the individual fulfilling the creator’s wishes.

We see this reflected in the scroll through the choice of subject. Above we have a shaman who is known for his work with mushrooms. He is centered perfectly in the scroll. He is holding mushrooms on their stem above his head as he pixelates his consciousness and enters the realm that transcends time and space, the realm of reality’s purest being. The subject is adorned in blue here to represent the uniqueness of his abilities to advise people through their journeys and help them be architects of their reality the same way that Terrence McKenna posited that magical mushrooms were the architects behind the evolution of human consciousness. We see the green behind him as a force, a vortex, a split in the matrix that consumes reality as typically known and delivers the reality that is uncorrupted and part of the universe’s intentions. It’s a lovely image that embodies the creative and spiritual journey that people and this project has set out to embark upon.

There are many other images that stand out at me, the scrolls are truly masterful works of art that deserve to be hung up in museums and homes.

Whether or not these scrolls are attainable for everyone remains to be seen, but the reality is they are composed to be appreciated by all and used as a guide into one’s spiritual and creative journeys.

You don’t realize how important or valuable art is until you’re much older and see the effects pieces have on people in classrooms, museums and galleries. And for most people, that moment of clarity never even happens. 

Photography wasn’t something I grew up with. I didn’t attach any value to it or viewed it with any importance. I wasn’t one of those people who understood the logic of owning a really nice and expensive DSLR camera. And it made even less to me when the iPhone came out and the cameras started getting better and better. 

But, for a brief period of time, before I lost track of my innocence, and let Facebook take it away from me, I was briefly into the idea of taking photos for my Instagram when the app first gained popularity in the 2012s. The different filters, the different ideas, the landscapes, the imagery from my journeys, it was briefly this fun method of expression that I never acknowledged before or even knew existed.

    And then it happened. 

    Like everything.

    Facebook took Instagram over.

    And.

    Literally.

    Killed its innocence. 

The app went from being this beacon of art and creativity and this hub of social interests and desires and now ecommerce. It became a hub of memes. A place for women in bikinis. A place for lavish lifestyles to be celebrated. 

And like everyone else, I forgot about what I loved from the early days of the app and fell into the trap of monetization, validation and desperation that Facebook created. And I ignored photography again and never even realized what was going on. 

But then, somehow, I started studying NFTs and saw that this one project called Twin Flames was worth nearly 200 ETH and I couldn’t figure out why. I didn’t know who this Justin Aversano character was. I didn’t know what his deal was. And I didn’t know why anyone would pay that much money to own digital pictures of people standing next to each other, doing things, or holding a bag of weed. It just confused me. 

So like everything in my life that I don’t understand, I ignored it for a while and moved on with my journey. Eventually I studied PFP NFTs, got into the understanding of what made ArtBlocks attractive, and continued on with my life. 

One day, while listening to Kevin Rose’s PROOF podcast, he mentioned this new website founded by Justin Aversano, the Twin Flames guy, and it struck me that this could be a cool thing to follow. He mentioned a project by this woman, who turned out to be Amy Elkins who is an amazing artist, who took a selfie everyday from the moment of her lockdown until her vaccination, and it just struck me as something so cool, chill, unique and sensational that I ought to look into it.  

But I didn’t get into photography, or photography NFTs, until I listened to an episode of Bankless’ Layer Zero with Justin Aversano. 

Somehow, someway, this was one of those interviews that just stuck out and connected with me—to the point that I had to DM Justin afterwards and say thank you for spiraling me into my new obsession, photography NFTs. 

I haven’t collected any yet, to be completely honest, but I have been spending each day in the Quantum.Art Discord and have decided to bring awareness to this wonderful community and the amazing artists that live within it. 

Quantum.Art

If you’ve been into NFTs for a while now, you probably have heard of ArtBlocks, which is the renowned generative art curator that has produced standout projects like Fidenzas, Ringers and Chromie Squiggles. 

Quantum is something similar to ArtBlocks, but for the world of photography instead.

Artists can submit their photography collections to the curators, and if they are chosen, they are listed on the website and minted by collectors of Quantum pieces, contest winners and the public if any remain. 

The key to giving yourself the best chance here, is to be an owner of a Quantum piece, which gives you earlier access to mint a project than the public receives. 

This is a nice way to continually reward the community for their support, limit flipping, and prevent gas wars and bots from overrunning their collections. 

Quantum’s ethos is to get their collections in as many hands as possible while focusing on actual collectors, and not just flippers. It’s an organic, bottom up movement to create the brand, provide the needed service, and reward artists and holders alike. 

The projects Quantum has chosen thus far are narrative driven and full of intense raw emotion, human vulnerability, intrigue and cultural appreciation. 

Quantum was founded by Justin Aversano and reflects his creative style by cultivating a niche that focuses on telling a story not only through images, but through the way each photo in each collection is chosen by the artist and the intimate focus on the creative process. Quantum brings attention to a collection of images that tell a story and bring viewers along for the journey, ranging from landscapes to portraits and badass imagery of moments in life. 

Currently projects are more limited in quantity in relation to generative art and PFP NFTs with collections ranging from 23 photos up to 377. Since each medium is carefully constructed by hand, photography finds itself closer to the digital art 1 of 1 world of NFTs than the generative or PFP side that has become very popular. However, unlike the 1 of 1s, photography NFTs do manage to maintain that collection feel that draw in numerous viewers and allow collectors to engage in discourse about their narratives playing out in their photos with others in the Quantum community. 

Community Building

Since joining the Quantum community, I can very much say it’s been one of the best, most enjoyable experiences I’ve had thus far in the NFT world. 

It reminds me of the bonds of the Cool Cats community, without the massive overflow of members and attention that makes it difficult to check in for a few minutes each day and create relationships. Since Quantum is still very nascent, existing for around a month or so, the community is hardly as big as it can and will be one day. It’s mostly filled with collectors of Quantum projects, fans of the Twin Flames series, and likeminded photographers sharing their projects and ideas. 

Users are very helpful and willing to discuss photography questions and provide feedback on projects that are shared with each other. Members of the Quantum team are accessible and willing to solve any issues that come one’s way with the minting process. Just this week, Quantum minted a new project, Rumors of Arctic Belonging by Kiliii Yuyan, that had new members who participated in a cultural photography contest eligible to be on the QList to have a chance and mint early. Unfortunately, those members dealt with a glitch on the day of the mint and they were incapable of minting as the project sold out. In the traditional web 2 world, and in some other communities, these members may have been completely out of luck and casted aside, however, the Quantum team made it up to the 20 people who were unable to mint by providing them exclusive early access to Quantum’s next project by Mercedes Jelinek. This shows the attention to detail and the care for its community, especially considering that Mercedes’ project only has 23 NFTs available. 

It’s rare for teams and founders to also be present and involved each day with their community. All of the mods and even Justin Aversano find themselves participating in discussions and asking questions. In addition, we see the photographers whose collections were listed for sale even participating in their own Discord channels, as well as in the channels of their peers, showing appreciation for each other’s artwork and the community as a whole. 

Quantum is a nice wholesome environment that is free from discussions about prices being too low, or the need for floors to be swept, and instead its filled with just individuals who love art and photography who enjoy sharing their time with each other. 

We also have users rewarded with opportunities to get exclusive access to projects based on their involvement, ownership and overall care. Justin’s newest project, Physical Tarot Scrolls, is currently being released weekly through a series of stealth drops that are awarded to community members who applied for the GreenList, allowing private sales to happen and avoiding the project from falling into the hands of bots and flippers, and instead, in the hands of collectors who appreciate the work for its intrinsic value and merit. 

Season 1 

Similar to ArtBlocks, Quantum’s listing process goes by seasons, with eleven photographers having their work being showcased and made available over the course of time. 

I won’t talk about every project that has been minted thus far, but instead will focus on the ones that have stood out to me and created a connection with my personal life. That isn’t to say the other collections aren’t beautiful or mind blowing in their own nature, but I rather focus on the ones I am drawn to the most for the sake of time and convenience in this article. 

The first project that was minted on Quantum happened to be one of my favorites. I first heard of the idea on Kevin Rose’s PROOF podcast and although I didn’t mint it at the time, nor own it currently, it has become one of my favorite NFT collections overall and a goal of mine to collect: Amy Elkins’ Anxious Desires. 

Anxious Desires is a collection of portraits that Amy took each day from the start of her lockdown until the day she received her coronavirus vaccine. Each image shows the dire hope for life, the desperation for the end, and the sensational playfulness of being stuck at home for months, uncertain of what would happen, and how our fate would play out. It is a narrative filled with all of the emotions we’ve associated with this pandemic, and the clear and concise chaos of our hearts and minds rattling against the cages locking us in our houses.

Each of these photos are tinted blue and provide a nice pop of unexpected color while expressing our feelings behind the event overlaying this entire project. 

Shortly after Anxious Desires, Touching Strangers by Richard Renaldi released, which was a porting over of a previous project from the physical world into the digital one. 

At first I didn’t understand the allure of Touching Strangers, the images are typically just two people standing next to each other, embracing as if they were intimate friends or partners. But the narrative behind each image began to spin an understanding for why this is not only a valuable piece of art, but a gorgeous representation of human vulnerability, innocence, and self-consciousness. 

Renaldi gathers two individuals who have no connection with each other, no relationship, understanding or awareness of their existence and positions both of them next to each other, embracing as if they have always known each other. It’s an interesting visual juxtaposition of our most intimate desires and our biggest insecurities. 

Most recently, Quantum released a project by Kiliii Yuyan called Rumors of Arctic Belonging which captures some of the most beautiful, terrifying and harrowing images of life in the Arctic. Rumors captures a lot of the cultural essence and significance of those living in the Arctic while combining Yuyan’s Native Siberian heritage. His images tell a beautiful narrative of destruction, culture, and innocence. 

There are many more great photographers who have collections on Quantum that are worth looking into and learning about. Mercedes Jelinek, Mona Kuhn, Julie Blackmon, Joey L, Sally Davies, Kris Graves and Alberto Rizzo have amazing collections worth looking into and exploring. I haven’t mentioned any of their work in detail, but it not a slight to any of their art, and instead a personal preference for the work I’ve really obsessed over and fallen in love with. 

Season 2 expects to have more community based drops that the community can vote on, rewarding loyal members and helping g them grow their brands, something that seems similar to the ArtBlocks Factory ideology. 

Future Opportunities 

People looking for a quick flip and an easy way to make money probably shouldn’t look at Quantum.Art as their preferred vehicle to increase their Ethereum stack. But lovers of photography and artists looking to expand their brand should definitely consider learning more about Quantum and its wonderful community. 

Without having too many details available, and simply going off of what’s been alluded, Quantum has a lot in store for its members, photographers and collectors. I fully expect to see the platform grow over the next year and reach a mini ArtBlocks level of notoriety. Right now photographers are left minting on Foundation and OpenSea and relying solely on their own merit and mainstream reputation. Since the medium isn’t one that is popularized too much in smaller circles, a curation entity that develops a well respected reputation could become a powerful tailwind that grows the genre and opens the door for endless opportunities for its creators. 

I’m not sure what Quantum will look like in a year or two, but I am certain we will see growth in its community, its projects and its reputation. PFPs have gotten all of the attention, followed by generative art, but the next frontier that collectors are starting to acknowledge is photography. It’s only a matter of time before we start seeing reputable people in the NFT community begin sweeping floors in the photography world. And due to the limited nature of these collections, it could create a powerful tailwind that quickly prices people out. 

I am a member of this community, however, not for the money or holy grail collectible, but for the experience, passion and relationships that have developed in this very short period of time. I look forward to continue growing my exposure to the sector and wholeheartedly do believe that it will see significant growth over the course of this decade as people realize how powerful narratives within photography can be. 

I don’t think of Quantum as an investment opportunity and am not making any recommendations or offering any financial advice, but I think it’s a great community filled with amazing artists and creators who all share a common goal, and I think the opportunities here could be endless in many ways. 

Since falling down this rabbit hole as a direct result of Justin’s Layer 0 episode, I’ve decided to grab a camera and try my luck out with a couple of projects that interest me. It’s hard to be bearish or ignore something special like this that can trigger an emotional connection in a very quick way. 

Whether someone is interested in buying photography NFTs or not, I do think it’s worth checking Quantum out and submitting work. We’re very early here, but this new beginning is worth studying and understanding. 

QM everyone, have a happy day. 

Typically when you hear of a gas crisis, you think of long lines at the pump after a natural disaster or a shortage overseas due to some kind of global issue. 

But when it comes to our world of crypto, the gas crisis is directly related to people feeling priced out of Ethereum because of its fees to transact. 

This has become a hot button issue lately with VCs on Twitter using it as their opportunity to pump their bags in search of exit liquidity. 

I’m not going to spend my time here today writing disparaging comments about Zhu or 3AC, but I want to explain some of the flaws in the logic that was presented and help people realize why gas fees are so high, and what this next chapter of crypto represents for everyone. 

I have long been critical of gas fees and the costs to transact on mainnet, although I am a big Ethereum bull, I am by no means a maxi. Instead, I am someone that can see things objectively and make a clear comment on what I believe is the best case scenario for everyone involved in our own little bubbles. 

And that’s what this article is aiming to do, explain away the costs for gas fees, the need for L2s with tokens, and why the competing L1s may be good products for users, but not necessarily Ethereum killers. 

Inflation at the Pump

Right now it seems miserable trying to use Ethereum to do anything beyond just sending ETH back to Coinbase or another wallet. And I totally get it. 

It’s not fun trying to mint an NFT that costs .05 and paying the same amount or more in gas fees. 

It’s miserable trying to make a swap on a DEX and it costs you more in gas than the ETH you’re looking to flip. 

It’s impossible to play around in the world of DeFi when you’ll spend more in gas than you’ll make in interest at the end of the year. 

I get it. 

If you’re a small user, you can’t do any of these things without feeling like you’re being taken advantage of or beaten down by the taxman. 

I’ve been hyper critical of the costs to bridge into L2s like Optimism and Arbitrum to make a bankless lifestyle possible for people with small sums of money. 

I’ve been on the fence about whether or not the future of DeFi can lie within Ether’s grasp. 

But the more I learned, and the more I thought about it, this dilemma is really just a major reflection of why Ethereum has the network effects and developer moat it does, and why its future is insulated from fud attacks and gas prices. 

People who aren’t tech savvy or are new to crypto struggle to understand why gas fees are high. They think it's just a reflection of bad tech and greed, but it’s the exact opposite. 

High gas fees are the result of high demand for blockspace. 

What does that mean? 

A lot of people want to use Ethereum and they are desperate to use it by any means necessary so they pay a lot of money to have their transactions be included in each block that’s being confirmed. 

Think of it this way, if you’re still confused. 

You’re at a pool party in Las Vegas and you need to use the bathroom. You walk over to the bathroom and there’s a long line full of hundreds of people. You don’t want to wait to be at the front of the line so you walk up to the bouncer at the bathroom door and offer him $20 to get in. The person at the front of the line, waiting, hears you saying that and says no, I’ll give you $30, and everyone down the line starts saying they will give the bouncer more money to go first. By the time everyone is done bidding on the bathroom space, the price to get in now costs hundreds. 

That’s essentially what is happening on the Ethereum network. 

There is an overflowing demand to use the network with people not willing to wait for things to get cheaper to use at a later time. 

So why are other blockchains, like Solana and Avalanche, cheaper?

Well, without getting into too much technical jargon, it’s because there are trade offs being made in decentralization and security, with fewer people confirming transactions, and blocks being bigger (capable of fitting more information at once). To the average user this seems like nothing, and it’s exactly why Solana and Avalanche are attractive alternatives right now, but at the core level that matters most to the world of crypto, the base layer, a completely decentralized, fully secure network that cannot be turned off is imperative. 

Imagine if at a certain point the bouncer at the bathroom decided to close the doors and not let anyone in, it would incite a riot and screw over the hundreds of people waiting to get in. When we have a small amount of validators and the inability to run a node at home, we have the potential for bad actors to do just that and halt the network or roll it back against the user’s will. 

It’s not the permissionless, trustless, free market that we are trying to create. It becomes the same paradigm we are trying to disrupt and escape from and it leaves us further indebted in the throes of oppression. 

This doesn’t mean we have to cast other chains away and ignore them, in fact that would be silly, non inclusive and a threat to innovation. Chains like Solana and Avalanche, which may not be as decentralized, and haven’t been battle tested with the level of hackers and traffic that Ethereum has faced, do possess certain qualities that are admirable and important. 

A side chain like Solana and Avalanche decreases traffic to Ethereum for small transactions and gives users another viable option. If I’m looking to engage in some basic stable coin yield farming, and I’m only looking to deposit a few hundred dollars into a DeFi protocol or LP, I have a wonderful home here in either of these ecosystems, the same way I could have a nice apartment outside of Manhattan. 

If you’ve ever been to New York City, or at least familiar with the stereotypes, you would know that Manhattan is one of the busiest, most heavily trafficked places in the country. It’s filled with natives, transients, tourists, visitors and workers. Ethereum is basically the same thing at this point. It’s the biggest city that we have inhabited in crypto. But as opportunities rise, traffic increases, and as traffic increases costs of living go up, and as costs of living goes up, it becomes harder to exist and do business on a smaller scale. So it forces people to leave the city and look for a home elsewhere. Whether it’s on the other side of the water in Jersey City, or a nice open plane in Connecticut, it encourages people to leave the traffic at the end of their work day and find new opportunities that make more sense for them financially. 

These migrations elsewhere become people using chains like Solana and Avalanche, giving them the same type of experience as Manhattan, but not as polished and not as safe and secure. But because it’s just people living in one bedroom apartments, or a couple buying their first home, it becomes an ok place to start your journey as you figure things out. 

But as nice as this experience is and can be, it does lack the same night life and experiences that you get from Manhattan. And the opportunities for your property to increase in value aren’t as high as possible. You see more panhandlers asking for money, there are more scammers on street corners, and you get the same knock off stores as you would in the city, but at a lesser quality. So you start to wonder what life would be like back in NYC. 

And this is where L2s come in which are the actual answer to the speed and scalability problem plaguing Ethereum.

Moving to Queens and Long Island

So while New Jersey and Connecticut are looked at as moving to competing L1s like Solana and Avalanche, leaving  Manhattan and heading east into the suburbs is equivalent to the migration to Polygon and Optimistic and zkRollups. Users aren’t leaving the Ethereum network, they’re simply moving 15 minutes plus away within the same state, which comes with benefits such as improved security and decentralization. 

Since L2s are built on top of Ethereum, they inherit the same qualities and principles that make Ether the most sought after piece of real estate in the blockchain world. Sidechains like Polygon aren’t necessarily secured by the Ethereum network since they are technically secured by the MATIC token, but they checkpoint back to it which maintains that relationship. True L2s however like Optimism, Arbitrum, and soon StarkNet and zkSync are completely kmsecured by the Ethereum network. 

So how do they work?

Rollups are a pretty cool advancement in cryptographic technology. They work by verifying the data off chain, and sending it back to the L1 to be confirmed. 

What does this mean in plainspeak?

You know how you have a bunch of songs downloaded from your old days. And these songs are just scattered around all over the place. It’s pretty annoying to try and do anything with them, one at a time, right. But what you could do, to make things more organized, is you can quickly throw them all in a folder to have them located in one central location in a nice, neat package. But, of course, if you want to send that folder to someone, it will take a long time to clear over the internet and it’s a long, boring process that uses more computation than you desire. So what you do instead, you compress that folder into a zip or RAR file and send that instead. That clears instantaneously and now your friend has a bundle of all of this music on their end. All they need to do is extract the zip or RAR file, open the folder and begin playing the songs they want to listen to. Rollups work in the same way. 

Rather than taking one transaction at a time, and sending it back to mainnet to be confirmed, they bundle hundreds, thousands, hundreds of thousands of transactions together, and when their set requirement is reached, they send the entire compressed load back on chain to get confirmed in one batch order, instead of a hundred thousand different orders. 

Think of it this way. Instead of having a hundred cars on the road in this tight, one lane highway that’s always backed up with traffic, you can put all of those people into one bus, allowing the road to be cleared up of any congestion, and letting the bus run as free and as fast as it can possible go on its own. 

That’s what rollups are doing. 

They’re taking traffic away from Manhattan and putting it into Queens and Long Island where it can be dispersed more easily, while still maintaining access to the city for work and leisure pleasure. 

Bundling these transactions into one batch at a time brings down gas costs for the user since it’s everyone pooling together and instead of paying $40 a gallon to fill up your individual cars, you’re paying $1 a person for admission onto the bus. 

The only trade off here, however, lies in latency and the potential lack of decentralization early on. 

So, at the moment, we have the potential for a latency issue where there may not be enough volume flowing into the L2s at once for them to send transactions back to the main chain in an immediate manner. If I submit my transaction on Arbitrum, it will be verified within .3 seconds, but it won’t go to the main chain at that very moment if there isn’t a heavy amount of traffic. Those batches may not be sent to the L1 for another five minutes or so, as they wait for the bus to fill up. This doesn’t affect me personally, but it does put a strain and stress on the Arbitrum network. However, as volume increases, latency decreases. If there are a billion people on a particular L2 at once submitting transactions, batches will be sent to the main chain almost immediately, with latency decreasing to the point of not being a real concern or issue. So scalability here, actually strengthens the chain and makes things stronger and safer as volume goes up. 

The decentralization issue that currently exists, shouldn’t be ignored, but also shouldn’t be feared. Because it’s not centralization for a lack of ability, and it’s not a sacrifice of decentralization to maximize and improve throughout, it’s centralization at the mercy of immaturity. Because these L2s are still in their infancy, they aren’t actually in their real mainnet yet, they’re still in beta and slowly being rolled out with projects slowly being onboarded. And admin keys still exist as a cautionary measure to guide the project along the way. The plan, as always, is to burn the keys or hand them to the community. So unlike the other L1s where decentralization isn’t as doable because of issues with running nodes and validators, this is more of a planned obsolescence that will occur over time as the networks grow and mature, which brings us to our next point that is a necessity to end this gas crisis in a quick and easy manner.

Tokens. 

Price Dictates Sentiment

Solana and Avalanche have the reputation they currently do because of the way their tokens have violently increased in price. This parabolic rise from pennies to hundreds of dollars acts as an elite marketing mechanism to gain mainstream attention and trigger mimetic desires to find the next bitcoin and Ethereum. 

It’s stupid, but the cold reality is that no one actually cares about technology, decentralization or values. The main motivating factor for regular people on the periphery of crypto looking to get in is the ability to get rich quick. Nothing drives sentiment better than price + narratives. Make a bold claim that Solana and Avalanche are infinitely better than Ethereum because fees are low, support it with strong buy pressure that jacks the token price up to stratospheric valuations and people automatically assume and think they are the future of tech in this industry and that nothing else matters. 

Because of this we see a disproportionate love toward L1s that are deemed Ethereum killers, and a lack of interest toward scaling solutions like Optimistic and zkRollups. The problem lies completely in the inability to properly market the alternatives to living in Manhattan but remaining in New York. 

In order to fix this and drive traffic to L2s, the devs need to consider adding tokens and using them in liquidity mining programs, and allowing them to function as marketing tools, as well as tools for decentralization. Releasing a token will allow protocols to burn their admin keys and take a step back, and will reward early users. This extra bit of attention will make people aware of the alternatives and provide them with an option that solves the trilemma that plagues crypto. 

Without a token, users will have no choice but to bridge to these other ecosystems, which is not an easy process for non crypto natives. Part of the allure for Solana and Avalanche is the ability to buy them on Coinbase and easily enter their ecosystems once those tokens are sent to their respective wallets. When you have an L2 that doesn’t have a native token that you can use as a medium of exchange to transfer value from the CEX to the network, it begins to become a complicated experience for new users that ultimately leads to paralysis and lack of adoption. 

At some point CEXes will offer native on ramps into these L2s, but it could also become complicated and lead to mistakes and “lost money” when users don’t understand the different networks they are sending their Ethereum to. Everyone needs to understand that although crypto is growing rapidly, it’s UX is far from desirable and overall a bit of a process for non crypto natives. 

Tokens remove some of this worry, while creating economic incentives for adoption and driving attention to their networks when price appreciates due to accumulation from large users looking to easily onboard into their networks without burning money on gas fees for bridging costs. 

In addition, wallet providers like MetaMask should also have the different native networks preloaded into their wallets to make it easier for new users who aren’t aware of the steps needed to set up all of these different networks. But that is a different argument for a different day. 

A Multichain World Without An ETH Killer

While some like to wax poetically about how Ethereum is going to get killed and destroyed because of gas fees, a lot of those comments come from ignorant people or those with ulterior motives lining their pockets. The reality is, we will have a multichain world the same way we have multiple telecom and ISP companies. 

Avalanche and Solana are likely to remain relevant and important pieces of the crypto world. The only way they don’t maintain their presence would be a sudden abandonment of VC funding, or users ditching them after a severe hack or blockchain issue. 

At some point, they may see scaling issues as they potentially reach the level of traffic that Ethereum possesses. This could lead to them evolving into rollups for Ethereum, or developing their own layer 2 plans. 

But they aren’t going to completely dethrone Ethereum and kill the network effects and developer moat that currently exists. 

Why?

Composability.

At the moment, everything is being built on TOP of Ethereum. Everything we see is an evolution to the network to make it better. These other chains, although possessing higher throughput and appearing to be more scalable today, haven’t withstood the tests of time or effort that Ethereum has dealt with. Ethereum is basically 10x bigger than every other network TVL wise. It’s also the only place where high value NFTs are CONSTANTLY being minted and sold. For an ETH killer to come in and dethrone all of that, it would have to have strong evidence that it can handle that much traffic and still outperform the L2 strategies that Ethereum currently possesses. 

Needless to say, other chains will have a purpose, for the same reasons users use Sprint or TMobile instead of Verizon or ATT. There is a lot of traffic out there, and there will always be a lot of demand for different operations and user experiences. 

So while everyone is claiming Ethereum is going to die because of gas fees, be the one that’s educated enough to know that gas fees thwart spamming, limit scammers and are a direct reflection of how much usage is actually on the network being settled on a consistent basis. 

We can have a multichain world, but we don’t have any evidence of that world leading to the untimely demise of the Ethereum network, especially when sharding is finally introduced, which should, in theory, turn Ethereum into a blackhole that is able to consume everything around it and continue to expand rapidly without any repercussions. 

But, until then, we will focus solely on rollups, competing L1s and the need to improve UXs for newcomers and utilize tokens as marketing devices to drive up TVLs and encourage the migration to the burbs. 

A lot of us in crypto like to joke about ponzinomics: the game theory behind DeFi protocols that are too good to be true and immediately grab your attention as a ponzi scheme that is going to bankrupt you in due time. 

    Projects with strong ponzinomics usually receive negative attention from ordinary users upon their first issuance and find themselves filled with two groups of holders: degens who don’t know any better, and apes who are too far down the rabbit hole to remember their conditioning from traditional finance.

    I found myself fulfilling the journey of the latter when I initially denounced coins like OHM because of their ponzi like rewards before fully detaching from the programming and learning to understand their structure, value proposition and long term benefit to crypto. This doesn’t mean these coins aren’t ponzis, but their utility and adoption has allowed them to evolve beyond the ponzi stereotype and into the ponzi meme. 

    Although I have a position in OHM, I won’t be talking too much about Olympus here, just touching on it briefly for the sake of context and focusing more closely on Wonderland which is @danielesesta’s fork of OHM on Avalanche. 

    The first time I heard of TIME, I was a little confused as to how and why a 72,000% APY could exist or even be remotely sustainable. But, being that I had been selling off alts left and right and consolidating into an Ethereum position, it was something that intrigued me enough as a high beta, potentially leveraged play on crypto. So I ran the compounding calculator I found online and discovered how ridiculously amazing the ponzi effects were. Aping a few dollars that I could afford to lose completely seemed like a no brainer. But I didn’t understand what I owned and why it could actually be a valuable long term investment until now. 

From Olympus to Wonderland 

TIME started off as just a fork of OHM, existing as a decentralized reserve currency on the Avalanche network. 

    Unlike traditional stable coins which are pegged to a dollar while being backed by fiat assets, TIME is allowed to run freely and experience price discovery based on traditional auction market theory and instead is backed by a basket of cryptocurrencies such as MIM, AVAX and TIME-MIM/TIME-AVAX LP tokens. 

    Decentralized reserve currencies like OHM and TIME get their funding from buying liquidity tokens from holders and offering the OHM and TIME tokens back at a discount. Users bond their tokens for a set period of time and at expiration are able to claim the underlying asset at a discount. The DAO then uses those funds to provide liquidity and capture the fees, issuing tokens to stakers rather than yield vampires who drain pools during liquidity mining programs and exit when the incentives dry up, ultimately dumping on holders. 

This is a valuable alternative for DeFi protocols trying to gain traction and create liquidity. Instead of renting liquidity out and diluting holders through emissions, they’re purchasing liquidity up front, creating income for the treasury through the fees collected, and rewarding long term believers of the protocol with the issuance that otherwise would’ve been chewed up and spit out by degenerate farmers who didn’t care about the underlying protocol at all. 

OHM first introduced this concept earlier this year and has seen its token grow in value while its APY has slowly decreased with every milestone that’s been met. 

TIME replicates the basic tenets of OHM but shifts its focus in a different direction. Whereas OHM has evolved into a pivotal infrastructure play for DeFi by providing protocol owned liquidity services for other projects and networks,  Wonderland is focused more on maximizing value and opportunity for holders and builders by becoming a decentralized venture capital DAO. 

Currently TIME has $464 million in its treasury. For comparison’s sake, OHM has just over $200 million more in their treasury, despite being around much longer and having partnerships with a variety of other DeFi protocols. 

The interesting thing here about TIME, however, is what the money is meant to be used for. At the moment, the treasury backstops the emissions and provides the runway we see that sustains the current interest rate. However, the intentions of Dani and the DAO seems to be more altruistic than some believe.

The protocol prides itself on being an opportunity for people to make money and create wealth, but the emissions aren’t always going to exist, and at some point, the runway will close, the remaining token issuance will be burned, and the DAO will progress upon its next chapter of its existence, which is to function as a VC DAO that owns a gaming studio. 

The Future of Frog Nation

Dani has drawn a lot of respect amongst DeFi degens lately, which, in a lot of ways, reminds me of the cult following Andre Cronje had last year. 

    Whatever project Dani mentions or touches has quickly seen new users flocking to it. I fully expect this meme to continue as Popsicle.Finance comes back to market in the coming days, but I won’t get into ICE too much right now, since this is Wonderland after all. 

    Frog Nation is the meme that’s surrounding Dani’s projects and the group of people who blindly trust him as they ape into his DeFi protocols. And rightfully so. Abracadabra.Money is an amazing innovation. Magical Internet Money is the most ironic, but brilliant idea in a long time. Wonderland is an insane wealth creation vehicle. Being a Frog is being on the right side of TIME right now, that’s for sure. 

    But, Frog Nation should know that the fun and excitement directly associated with Wonderland can quickly change based on the DAO’s decisions and desires to evolve. 

    At the moment, Wonderland is geared toward creating as much value for its stakers as possible while growing its treasury as large as it can balloon. This is the perfect time to be a staker and be along for the ride into Wonderland. Currently the APY is up to 80,000% while the price of the TIME token sits around $7,700. At the current rate of emissions, a $200 investment will yield you six figures in a year if everything hung around here for 365 days. 

    This is the insanity that drew me in and finally pushed me to the right side of the ponzinomics bell curve. 

    I obviously don’t expect TIME to continue issuing its supply at this current rate, nor would I expect the token price to remain stagnant, but I do plan on being here for the ride regardless of what happens, and this is why. 

    At some point, when the treasury is at its desired threshold, the DAO may vote on ending the runway and bringing emissions down to a normal level while burning some extra tokens. This will have an effect where the price of the token may go up because supply suddenly disappeared. At the same time, it could have the adverse reaction where farmers dump since the ponzi yields are no longer present and the allure of the cash train has been abandoned. But regardless of what happens price action wise, it's the usage of the money in the treasury that’s going to be an incredibly interesting development. 

    The DAO has complete control to vote over how the money is used, but overall, the early ideas look like creating, investing in, or buying a game studio in which the TIME Token would function as the unit of measure, and the idea of funding developers with their own projects with royalties/fees feeding back into the treasury’s wallet. 

    Both ideas are exciting and altruistic as they would help builders create awesome products without being at the mercy of predatory VCs, and it would increase the utility and tokenomics of the TIME token. 

    It’s hard to quantify when this may happen, if it was up to Dani, he’d end the runway and burn the tokens tomorrow rather than diluting holders any further. But since the DAO has to vote on things, it’s a debate that will have to be held over some point in time. 

    Personally, while thinking about Wonderland’s future and its current ethos and mission, I’ve gotten the feeling that there may be three to six months of insane yield opportunities ahead of us. This is no guarantee of course, with just a gut feeling based on my synthesis of the project’s goals and growth, but I imagine a treasury that plans to be involved in game development that wants to fund other crypto projects would probably need closer to a billion dollars in cash under its belt to best prepare for the opportunities ahead of it. 

    To me, having a billion dollars in the treasury gives plenty of cushion for multiple projects, potential setbacks, and adjustments during a potential bear market. Remember, TIME isn’t backed by US dollars, it's backed by crypto assets like the Avalanche token and MIM (which is backed by interest bearing tokens).  

    The DAO is currently planning to put some of its treasury to work in a safe and passive way by using the naked AVAX and MIM tokens to earn an extra $1.5 million for the treasury each month. This is a great way to show that Wonderland is for the people and not for the money. Instead of buying yachts, hookers and lambos, we’re seeing the DAO put its money into the crypto ecosystem to continue growing its offerings and value for holders. 

    Although we don’t know definitively what will happen in the future, whether or not the plans for a gaming studio will fully materialize, or if the APY can be sustained for the magical 365 day period of time that turns everyone into millionaires, we do know one interesting thing that has been developed here by Dani and the Wonderland community, a new concept of money and value is being created. 

The Shift in Financial Understanding 

When you start off in traditional finance, you quickly learn that anything over 4% is solid (beating inflation). So you subscribe to the idea that dividend stocks are solid ways to preserve your capital. 

    When you’re young, you’re told to be more aggressive, so you settle for 8-12% gains in index funds plus having some exposure to large cap growth stocks. 

    But…

    As you get deeper into the investing world you start to notice a common theme: the best wealth creation opportunities don’t come from companies paying dividends. Companies at the top of index funds for the S&P and Nasdaq set up great long term opportunities, but they technically underperform or lag their small or midcap high growth peers. 

    So naturally, you start to dive in deeper and deeper to find the best opportunities. And you learn about monetary policy and the effects it has on valuations and sentiment, and you make a ton of money and quickly see ridiculously large drawdowns of 30-50% from the highs along the way. 

    But then one day, you start talking to a friend and you hear about crypto and notice something, certain coins are giving out staking rewards with yield opportunities that vastly outweigh a lifetime of gains in the stock market. 

    So you automatically think it's a scam and a ponzi and a terrible investment idea and you ignore it. 

    This is all very natural and expected. However, the reality is, we no longer live in the traditional finance paradigm that conditioned us our entire lives. That reality imploded when 40% of the entire USD supply was created during the Coronavirus outbreak. At this point, we have to accept that money and value is no longer viewed or accepted in the same light that we are used to, and therefore, we should assign our understanding of returns and value in a new medium. 

For so long we have been conditioned to scoff at anything that seems out of the ordinary, to the point that we ignore interest rates above the Fed's zero risk rate because we are told nothing more can possibly be guaranteed. 

But crypto has shown us that anything is possible.

Which is the result of crypto being a completely free and unregulated market without a governing body overseeing it and pulling any strings. Without the fed backstopping crypto, we have team supply/demand metrics, real auction market theory, and real lending opportunities. 

When Gemini Earn gives me 8% on GUSD deposits, it’s because they’re paying for liquidity that they can loan out to others. When liquidity pools are incentivizing deposits with 30% APYs, it’s because they’re trying to build an even market. 

No one in crypto is giving out free money for no real reason, instead, they’re giving out fair and equal opportunities. 

TIME is no different here. I originally ignored OHM because I was in the middle of the bell curve and thought it was an unsustainable scam, but what I failed to comprehend was that OHM was incentivizing me with this yield to build a treasury that can be used to buy liquidity instead of renting it out. Wonderland is the same thing, Dani and the DAO are paying 80,000% APY that’s compounded every eight hours because they’re building the treasury. They are searching for bond buyers, searching for depositors, and in return, they are rewarding believers and yield farmers. 

Instead of taking money from VCs and issuing them millions of tokens at allocations under a penny, and instead of having a massive token unlock in a couple of years that explodes the circulating supply from 5,000,000 coins to 50 billion, so that the team and VCs can dump on unsuspecting retailers, they are buying your liquidity and inflating the token to reflect the treasury’s growth, which is a great alternative to predatory deals with VCs who are only there to drain the swamp financially. 

Rebase coins like OHM and TIME are democratizing finance, giving investors the ability to benefit from the rise in supply, rather than be ruined by it. Whereas dilution and inflation destroy value, expansion leads to financial and economic growth. Since these coins are starting with small supplies under 300,000 coins and growing proportionally with the treasury and the bonds sold, they aren’t destroying token holder value, they are only broadening the scope of it. 

This is why OHM has lowered its interest rate to 8,000% and plans to cut it again to 1,000% in January, and why Dani has floated the idea of killing the runway and burning tokens to preserve the current value of the coin. When the desired threshold is met, the best projects and communities willingly step in to lower the expansion mechanism and normalize the ship before control is completely lost. 

The Fundamental Flaw with Forks

While Wonderland is most definitely a fork of Olympus, it exists for a reason with an end goal. The concept of TIME isn’t to print money forever and grow a never ending treasury at the expense of holders, it has plans to disrupt the old guard through the use of its capital.

Unfortunately, when a project sees immediate success and attention, it is vulnerable to copy cats with impure intentions. This has led to the recent rise in forks of OHM and TIME like Spartacus.Finance, Snowbank and Euphoria, amongst many others, that haven’t developed the same long term goals or desires, or provided holders with any real roadmap or plan for the future. 

Although these could be good opportunities for a trading, following the wave of FOMO that pumps them up, they haven’t shown to be rewarding for holders who remain involved beyond a bonding period. 

Users should be careful when navigating forks like this that do not come from teams with a previous track record of success and respect in the crypto industry, or teams that do not have a general plan for when the runway will be turned off, or emissions will be wound down. 

Control over the treasury is also imperative as rebase projects like this should be completely decentralized and DAO run, not up to the mercy of one individual who has complete control of the funds through an admin key. 

Users should also take into consideration the bonding discounts, if they are dramatically larger than the current 5 day ROI period for stakers, they are likely to see those coins hit the open market upon the unlock and dilute the price of the token. 

If a project has no plans for its treasury, no real goals for what it wants to accomplish long term and its team is either fully anon and missing from Discord, or not actively building, it might be best to scalp the journey or avoid the ride, rather than dive into it heavy handedly and expect the same sustained success that TIME and OHM have experienced. 

I do think we can see new projects emerge using these rebasing and protocol owned liquidity mechanisms in the future to create a treasury that funds their project’s mission and ethos as opposed to going the traditional VC route, this could become a new, exciting form of crowdloaning that democratizes finance and gives unaccredited investors the ability to participate in potentially outsized gains that only institutions have available to them, but as always, it will come down to planning, reputation and execution. Without the proper planning, without the reputation or consistent appearance in the community, it is unlikely that any real execution occurs, and doubtful that we see success over the long haul. 

The future of finance is definitely evolving, as is the ability to create and establish value through new methods governed by communities and code, rather than the select elite. Protocol owned liquidity projects can become the new forms of funding for the world, but it might be a while before the opportunists are washed out and shuttered away. 

Anything can happen to Wonderland, a security exploit, a rug pull, a complete and utter failure to execute could destroy its entire reputation, but, at the moment, we are witnessing a completely altruistic opportunity to grow a treasury that benefits the community and potentially the entire Avalanche ecosystem. 

The world we know no longer exists, but the new paradigm being built is one we should consider exciting and financially rewarding. I currently have a position in TIME and OHM and am looking forward to seeing how they grow and deliver on their mission. 

As always, none of this was financial advice, crypto is risky, trading is risky, and the world ahead of us is a winding road that can very quickly lead us off a cliff if we’re not paying close attention. 

If you asked me in 2018 if I would buy a digital picture for thousands of dollars, I would’ve called you crazy and said hell no. And if you brought up the idea of that picture yielding me bananas, milk, honey and cheeth, I would think you were a crazy person that needed to put down the weed. 

But here we are, at the crossroads of a major paradigm shift, and a disruptive look into the psyche of a generation that grew up submerged in digital worlds before the idea of digital worlds were even a thing. 

So we need to discuss whether or not there is actually value that can be assigned to these yield bearing JPEGs, and if there is sustainability to their emissions and utility. Tokenomics play an incredibly important role here, and the fact that we are so early to this concept could lead to the majority of these NFTs losing their value completely as holders turn into sellers and developers turn into abandoners. 

The risks of being too early to this idea, and roadmaps potentially never being fulfilled, are ones we are taking as we view this as a potentially disruptive opportunity to create income from art. The volatility and high risk of failure is the cost of business that a lot of us have accepted for the chance to create life changing wealth from owning JPEGs. 

There are no guarantees this will work, but there are things we can look into and try to utilize for our own benefit moving forward. 

So let’s get right into it, start name dropping some projects, determine the feasibility of the value assigned to them and whether or not their tokenomics and roadmap warrant the current meteoric rise of NFTs. 

The Psychology of the JPEGer

In my last article about NFTs, I touched on this idea of a yield bearing NFT as something to look for when evaluating PFP projects. Unlike traditional art, PFPs are a representation of your digital identity and therefore carry a gamified aura around them. It is this fun, almost meme-like nature that draws us in, attracts newcomers visually, and develops an affinity that leads to brand recognition and community growth. 

Beyond that affinity, however, comes the need for an actual network to exist in order for a digital economy to take form. How that network is created comes down to the quality of artwork— it’s unique, vibrant nature—the roadmap—it’s feasibility and long term sustainable goals—and history of execution from the founders. If a project doesn’t have founders who are doxxed or possess a history of involvement in the crypto, art or business space, it doesn’t mean the project is an automatic red flag, but one should question and consider the level of consistency that would be present during periods of unbearable bear market behavior. 

For most people, the idea of a yield bearing picture sounds like hocum—nonsense—a complete impossibility. But the reality is, we are seeing a new paradigm shift in value, mimetic desires and culture. 

As a result of the Federal Reserve printing 40% of the total USD supply since March 2020, people do not assign value to a dollar the same way that they used to. Chicken wings went from costing a quarter a wing at bars on Monday nights to now $4+ a pound. Supply chains have been destroyed, labor has been decimated, and people don’t care about things the way they used to. 

People want to own assets that will appreciate in value while making them happy and leaving them with a feeling of fulfillment after spending years at the mercy of rich, elite bankers who took advantage of their economic desires and left them indebted in a state of working class hell. This is why we have seen so much attention focused on the GameStop and AMC short squeezes, along with the dog coin runs in crypto. 

This is where PFP NFTs come into play. 

Unless you’re an ape who doesn’t care about anything besides making money, a PFP project is something you’re buying because of an intimate connection to something in your life. Whether it’s the nostalgia element, the appreciation for art, color, composition, or just cool shit, you’re buying a PFP because it’s a reflection of your identity and it makes you happy to look at it. This is why we see everyone who buys an NFT making it their profile picture on social media, or the background of their smart watch or phone. It’s the part of us that we have developed for the digital world that we want to consistently look at and smile. 

And what better way to take the thing we like looking at, the thing that makes us smile, than to use it as a tool to stick it to the higher ups who try to control us. By tokenizing that picture and turning it into an income generating asset, you are causing heads to roll, forcing suits to look down at you as if you were a dumb, prepubescent moron who was left alone with mom’s credit card. 

The amount of resistance that I’ve received from suits who think I’m an idiot here reinforces my beliefs that we’re on the verge of a major paradigm shift that is disruptive enough to change the world and the way value is created and consumed forever.  

People like to fit in and be part of the crowd—they like the idea of having confirmation bias and seeing others with the same perspective. It’s in their nature to want to share their pain, anger, happiness, joy, etc. with other humans as an attempt to revert back to an emotionless stasis where they can continue functioning like rational humans again. This has drawn people to the idea that now is their chance to fight back against the oppressive machines and take ownership of their economic future. 

This has led to people cycling into crypto and NFTs in search of opportunities to create wealth in markets that aren’t manipulated by regulators and political insiders looking to line their pockets with as much money as possible. 

From here we saw the world of DeFi emerge, with people allowed to be the bankers and market makers that took advantage of their free will, giving them the ability to stick it to the institutions by emptying their savings accounts into yield generating protocols that not only beat the rate of inflation, but destroyed the compounded annual growth rate of the stock market. 

It was only fitting that from this point in time on we saw the rise in NFTs, which led to the ultimate form of mimetic desires taking over logic and reason for the traditional economic world. 

But, unlike in the world of DeFi, the world of NFTs lacked any real utility beyond ownership of art, which left a lot to be desired. This is where we started to see the paradigms shift once more, after the CyberKongz decided to introduce their BANANAs token and utilize it as a unit of measure to power the Kongz network by incubating two sub groups of children that have held thousands of dollars in value. 

For the first time ever, we now saw a digital economy developed through the tokenization of a digital image. Users who held a Genesis Kongz were able to earn bananas and through their accumulation could spend them, like a real world asset, to create new assets that held real world value inside and outside of their digital networks. 

The idea of humans spending money on digital assets that they cannot carry with them or physically possess may seem foreign, but there has long been a precedent that rationalizes this type of behavior. Whether it was buying skins in Fortnite, pokeballs in Pokemon Go, or just basic microtransactions in NBA 2k or MLB the Show that increase the abilities and performance of the digital renditions of yourself, humans have had zero problems with spending money on goods they could not hold or interact with beyond the screen or controller under their fingertips. 

The ability to now scale up this desire for digital ownership and use it as a way to create real life value financially has shown the disruptive nature of virtual worlds—ending the dependency of a single fiat currency that dominates our entire lives. For hundreds of years people could only earn dollars and be paid in dollars for their assets and labor. Now, through the emergence of crypto, DeFi and NFTs, we are seeing a shift in value creation that is changing the perspective people have for wealth creation. People can now leverage their happiness to own a product that represents themselves and use it to create income that they either redistribute within the NFTs economy, or swap for an asset of larger importance to them, like Ethereum. 

When we factor in the effects of mimetic desires, we see people rushing into the world of NFTs to replicate the success of their friends and feel the satisfaction that comes from confirmation bias and watching car crashes play out. 

The idea of a JPEG creating value and providing income to its holders may seem far fetched and unsustainable, but it's the biggest criticism of the arbitrary nature of fiat currencies which can have their supply manipulated while at the mercy of elite bankers and politicians who recklessly make choices that affect billions of people worldwide. 

This doesn't mean all yield bearing NFTs will be successful and become strong digital currencies that create long lasting value, but there are some metrics that are worth noting and learning about which display the inherent nature of this new paradigm shift that is capturing zoomers and millennials worldwide. 

The JPEG Standard

While fiat currencies are backed by weak ponzinomics and the threat of violence from oppressive military forces, tokens like VOLT and FISH are backed by digital art with a utility that enables them to act as a currency that powers the networks that they exist in. 

Some JPEGs have better tokenomics than others, which means that although the token technically poses no monetary value, the ones with better tokenomics than others have more utility and therefore more demand and are more likely to enter price discovery on the secondary market which in theory should drive up the price of the underlying NFT. 

The most popular yield bearing NFT project are the Genesis Kongz, they provided the blueprint that many projects have worked with and built off of, but since we have already discussed them on a few other occasions, it’s time to dig a little deeper to find other opportunities that are more affordable with better payback periods. 

Although the Cool Cats haven’t released any specific details about their token’s emissions rate and a clear roadmap of their utility, the team has leaked some ideas that can give us an early look into what the value could be long term for holders. 

The Cats are planning on releasing a game that will incorporate the creatures you will be able to incubate if you’re a Cat owner. Right now, all we know is that owners will get an egg and some MILK and be able to use those groceries to power the network. 

Emissions will be based on the different tier your cat is categorized in. If you own a Cool 1 you’ll earn the lowest amount of MILK with Classy and Wild 2 earning the most. If you think cats are cool, this is something you should keep in mind when searching the floor for opportunities. 

This potential tiered earning issuance can be annoying at the base layer for cat holders, but it does help the overall value of the erc20 token by creating an incentive to hold the coins you earn on the lower end of the spectrum and actually go out and buy more MILK on the secondary to get as much done economically as possible before the top tiers start saturating the NFT market with the emissions they get. 

Since not much has been released, we can only speculate on the potential digital economy here. What we do know is that the team is planning to incorporate pet supplies which cost between 1000 and 3000 coins to purchase. However, since they’ve mentioned gold and MILK, it’s possible that the MILK is the base layer that leads to some gold coins being created at a higher inflation with lesser real world economic utility. 

Everything remains to be seen with the cats, but what I like here is the fact that we’re seeing incentives created that encourage people to go out and buy more MILK on the secondary market in order to maximize their potential use cases in as little time as possible due to their emissions’ tiered ranking system. Good tokenomics don’t just reward people for holding, but encourage them to buy more tokens if they want to use the network and do things quicker than their issuance schedule allows. 

[Adding an addendum here: The Cool Cats just announced in their town hall today that cat owners will be able to rent out their Cool Pets to people so they can participate in quests and earn gold. The proceeds will be split amongst the owner and renter. This should lead to another layer of utility being built for the MILK token.]

When it comes to these digital economies, we want whatever the utility is to be much more costly than the daily emissions. Ideally, you want holders to have to wait 30-60 days to save up their token rewards before having enough money generated to use the network. By making things more expensive, and using time to your benefit economically, it draws people to the secondary market where supply and demand metrics can take over and create value for the entire project. 

One of the projects in particular that meets this criteria that I like and am an owner of is Bears Deluxe. At the moment, devs are working on upgrading the contract to improve composability and make everything in the roadmap possible, but there are plans for the migration to the Honey farm to begin on November 17, barring any delays.

So what is the Honey farm? 

This is Phase 2 of the Bears roadmap will be adding utility and yield to the underlying NFT, and creating a network and digital economy for holders to traverse. While Phase 1 focused primarily on the Alpha Channel in Discord, which is their own rendition of the prestigious alpha channel that the Kongz are known for, Phase 2 elevates the optionality of the project and starts to bring it into a more gamified light. This doesn’t mean that Phase 1 is worthless to holders, in fact, the Alpha Channel has major implications for traders and investors looking for a competitive advantage, while also encouraging holders to sweep the floor to reach the minimums needed to get exclusive access to the private honey hideouts (at least five bears are needed) and the gold club deluxe (at least ten bears are needed). 

In Phase 2, we will see the introduction of the HONEY token, and the creation of Honey Hives and the ability to mint Bees. 

This is where things get interesting and an economy starts to form. 

Bears generate one HONEY per day. In order to create a Honey Hive, Bears will need to spend 69 HONEY, which means it would take 69 days in order to get this done from a staking perspective. Once a Hive is created, Bears will have the ability to mint 3 Bees which will yield .13 HONEY a day per Bee. This means, in theory, a Bee should always be worth 13% of the value of a Bear if you have to mint each Bee individually, or 39% of the value of a Bear if you’re expected to batch mint the three bees at once. 

Since the act of creating hives leads to the creation of bees which leads to the creation of more HONEY for Bears holders, it means we have a potential economic flywheel that is beginning to spin here that can lead to some amazing tailwinds fundamentally. 

HONEY of course has no real world monetary value, BUT, due to its limited issuance and the expenses associated with creating hives and minting Bees, users who want to frontrun their peers may be willing to go out on the secondary market to buy HONEY from others and pay a premium price to do so. This in theory, could drive up the price of the token as demand for its utility outweighs the supply created each day. 

Phase 3 adds another economic layer to the mix which can, in theory, take the utility for the HONEY token and skyrocket its demand if there is enough network adoption. Starting in Q1 of 2022, barring any setbacks, we are expected to see the release of VX Bears, similar to VX Kongz, that will be used to peruse the Club Deluxe sandbox that is in development. This now takes the NFT from a static JPEG that happens to earn yield and turns it into a living entity within an exclusive metaverse. Holders will be able to mint these VX Bears for an undisclosed amount of Honey, and each VX Bear will be needed to engage with the Hungry Bear levels for their P2E game that is expected to be in development at some point in 2022. Adding VX Bears, requiring holders to mint them using HONEY and enabling a gaming mechanism that has play to earn features assigned to it adds two other economic layers to the mix, which takes this project from a dumb pixelized picture into a potential income generating money maker for its holders. 

All of this has to come to fruition of course, a lot can go wrong, and in theory developers could abandon the project and rug pull their holders, but the team is well vetted by the Kongz community and has been actively working throughout this time and frequently present in the Bears Deluxe Discord. If they execute, we could be looking at a mini-Kongz like project here that has the potential to be worth 10 ETH due to its economic implications and potentially elite tokenomics. 

The Kongz have their hands everywhere it seems, and another one of the projects their community loves and has spawned is Anonymice, which is one of the first fully onchain NFTs to offer yield through the CHEETH token. 

The tokenomics behind CHEETH is what draws me to this project, despite not owning any of their NFTs and not having plans to own any in the near future. Holders of Anonymice need to stake their NFTs in order to earn 1 CHEETH a day. 

As always, 1 CHEETH = 1 CHEETH but some of the value we see generated here comes from the demand on the secondary market which is the direct result of the low emissions and high costs to breed and speed up incubation. 

In order to breed your mice, holders need to own two Anonymice and pay 50 CHEETH to lock them up in the breeding contract. The interesting thing that really maximizes token holder value, however, comes from the time lock mechanism that is in place when breeding. 

Holders who are looking to breed are required to have the parents and babies locked up for seven days each (50,000 blocks). If holders want to expedite this process to maximize their investment opportunities, they can do so by paying 25 CHEETH to unlock the parents and another 25 CHEETH to unlock the babies so both can be bred and fully operational within one day, as opposed to seven. This allows holders to quickly get as many mice onchain as they want without having to deal with the 50,000 block requirement. 

By building this economy around the fact that only 1 CHEETH per mouse is created each day, and holders are limited to only having 10 mice in their staking wallet, and breeding costs 50 CHEETH + 7 days unless another 50 CHEETH is spent to cut the time down to one day, we are seeing a flywheel develop that incentivizes users, specifically new buyers, to go out on the secondary market to get as much CHEETH as they could possibly need in order to be the hyperactive participants that they want to be within the network. This does wonders for the token’s value and removes any potential inflationary events that can drain the swamp, destroy token value and as a result destroy the value of the underlying NFT. 

In essence, it’s the complete opposite of the StackedToads drama that affected many holders over the past few weeks. 

StackedToads quickly went from being an incredibly sought after project to a swamp of dead money that no one wanted to associate with. The project relied on a cool, gamified idea that holders should buy three toads to stack them and create yield that they would earn from staking their stacks of toads. This was actually a pretty brilliant move because it forced people to buy three toads at once to earn yield, which in part drove up the price of the NFT dude to the forced demand and scarcity that was taking place. 

But their downfall quickly came as a result of poor tokenomics and weak smart contract security. 

The Toads saw themselves rise from less than an ETH all the way up to 4+ ETH at one point before seeing a massive topping pattern that backtracked all the way to zero and culminated in its staking contract being exploited and their funds being drained. 

The main reason for their failure, and what needs to be learned from them, is the combination of high issuance, stakers were earning 50 STACK tokens a day and low utility, there wasn’t much use for the STACK tokens and any use wasn’t expensive enough to offset the insane inflation levels. 

As a result of this, the token value fluctuated, making the underlying NFT very attractive, therefore bottoming out and making the NFT unattractive. 

The key to making yield bearing NFTs work comes down entirely to issuance + utility. If an economy cannot be created where the token’s issuance is manageable and needs to be used, with the token burned upon usage to manage supply, the value of the token and as a result the NFT becomes unsustainable and not likely to have long lasting support from buyers. 

This is what draws me to projects like the Bears Deluxe, Anonymice and SupDucks. I own a Duck for a couple of reasons. First off, the art is vibrant, eye-catching and enjoyable. It draws people into the project by grabbing their attention and creating a lifestyle/streetwear brand that reflects the culture of the 90s and the swagger of the 2020s. Secondly, the founder has an illustrious career at his back, having spent time in the industry with Dapper Labs and Zynga, and being familiar with the different aspects of the crypto and gaming spaces. 

The Ducks are a cool project that possess a token that holders automatically receive without having to stake or do anything at all, aside from claiming their tokens of course. Holders receive 10 VOLT a day which can be used to purchase upgrades for KingFrogs to fuse three together and create a ThiccBoi which is needed in order to animate a Duck and create the opportunity to speak with a Jungle Duck God.  

That was a trippy sentence to write, but yeah, we’re in the metaverse now, so why the hell not. 

The upgrades range from 500-5,000 VOLT and since there are three upgrades that are needed to create a ThiccBoi, we’re seeing some economic incentive here to burn the VOLT token upon purchase. In addition, animated Frogs get the opportunity to receive special airdrops, which adds another economic layer to this mix that appeals to those who may not be able to afford three Frogs or even a Duck. 

Looking at the roadmap this far, it’s easy to see some utility developing here that creates an opportunity for income that can be deployed within the SupDucks economy. In the future we will probably see more use cases being added which would only further develop the VOLT token and give it more value therefore giving more value to the underlying NFTs in its network. 

There are other projects that are building networks and economies in similar ways, like Peaceful Groupies for instance, but to write about all of them would be an endless journey and leave me with little room to write about anything else. 

While I do own a Groupies NFT and am looking forward to their roadmap and plans for utility, I’m going to move on here and pivot to another type of PFP NFT economy which has been very interesting and could be potentially rewarding for holders. 

Derivative DAOs

A concept that quickly exploded and has gained a lot of attention and traction over the past few weeks is this idea of derivative DAOs. 

Out of nowhere we saw a bunch of DAOs like Mutant Cats pop up by minting NFTs and using the money from the mint, and the royalties from sales, to fund their treasury and buy up blue chip NFTs that are then fractionalized with a token issued to stakers of the original derivative NFTs.

The first real successful version of this idea was the Mutant Cats DAO which has evolved now into a project that is gamifying NFTs and bringing DeFi and art together through their treasury. 

Mutant Cats started as a derivative DAO for Cool Cats. Their early purchases were 10 cats that were locked up on Frational.Art and used to generate the FISH token for users who staked their Mutant Cats. Holders generate 10 FISH a day which is used to power the Mutant DAO which has now expanded into offering Mutant Gorillas that can be staked to earn SERUM which can be further used to expand the utility of the entire Mutant ecosystem. 

What makes this DAO the leader in particular is its execution in building up a strong treasury with consistent secondary sales, and the ability to efficiently market their brand through wise purchases of blue chip NFTs like Mutant Apes, Genesis CyberKongz and a plethora of other digital assets that hold tremendous value in the NFT community. There’s also been claims that the Mutants DAO has gamified their treasury by using it to stake OHM and create further yield. 

This idea of buying blue chips and spinning out a token through fractionalization is one that has become popular, but is also a potential value trap for people with mimetic desires and a lack of liquidity. Speculators who would like to own a Kong, Cat or Ape, but cannot afford one, find themselves drawn to derivative projects like this with hopes of benefitting from the association with the blue chip NFT and seeing their derivative project tracking the blue chip’s price. 

In theory, this could work as a rising tide lifts all ships, but if there isn’t a network of utility and a digital economy created, it doesn’t really matter what the derivative DAO owns since it isn’t utilizing its funds or assets in a way that creates value for holders. 

The reality is, buying blue chip NFTs should be viewed solely as a marketing gimmick and a way to backstop the value of the underlying erc20 token. The purchase and fractionalization of blue chip NFTs brings eyes to the project. Eyes to the project encourage sales. Sales lead to more royalties. More royalties lead to more purchases of blue chip NFTs. And more blue chip NFTs lead to a stronger treasury asset wise. But the best way to make this work sufficiently and for the long haul is if an economy is created around the original NFT and there is enough demand that captures eyes beyond the marketing gimmick. 

Projects like ZombieToadz bought CrypToadz but failed to catch on as a strong derivative DAO because of the lack of network effects and economy. The same issues plagued StackedToadz with no one caring or being excited about MiceOnToadz. This is what makes Mutant Cats attractive. Somehow, so far, they have found a way to start spinning the flywheel in their favor, evolving from a marketing ploy and into an actual network that has the potential to continue growing and therefore spinning up more opportunities to back its tokens with prestigious digital assets. 

Numerous projects have tried to execute on this philosophy, projects like CryptoZombiez and Halloween Bears, but they’ve failed to gain any real support beyond the initial wave of excitement and speculation. 

HeadDAO on the other hand seems to be following in a similar path as the Mutant Cats, with big purchases being made, but it remains to be seen how much they can grow their brand and create real, long lasting network effects. 

When it comes to looking for yield bearing NFTs, it’s easy to be attracted to these derivative DAOs considering that they capitalize on mimetic desires and hype to create success early on, but if they lack the principles laid out in the JPEG Standard, they aren’t likely to really carry forward any long lasting success, especially as their treasury finds themselves in possession of cultural artifacts that can quickly drop in popularity or suddenly become illiquid in a terrifying bear market if developer activity dries up. 

Users are best off looking to own the blue chips outright when affordable, and when desiring a derivatives project, focusing solely on the ones with large treasuries and ambitious roadmaps that are transparently being worked. It’s important to spend time in the Discords interacting with everyone involved and clearly following the activity of the DAO’s wallet to see how the treasury’s money is being used. 

At some point, I expect these DAOs to actually evolve and turn into little mini NFT centric hedge funds that accumulate pieces of history and distribute fractionalized ownership rights to its citizens, but it will only work if there is a reason for an erc20’s existence that extends beyond governance. 

Value needs to be created for holders and the easiest way to generate value is through composability. Devs need to build on top of their JPEGs by building on top of the purchases they have made. If this can be done, in combination with the continued rise of mimetic desires, derivative DAOs in theory could find themselves being worth anywhere from 30-50% of the value of the blue chip NFTs they are backed by. 

Pixel Pilled 

When it comes to NFTs, we find ourselves in the midst of an industry that is so nascent and undeveloped that every little thing we come across is a new frontier and a deeper journey into the unknown. 

But for some reason, we find ourselves diving deeper and deeper into this mire, with no hope of ever getting out, and instead, acknowledging that our journey revolves around us falling madly in love with what is ahead of us. 

NFTs aren’t for everyone, there are severe risks here. There is no precedent and there are no guarantees that JPEGs like Punks and Apes would be worth 30-100+ ETH forever. 

What we do know, however, is that life is shifting, paradigms are changing, and the world we knew is constantly being disrupted by computer code and mimetic desires transcending logic and reason, destroying everything we knew, and everything our parents’ generation stood for. 

It’s easy for people to look at JPEGs and automatically assume they are stupid, valueless and incredibly pointless, but the reality remains, value is derived from composability and mimetic desires. When we see the ability to build on top of something, and we see a cultural phenomenon grab hold and grip people into the need to fit in and be a part of the new IT crowd, we see a new form of value being created. 

For most people, they look at these NFTs as just a picture that doesn’t hold a deeper meaning, but the facts are, the best projects are evolving past the image in our avatars. NFTs are just logos for the apps of our future. The developers that are enabling the ability to click the JPEG and launch a network and economy behind it that we can engage with and build off of will be the most successful businesses in this industry. The ones that ignore composability and fail to maintain cultural significance, artistic integrity and prestige will fall to the wayside and be forgotten the same way as the fads of the 90s. 

Many of us have been pixel pilled, drawn into this world of PFPs and the future that lies ahead of us. As long as we are invested in projects with active developer teams that remain present and continue to build during the deepest depths of the worst potential bear market, we will see disruption, innovation and life changing paradigm shifts that create wealth for us all. 

There are no guarantees that any of this happens, none of this is financial advice by any means, but it's hard to not be pixel pilled and find yourself incredibly bullish and excited for what the world has in store for us, especially when we see the ability and potential to create income from JPEGs and use that income to power networks and stimulate digital economies. 

To some the metaverse lies ahead, to me, we’re already living in it, and we are watching ourselves evolve from the web 1 of the metaverse into the web 2 version brought forward by the introduction of NFTs and the many amazing things being created each day. 

Disruption is here, new opportunities are here, and it is up to us the holders, artists and developers to continue building and never looking back at the world we are trying so desperately to leave behind. 

To be honest, the last person I ever want to be in life is the one who constantly tries to pick tops and bottoms and hopes to be right. At some point, it’ll feel like exuberance, and I might think we need to see some profit taking to alleviate greed and excess, and at other times, it might feel like capitulation with selling pressure drying up and it might make sense to start hitting the ask and slamming what you like, but overall, to me, it’s just too much to try and make a point that something is going to tank or rocket anytime soon. Instead, I like to be ready to react to price action and have a logical timeline and set of actions set up to try and profit as much as possible while reducing risk and minimizing low conviction plays. 

Everyone knows that we’re about to be in the midst of the final push for this crypto cycle that’s going to take us to new levels we have never seen before. The $250,000 level for bitcoin is often mentioned, the $20,000 level for Ethereum is essentially programmed into our lizard brains, but overall, none of us really know anything other than making educated guesses based on past experiences and where we think things can go based on fractals, cycles and overall supply and demand metrics. 

Long term, we all think crypto can go much higher than it is today, short term, we’ll probably be right in thinking we hit those new highs, briefly touching down in Valhalla before resetting and fading back to the old all time high breakout points that we just cleared briefly. My goal here isn’t to get into those issues and ideas, about where we are going and what things will look like, but instead, I would like to focus on what we can do with our money during this final ride and where we can place it if and when volatility rears its head and we need to be more cautious and conservative moving forward. 

Yield Farming Stablecoins 

One of the best ways to create income in the world of crypto is through yield farming stablecoins. This can be anything from lending out stables on a centralized exchange, jumping into liquidity pools or depositing collateral into DeFi protocols. It's a great opportunity to beat the rate of inflation while decreasing your reliance on banks and leaving myself susceptible to the volatility of the crypto world. 

If I don’t see myself willing to take on any more risk due to price increases or fear of cycles ending, making the shift towards farming stablecoins could be a great way to increase the value of my money while I wait for opportunities to come my way. 

There are tons of different options, with rates that fluctuate due to supply and demand metrics, but these are some of the ideas I think are worth mentioning. I personally would like to spread my exposure across different exchanges and chains to avoid being too concentrated into one area and being susceptible to smart contract risks getting in the way of things (rug pulls and exploits are a thing that happen, I should never be using money I can’t afford to have stolen from me). 

If I’m ok with KYC or I want to keep some money handy to buy a bitcoin dip or another coin that’s harder to buy on a DEX, I could take advantage of using exchanges like FTX and Gemini to lend out my coins and receive some interest in return. This is great for creating some yield while accumulating or if I’m starting off with a small amount of money that I’m looking to grow as much as possible without trading. 

Centralized Exchange Lending

FTX currently gives 5-8% APY on most of its assets which include BTC, ETH and stables with up to $10,000 deposited getting the max rate. This is a solid alternative to leaving money in a bank account, but it’s not the purest form of going bankless by any means. FTX is able to distribute this yield by lending out the coins I deposit and rewarding me for the liquidity I’m providing. As a result, this does run the risk of running into solvency issues during a black swan event or having to wait for the money to be unlocked rather than used right away if I decided to redeem my deposit. So this should be considered when depositing money here. 

If I’m blocked from using FTX because of regional restrictions, I could take advantage of the rates available on Gemini Earn. The same concept applies here where Gemini is taking my deposits and lending them out elsewhere with potential redemption times not being immediate, but again, if I don’t mind those risks, considering that these financial products, and DeFi overall, isn’t FDIC insured, I could create some solid income while waiting to deploy my money elsewhere. 

Currently Gemini is paying 8.05% APY on GUSD deposits, which is there stablecoin that is back $1 for $1. If I wanted diversity, or, wanted to avoid the reliance on fiat, I could opt for more decentralized options like DAI and UST. 

DAI is currently paying out 7.55% APY, but it should be noted that 62% of, as of September 1st, is backed by USDC, so if I’m worried about fiat all of a sudden becoming rendered useless, it might not be the best alternative for me.

Instead, if I wanted pure decentralization that is completely removed from any fiat backing, I could opt for buying wUST on Gemini and lending it out for 6.88% APY. The rate is a bit lower, but if I was one of those people that wanted zero reliance on a fiat currency that is being diluted daily, this would be my only option available on Gemini. This does come with risks, however, in the off case that UST could lose its peg and see itself become worth less than $1. This may not be likely, as UST weathered the May swoon very well and avoided any serious catastrophe, but it is something to keep in mind, risk wise. 

If I didn’t care so much about the risks related to fiat’s dilution or depegging, depositing and lending out any of these (or all) would be phenomenal alternatives to keeping money in a bank account, which makes this a great option for someone looking to build a cash position while waiting for a drawdown, or a place to store profits that were taken while waiting to redeploy them lower. 

DeFi Deposits

If I wanted to just deposit money decentrally without engaging in any real farming or LPing, I could spread my money across a few different networks and protocols to earn some yield for the time being. 

It should be noted that if I’m planning on going cross chain in any way, it’s going to cost me a decent sum of money to bridge in and out of the Ethereum network, so one of the best ways to avoid this would be if I could buy native tokens on my centralized exchange and directly withdraw into their networks. This works for farming on Polygon, Solana and Avalanche, but doesn’t work as well if I’m looking to take advantage of interest rates on Fantom or LUNA as I would need to bridge to their mainnets since the erc20 versions are the only ones available on Coinbase and Gemini, or if I wanted to use any of the layer 2 protocols that Ethereum has available, like Optimism and Arbitrum. 

So, keeping that in mind, let’s start with identifying some solid opportunities in the Ethereum network since it is the most secure and decentralized. 

Right now DeFi 2.0 is incredibly popular, but that is a topic in of itself that I would rather talk about at length another time, instead, for now, I would like to focus on the easiest ways to understand how to utilize some of those protocols, in addition to the DeFi 1.0 projects that paved the way for them. The first one that I recently became intrigued by is Rari Capital. I can access Rari’s DeFi protocols through the App.Rari.Capital frontend. 

Rari, or RGT as its also known as thanks to its governance token, is currently giving 11.71% and 11.99% on USDC and DAI deposits, respectively. These numbers started higher at the beginning of the week and have come down heavily as more liquidity has entered the network, so it should be noted that I might not get the same rewards tomorrow that I see available today. But if I’m ok with that risk and I just want to let a position gain interest, this is one of the higher yields for stablecoins available. 

Another DeFi 2.0 option I love is Alchemix.fi which I’ve written about in the past. Alchemix enables depositors to unlock future yield through permissionless loans that cannot be liquidated. Users deposit their DAI or ETH into the contract which then utilizes Yearn vaults to earn interest in the meantime. Your coins are locked up for the agreed upon date determined by LTV ratios and current rates within Yearn vaults and users can either take their future yield and use it elsewhere as they wait for their coins to unlock, or buy their debt back at some point in the future if the unlock time is too long. At the moment a DAI loan for $1000 at max LTV would reward users with $500 of capital today while locking the deposited DAI until 2024. If I’m looking to just pull forward yield, or would like to raise some extra money for an expense or leverage a situation, this could be a reasonable way to handle things until markets become more favorable. 

There is also an Ethereum strategy here that I plan to get into later on in this article, but before I do that, I would like to mention some other useful protocols that build off of the ETH mainnet. 

If I’m ok with bridging some money into the Polygon network, I can earn 8.3% and 10.46% APYs on DAI and USDT using Aave’s Polygon market. This would also allow me to enter and exit more freely since gas costs are much cheaper in the case that I wanted to be a yield vampire and constantly search for the best opportunities. 

Bridging comes with some initial costs, you have to pay gas on the Ethereum side to bridge over to the other chain, and if you wanted to bridge back to Ethereum, you would have to pay another fee as well, so it is something that only makes sense when the money I could earn outweighs the costs for bridging. Typically, if I wanted to use DeFi protocols on other networks, I would want to use the native token and swap for whichever stables I wanted to deposit once I was on the mainnet, but if I don’t have access, I’m not really at liberty to do much else. For the sake of convenience here, we’ll talk about bridging to the Terra ecosystem and then utilize the native coins for Solana and Avalanche to get a look at what’s available on their networks. 

One of the best protocols to take advantage of here is Anchor Protocol on the Terra network. If I wanted to take advantage of their 19% interest rate, I would have to start off by going to bridge.terra.money and sending my wUST or wLUNA (both erc20 versions can be found on Gemini but you would want to do this from a web3 wallet) through the bridge and into the Terra network. To make this work, I’d need to download the Terra Station wallet. 

Once I bridged my coins over, I’d go to the AnchorProtocol.com frontend and launch the app. From here I have two choices, I could simply deposit the UST I transferred over, leaving a few coins free to pay for any gas fees, and begin earning 19% or I could bond my LUNA and borrow UST against it, which I would then deposit to earn that yield. If I was looking to cash out of a LUNA position in anticipation of a pull back, or simply looking to just earn some interest while waiting for better entries, this would be one project I’d look to take advantage of. 

If I wanted exposure to the Solana ecosystem, I could take the same approach, except using the native version of Solana that is on Coinbase, sending it to my Phantom wallet and swapping it for USDC inside of the wallet (make sure to leave a little behind for fees), depositing that money into Solend.fi and earning 12.90% interest. 

Liquidity Pools

While we’re off the ETH mainnet, we might as well use this time to talk about liquidity pools that pose some interesting opportunities. 

When it comes to hunting for yield through LPs there are a few things to consider, one is impermanent loss and the others are decreasing rates as liquidity pours into the pool and gas fees eat up one’s ability to hop around and search for the best yields available. Currently, the best opportunities to do this lie in other L1s and the side chains and roll ups available for Ethereum’s L2s. This doesn’t mean you can’t farm on the ETH mainnet, in fact we’ll touch on a few strategies by the end of this, but it’s harder to be a vampire sucking out yield from the best pools possible when you have to factor in gas costs. 

The Avalanche network has some decent options, especially if you don’t care about exclusively farming stables. PenguinFinance.org has some of the best ponzis out there right now, with users able to generate 260% APY in AVAX-TIME pools. If I didn’t care about the underlying assets and just wanted the rewards, this would probably one of the best options out there for me, considering that AVAX and TIME are two of the biggest leaders in this ecosystem with one being the network’s native token and the other emerging as the cult obsessed DeFi 2.0 name. The only downside here is token values decreasing while farming which would cost you fiat in the short run. This would probably serve best as a pool I wanted to run on the way up into the final push, rather than one I held through any exuberance and overall weakness in the sector. 

Aside from that, I could earn 20% yield in a DAI.e-USDC.e  pool which isn’t a bad alternative if I had some money natively on Avalanche or wanted long term exposure at some point. All I would have to do if I wasn’t a holder already would be buy AVAX on Coinbase, set up the Avalanche C-Chain on MetaMask (learn about the differences between C and X chains before playing around), send my tokens over and swap them for DAI and USDC, making sure of course that I left a little AVAX in my wallet to cover any gas costs. 

If I don’t like the PEFI token and prefer getting JOE for potential rewards, I could engage in the USDC.e-USDT.e farm on TraderJoeXYZ.com and earn 17.59% APY.  JOE is emerging as one of the leading DEXes on Avalanche so this could be a good alternative for me as a way to passively build a free stake in a potential blue chip DEX if TVL continues to rise in the Avalanche ecosystem. And if I don’t want Tether exposure because of the existential risks, I could swap out USDT for DAI and earn 15% interest instead which is still pretty good. 

And if I’m an AVAX-TIME junkie and just want to ape as much as possible into those pools, JOE is offering 193% APY on their version of the pool, which isn’t bad by any means for a bull market heading toward Valhalla. 

Moving off of Avalanche, we have some interesting opportunities on the Fantom network where the only downside lies in the fact that bridging costs in and out of the network could be expensive, costing 30-50 FTM to enter and exit the mainnet. Since Gemini only uses the erc20 version of the FTM token, users have to bridge over. Users would have to set up the FTM network the same way they set up the Avalanche one in MetaMask, using the unique RPC information, and once they are ready, they could head to Spookyswap.Finance where they could bridge and engage in farming all in one location. 

If I don’t care about impermanent loss, I could run a FTM-USDC and FTM-DAI pool and earn 88 and 89% APY while earning rewards in the BOO token which has held the $20-22 level fairly well lately. This is a good option for cheap farming with low risk IL wise since the FTM token isn’t crazy volatile and is trading in the $2-2.50 range currently. The worst case scenario is that as it rises I take in more stables, essentially locking in profits, and as it comes down during a bear market, I can build my position back up all while earning those BOO rewards which I could harvest at any time and sell for more stables or any other major erc20 asset on the FTM network for the low cost of less than .1 FTM. 

Moving onto the Solana network, we have some good opportunities to farm while earning some DeFi tokens that are sought after. I personally would avoid farming on networks where the rewarded token has an insanely unfair inflation schedule or unlock, unless I was planning on actively trading the native token awarded to me for more SOL or an asset of my choice. As a result, I’m going to start with ORCA.so which has a max supply of 100M coins. Although the coin is expected to see supply increase from 10m to 100m in the future, at least we’re not looking at something insanely inflationary like some of the alternatives. In addition, ORCA has gotten some institutional support and could be a token worth holding in theory if you like the idea of DeFi on Solana. 

Currently I can earn 13.8% on the USDT-USDC pool, but if I wanted to venture out or have a locking mechanism that slowly takes profits for me, I could engage in the mSOL or SOL - USDC pools and earn 23.7 or 32.6% APR, respectively. 

If I wanted the same effect for my Solana position, I could head over to Raydium.io and lock up stSOL-USDC and earn 53% APR while receiving rewards in wLDO. This works if I like what Lido DAO is doing with liquid staking, or if I just want to take my current position, try to lock in profits on the way up while maximizing my yield which I could harvest and use to swap for more Solana, stables or any other asset I desired more. And as long as I like Solana as a long term investment, I could leave it in here and let the interest pile up as long as the rewards are worthwhile and let my position slowly build back up as the price of Solana corrects down. 

Another option I have on Solana is to head over to Tulip.Garden. The benefit here is I would receive rewards in LP tokens instead of random governance tokens and can further compound my pool over time. The rates aren’t as great for stable pools here, the UST-USDC pool is only yielding 10% APY, but it’s a sufficient option if I just want to save my money and wait for other opportunities. 

I could also head over to SynapseProtocol.com and provide some liquidity for their bridging pools earning between 32 and 44% APY by being exposed to USDC and nUSD, which isn’t a bad move if I wanted to try and get exposure to BSC, Polygon, Fantom, Avalanche and Arbitrum with as little work as possible to get it done. 

I personally wouldn’t go crazy providing liquidity in the ETH mainnet as it could get expensive on the L1 to hop around and search for the best yields, but I would consider bonding some LP tokens with OlympusDAO to make some extra money that way if the market is seeing any weakness. 

Hedging My Bets

Earlier on I mentioned Alchemix as a viable option to pull forward future yield using DAI, but one of the other use cases currently is the ability to unlock future yield on Ethereum deposits. The only problem here is the fact that Yearn vaults for Ether offer very little yield and would in theory lead to a pay back time that lasts into the early 2030s. An option instead that works is the ability to use an Alchemix loan to create a synthetic short and hedge my position with little risk short term.

Alchemix loans are derived entirely in crypto. 1 ETH = 1 ETH regardless of the price in fiat. If I decide to deposit 5 ETH in theory at $20,000, I could receive 2.5 ETH in debt that will naturally pay itself off over the next decade. If I’m ok with the risks associated with doing this, I could just borrow the ETH and go about my day but if I don’t want to carry that smart contract risk for a decade and instead want to unlock my Ether at some point, I could buy back my debt.

Let me explain, if ETH goes to $20,000 and I think that’s the top and it’ll tank from there, I can deposit my 5 ETH, receive 2.5 alETH back, swap that for a stable coin like DAI, and pocket $50,000 in fiat value. If Ether goes down to $5,000 a coin, I can now in theory convert some of my DAI back to alETH and buy back my debt, unlocking my collateral and pocketing the fiat difference after profiting from a short that is nearly zero risk and not vulnerable to a liquidation if the market ripped higher instead.

This isn’t a guarantee, but, if I’m looking to actively trade ETH or get exposure on the short side to hedge my position, this is a great alternative to using perps or shorting futures and risk losing everything.

If I’m wrong in this scenario and I’m net bullish ETH for the decade, I could just leave everything alone and let my debt be paid back naturally through the Yearn vaults. The only risk here being that Yearn rates change or Yearn ceases to exist and I have to interact with the Alchemix smart contract to buy my debt back. In theory, this could be much higher than the current day value which would make everything for naught, so it really should only be a strategy if I’m actively trading or I’m solely looking to get some protection/downside exposure while staying as long as possible. If I’m right, I could potentially double my collateral after buying back my debt much lower, but if I’m wrong, I at least know my max pain in a black swan event years from now .

Nodes-as-a-Service

Another option that isn’t frequently mentioned is buying up STRONG tokens to start running STRONG nodes.

Without going into too much detail, I would need to buy 10 STRONG to run a node and earn .1 STRONG a day. Currently the price of STRONG is $905 which means the cost to do this is a little heavy, but thematically this makes a lot of sense as running a node is a necessity and the maintenance costs and hardware costs here are minimal. 

This would be a strategy that I’d consider during a bear market after everything came in and became more affordable, and it’s something I am keeping in mind and under close consideration for the near future. 

I won’t spend too much time talking about it today, but I do think it’s something that is worth researching moving forward and becoming aware of as the STRONG project is a very well run one that is offering tremendous opportunity and passive income for people who are able to time their entries around major downturns. 

Exit Plan

Right now it’s a fun journey with everyone making money regardless of what they’re doing, at some point, this cycle will end and opportunities will dry up and demand will slow down while we enter price discovery lower. 

It might be a brutal correction, it might not, I can’t determine the answers there, but what I could do is prepare for this situation by creating a plan for the ride up and the ride down to try and maximize my value and opportunities during times of intense selling pressure and crazy volatility. 

Using DeFi to weather the storm during a correction could be a very safe way to have money in the crypto ecosystem while waiting to deploy it at attractive levels. There are a lot of different options here, many that I didn’t even cover, but these were some of the projects that I thought were worth my time and what I might invest in at some point. I currently only have exposure to the two Fantom pools I mentioned, with my exposure being minimal at best in order to test out the network for research purposes. 

I would be cautious using DeFi if I have large sums of money that I cannot afford to lose, it’s better for me to use less money or avoid the opportunities if I can’t stomach smart contract risk, exploits and rug pulls. There are no guarantees in life and fewer in the world of crypto. Things can change very quickly and I shouldn’t take anything for granted. 

As always, this was not financial advice but a look at what I might be doing in the near future and the plan I am creating for myself moving forward. Please do what is best for you and do not view this as anything other than educational material and a journal entry that I am sharing with the world. 

Sup, 

I jumped into crypto for the first time during the beginning of the ICO bubble in 2017, a time when everything I touched, that released a white paper and had a plan for a mainnet, exploded in minutes of being listed on any single exchange. A time when I went on Bittrex, Binance and Kucoin and quickly doubled my money after reading about a project with no product or intrinsic value searching for a problem to solve. A time when everything went belly up a year later with developers abandoning projects and teams quickly converting their Ethereum into fiat like their lives depended on it while new investors, like me, lost everything and sold the lows for a 95% drawdown. 

It was the best of times, it was the worst of times. 

No, seriously, stupid cliches aside, it actually was. And it was those experiences that I encountered as a crypto normie at that time that I now am able to apply to NFTs as a crypto native years later. 

I made the mistake of jumping into NFTs too late and not spending time trying to figure out what the commotion was. It wasn’t until I started paying close attention to what DCInvestor and DeezeFi were doing on Twitter that I realized there was something brewing here that I needed to try and figure out. And eventually, after some poking around, I started to grasp what this space really is and how it is a direct representation of the mania I not only witnessed first hand in 2017, but fell victim to in 2018. 

The Hype

It started with Crypto Punks emerging out of nowhere to become the ultimate status symbol for rich people and crypto OGs. A dumb, ugly, pixelized image with no utility, purpose or reason rose up from being worth a couple of hundred bucks to all of a sudden being worth hundreds of thousands, and in some cases millions. 

This made no sense to me and left me with a confused feeling of FOMO that I couldn’t figure out or decipher. It drew me into needing to buy an NFT to just say I bought one, to have a piece of history and an involvement in this new gold rush that suddenly was making people rich. 

It led me to buy random JPEGs that didn’t appreciate in value and instead, were forgotten by the creators and any potential collectors who never knew they even existed amidst the slew of art pieces and profile pictures that flooded OpenSea on a daily basis. 

And so I forgot about them, the allure wore off, and I continued stacking other crypto assets and ignored them yet again, never thinking about them during the May crash when I started to dive deeper into alts again to broaden out my portfolio. 

Pudgy Penguins came along and I was even more confused by things. How could a stupid little penguin, adorable as he was, be worth thousands of dollars? It was just a picture on a screen, a digital file that I would have ownership over. Why would I want to spend two ether on him when he didn’t do anything for me and didn’t appeal to the overall art community? 

But this is when the wheels started spinning. Pudgy Penguins, alongside Punks, were some of the early collections that I started seeing on Twitter as people’s profile pictures. Crypto natives who I followed closely, people whose podcasts I listened to daily, started making their avatars into these JPEGs and switching them occasionally for their newest purchase. Cool Cats emerged, Steph Curry bought a Bored Ape, and the world kept spinning faster and faster while Genesis Kongz were generating six figures a year in income for its holders through the introduction of “Bananas. ”

No matter how much I tried to remove myself from this niche market that was exploding, I had no choice but to have my face shoved into it. My Twitter feed slowly became littered with non-crypto native people who were exploring these opportunities. Stock people who typically focused on just owning stocks and occasionally referenced bitcoin and ethereum were now changing their pictures to Lazy Lions and Deadfellaz. I was so lost and confused and couldn’t understand what was happening. 

Cool Cats were going for 10 ETH, BAYC were worth over 30 and released Mutant Apes that sold out immediately. Lazy Lions saw their floor double. Robotos beep booped and blinked their eyes on my timeline. SolPunks, ThugBirdz, Solarians, Piggies, the world was broadening out and growing more chaotic. Arf. Arf. I had no clue what was going on. 

So it hit me, I needed to figure this out and understand why everyone's profile picture (PFP) art was all of a sudden the biggest rage on the internet. 

And this is when I reached out to some people I respected and asked for understanding. 

A Cloud of Clarity

It took me a while to try and figure out what gave NFTs intrinsic value, and in searching for this understanding, I was able to learn more about the tech side of the art that is driving so much demand for block space. 

Creating art on Photoshop and uploading it into OpenSea isn’t anywhere near enough to draw in large swaths of demand and create Discord communities of thousands of people fawning over your collections. Of course there is serious demand for real artists to create digital renderings, paintings and drawings, but for every one of one that’s being sold for multiple ETH on OpenSea, there’s a generative project minting 10,000 NFTs that is raising millions of dollars for its creators. So the question becomes, why? What is so special about these profile pictures or generative art pieces? 

And this is when I started to understand why NFTs were becoming a big thing. 

NFTs are at the forefront of art and code crashing into each other and ushering in a new era of value creation. When a generative artwork is created, it starts off with its base form that the artist renders, it includes its random lists of attributes that could potentially exist, it includes its different layers and traits, and through a computer code, it is randomly generated and assembled, taking all of the traits, scrambling them together in order to create a unique final product. Some JPEGs possess traits that are more common than others, while some are incredibly rare in the combinations that are generated. 

This is no longer just art, but also an artist’s expression of computer code. 

But creating art through code isn’t necessarily enough to give NFTs the value they are possessing, the next layer here comes from the way the NFT is stored and preserved. 

While the blockchain preserves the rights to ownership for the JPEG you’re spending thousands on, very few files are actually small enough to be completely hosted and stored on chain. As a result, decentralized file storage protocols are in high demand here to preserve the immutability and legitimacy of the NFTs people are buying daily. This is what separates someone like me taking a random picture or drawing and listing it for 1 ETH vs a Robotos that’s listed at the same price. I could have created an absolute masterpiece, but if the file is stored on my harddrive or worse yet, Google Drive, there is no way to preserve the file’s existence, and by proxy, no way to assign any real value to it. 

The problem with storing an NFT anywhere but on a decentralized storage solution like Arweave or IPFS is that anyone can take the file, corrupt it, delete it, lose it, confiscate it and remove all of the legitimacy and value assigned to it. No one would be willing to spend thousands or millions on something that exists centralized on a computer somewhere in the middle of Idaho or in a cloud provider who is notorious for removing content that violates their TOS on a whim. 

So a lot of the value we see here at a quick glimpse is the result of code meeting art while being hosted on a decentralized server that no one can manipulate or corrupt. However, this now leads us to our next questions of, how do we know whether or not an NFT is actually worth anything, and do they actually create any value for their owners? 

The Dichotomy of Art

There are two types of NFTs currently that are making noise in the digital world: digital art and PFPs. Both are representative of two different think tanks and a direct representation of the objectivity that art holds, leaving its value truly in the eyes of the beholders and the associates that orbit that solar system. 

Digital art, which we’ll reference as anything that’s not a profile picture, has its value derived in similar ways as it is created in the traditional world. The only differences would be those projects that are generative or utilize artificial intelligence in any particular way. 

We see many projects here that have been collected and held in high regard like XCOPY’s, Ringers, and Fidenzas. SuperRare and Art Blocks Curated have become two of the more popular art studios that accept submissions, evaluate their merits and allow them to be minted and sold with the SuperRare or Art Blocks label attached to them, elevating a potentially unknown artist into a higher esteem. 

These pieces are typically utilizing technology in some capacity, whether it’s through the use of a generative algorithm, or benefitting from the digital medium to create paintings or animated GIFs. Collectors here are typically buying these pieces due to the potential history of the artist, the uniqueness of the NFT that is being created, the technology behind it, the SuperRare or Art Blocks label attached to it, or the beauty of the image. These NFTs are really the closest representation to what we are already used to in the traditional art world with the only difference being an evolution in consciousness and execution that is allowing new mediums to exist and benefit creators. 

Some might view these pieces of art as confusing or uninspiring, but the reality is there has been an attachment created and a niche market developed that is treating these pieces as new cultural artifacts that are worthy of attention, regard and prestige. 

When we look at these digital art pieces, it’s pretty easy to at least accept and understand the value attached to them, despite the fact that in theory you could right click save the image or GIF and possess “ownership” over the likeness, which is a flawed ideology and a lazy argument that we won’t really get into today for the sake of time. 

But when it comes to PFPs, especially those that are worth five to ten to thirty plus ETH, we see a completely different iteration of understanding. Instead of looking at those NFTs through traditional lenses, we need to look at them through the perspective of the metaverse and the impending digital economy that is developing. 

Valuable PFPs are the result of strong communities that come together to build a brand that is furthered along by the utility that developers (and/or the DAO) create. Nathan Roth, who you can follow on Twitter @NathanCRoth, has delivered some great points here about how to evaluate and assign value toward these types of NFTs. As he’s mentioned in the past, the community is directly responsible for the marketing of the project and indirectly responsible for building its branding. 

We see this responsibility passed along through community members making these NFTs their profile pictures on Twitter, ENS, and other social media and decentralized services. They further along the DAO or the project’s mission by promoting the legitimacy of the team virtually by engaging in discussions and providing friendly and helpful services to prospective members. They are the window into the souls of the founders who have provided them with the comfort and collectivity to create this bond. 

The interesting thing about PFPs vs digital art lies completely in the optionality and expansion beyond the image. The art here is the front door that brings people to the project, allowing them to take the interest and letting its value derive from the community’s willingness to spread awareness, build the brand and trust the roadmap and utility that the developers (and/or DAO) create. People may be drawn to the project because of what’s created, but they stay because of the people they interact with and the long term goals and ambitions laid out in its roadmap. 

Which brings us to a very interesting development in the world of NFTs which shows the power and ability we have to leverage art into something far greater and more impactful than ever possible in the physical world. 

The Gamification of Art

When I first started learning about NFTs, I thought these were just pictures and gifs that you collected, representing your interests, tastes and desires to stunt on others. I didn’t know much about the community aspect, and I certainly didn’t know anything about the utility and DeFi opportunities that were emerging. And this to me is where the real value and opportunity is present for NFTs. 

At its core an NFT is just an instrument of tokenized art that can be traded or fractionalized, however, due to the gamification of that art, we’ve recently discovered and unpacked the potential ability to take that art and leverage it yet again into a yield generating asset with an erc20 token that powers its network and digital economy. 

Let me explain using the most successful model that a lot of projects have based their approaches off of: Genesis CyberKongz. 

The Genesis Kongz are the only ones that can yield BANANAS which are an erc20 token. This token is then used to incubate and breed Baby Kongz and VX Kongz. 

The Baby Kongz have tremendous appeal in the crypto community as both a status symbol, and a resource of information surrounding its Wall Street Kongz Discord channel which is a private offering only available to Genesis and Baby Kongz owners. This is a bevy of information that a lot of people look at as invaluable alpha inside of the trading community. 

Now this is the part that becomes very interesting here. The Genesis Kongz are not available for less than 169 ether currently, which is at least half a million dollars today, and only 1,000 are minted and in circulation. In addition to their scarcity and the diamond hands of that community killing turnover and churn, the Genesis Kongz yield 10 BANANAS a day. This doesn’t seem like much of an allocation, to be completely honesty, but it’s incredibly valuable and yields roughly $800 a day for holders. 

Why?

Well, it’s really simple, in order to incubate and breed a Baby Kongz, Genesis owners need to burn 600 BANANAS to do so. But when you only yield 10 coins a day by holding, that gives you 60 days of waiting to create a new asset. Baby Kongz are currently going for 7.5 ETH at this moment, but have traded as high as 17 ETH this month alone. So in order to create one, you either have to wait 60 days to do so, or go out on the open market and acquire more BANANAS the way you would buy more ether. 

Since only 4,000 Baby Kongz will ever be created, it doesn’t necessarily make sense to wait two months to try your hand at minting one and then waiting another two months to do it again, especially when your peers are likely to go out and buy more BANANAS on the open market to do so first. This inadvertently drove the price of BANANAS up into the $80+ range and has created a sustainable network and economy that other NFT have been trying to replicate. 

In addition, through the introduction of the VX Kongz, which is a 3D version, we have a metaverse being built out for VX Kongz holders to gather and participate in the offerings available, which will further develop the tokenomics and utility of BANANAS and pushing or sustaining its value over the long term. 

Again, this is something else we are seeing other NFT projects adopt. 

The common thing evolving nowadays is a roadmap that offers utility and an erc20 token that creates yield for its holders. But of course, this is a dangerous territory as if it is done incorrectly, it could lead to a massive dilution in the underlying, which we will get into in a little, or, worse yet, the classification of a security which will lead to delistings from OpenSea and potential regulations from the SEC. 

In order for this gamification to work fully, devs need to make it clear that 1 token only equals 1 token and any monetary value that is assigned to it is strictly assigned by the community who are letting basic supply and demand metrics take hold. So in order for the yield to be worthwhile, we need there to be demand present and in order for there to be demand present, a strong utility needs to exist that creates a digital economy within this network that is sustainable over the long haul. A lack of sustainability will lead to excessive ebbing and flowing, and, just like in 2017, failed promises and lots of heartbreak. 

In a lot of ways, today’s NFT roadmaps are the White Papers of the 2017 ICO bubble and people should be very aware and cautious of the promises they are buying, which brings us to our next stage, which is the evaluation process. 

Evaluating PFP NFTs

When it comes to evaluating PFPs, it really is a layered approach that needs to be taken into consideration and tweaked frequently until one’s primer is perfected. Personally, I like to look at the artwork as the front door that brings people into the project while the utility and roadmap is what keeps them there and triggers sustainable growth. 

A lot of projects are trying to incorporate utility and tokens into their roadmaps, but if the value of the token isn’t sustainable, and the daily token issuance is inflationary for its utility, it lends itself vulnerable to attracting vampire farmers who will pump the price of the NFT and the value of the token, leading to an eventual rug pull when demand dries up, supply is liquidated and the utility isn’t sufficient to absorb the selling pressure. This will crash the price of the token, and as a result, the underlying NFT. We saw this play out exactly as I mentioned here with StackedToadz, the collapse being exasperated a little by an exploit that drained the staking contract. 

The key here is sustainability. Issuance needs to be scarce enough that it drives token demand on the secondary market which relies entirely on the utility being beneficial for holders to care enough to create demand for it. An example of this that I think will play out well over the long haul is the roadmap that Bears Deluxe has put together. As a full disclaimer, I own a Bear and a SupDuck (which I will talk about in a few).

Currently the Bears are upgrading their contract and are in the process of bringing their token, HONEY, and utility to market, but these are their plans thus far: holders of the NFT will yield one token per day; holders will need 69 tokens to mint a beehive which will give them the ability to mint three bees which will yield .13 tokens per day. 

Similar to the Kongz model, the issuance will be so low that it will take over two months for people to create a beehive and subsequently bees, which are also yield bearing assets. As a result, this should drive demand for the token and potentially push its price up enough to create a legitimate digital economy within the Bears network. 

Another project that takes a slightly different approach to build a digital economy around its network is SupDucks. The Ducks yield 10 VOLT tokens a day for its holders. Currently the VOLT doesn’t possess any utility, however, the roadmap does have the utility coming to market shortly. 

Holders will be able to take two KingFrogs (one was awarded per each SupDuck held at the time of the minting for free), upgrade each of them with one of the three products that can be purchased (with VOLT) which will allow the holder to turn them into a MegaToad that can be used to animate your SupDuck. Currently the economics haven’t been released here in regards to the costs of the upgrades and any costs to fuse and animate, but a digital economy is being created that is turning the VOLT token into a utility that should see demand on the secondary market for new holders who do not own enough VOLT to proceed with the operations. 

Aside from tokenomics and utility, projects need to be evaluated based on the history of its founders (artists and devs), their relationships, and the quality of their work. The SupDucks, which are one of my favorite projects from not just an art perspective, but roadmap, community and team as well, benefit from having a founder who has experience working at Dapper Labs and Zynga, who has also executed on its roadmap thus far, maintaining trust in the future offerings down the road. 

Prospective buyers should try and learn as much as possible about the team involved before buying the desired PFP NFT. Being in the Discord, asking questions and researching as much as possible, is something everyone should do before aping into an NFT which could be an illiquid product in all honesty. 

Being in the Discord brings us to our next evaluation metric: community. As mentioned earlier, the community is directly and indirectly responsible for the marketing of the project. A future holder should be interacting with the members, viewing their conversations and asking as many questions as possible to determine the goals and desires of each holder. Being inside of the SupDucks Discord during the most recent NFT sell off that saw their floor drop in half helped me feel very comfortable and bullish on their community, as every question was met with friendly enthusiasm and the overall vibe was one of positivity, calmness and genuine interest in the project, and not the price of its asset. 

On the contrary, being in the StackedToadz Discord when the NFT dropped from 4 to 2 to 1.5 ETH was an absolute dumpster fire with people criticizing each other for selling, people complaining about the price of the asset dropping, name calling, trolling and unprofessionalism while the team remained quiet on the sidelines. I had considered buying a StackedToad but because of this experience it prevented me from ever entering and avoiding the rug pull that saw its token go to zero and the price of the NFT drop to .1 ETH. 

In addition to just talking to the community, future holders should look into what is being built for the community to bond over. Some products are offering real life clubhouses, like BAYC, while others are building sandboxes and metaverses for people to congregate digitally with the 3d versions of their NFTs. This is something to consider as a good project should be as welcoming as possible for its members wanting long lasting bonds of friendship and community to exist. 

The final metric here that needs to be considered is the quality of the art work. Some people will say the art work doesn’t matter, but personally speaking, the art work is what drives me to the project and helps me remain happy and excited for its future. If I can’t put the NFT on my Apple Watch and showcase the artwork, it isn’t something that I can comfortably own with excitement. In addition, that artwork is the key to building the brand. It needs to be vibrant, distinguishable and unique. If it looks like a lazy copycat, it won’t create the cache needed to attract new users which will indirectly lead to the floor dropping, the utility weakening and the investment opportunities fading. 

The Evolution of Art and Money

NFTs are an evolutionary asset that will continue to grow and further develop its opportunities. At some point we will see NFTs broaden out beyond just art into the tokenization of real world assets. We will talk about that more in the near future, but at the moment, the use cases aren’t present and the opportunity is more of a one day, rather than a someday soon. 

There are a lot of scams and things to be concerned about when it comes to NFTs and people should only take money that they don’t need and dedicate it to these products. NFTs can be incredibly illiquid, especially during times of economic weakness and people should be aware of all of the risks assigned to them. 

People should consider developing a game plan and primer for themselves and their interests and goals before investing in NFTs. For some, the art is enough, others prefer the gamification aspect, while some just want to own whatever they like without ever worrying about utility and anything deeper. 

Always understand what you are getting into before it is too late. NFTs are a leveraged bet on the Ethereum and Solana ecosystems and should be viewed through that lens when determining whether or not someone wants to dedicate their crypto to a potential JPEG. 

Usually when people talk about crypto, they focus on the opportunities to make money, the volatility or the Ponzi schemes and rug pulls that they use to denigrate the entire sector. But crypto is one of the most amazing thought experiments in modern history. 

Some of the best thinkers and innovators have come together to create really awesome products that people have been able to leverage into crazy opportunities. I’ve spoken about yield farming in the past, which is a wild ride to take your money, compound it and build new opportunities with it, but the focus of this article is going to revolve around two phenomenons that are laying the groundwork and foundation to a revolutionary experience for NFTs and gaming, Loot and Rarity. 

Loot and Rarity are the result of two legendary developers deciding to start something special and give complete creative control to communities of people that share like minded interests and values. 

Loot

If you’ve been following NFTs and crypto pretty closely, you’ve probably heard of Loot by now. Plenty of other publications have talked about it and discussed the potential merits of its existence. 

Whereas projects are typically built top down, Loot functions as an open source idea for developers to build on top of from a bottom up perspective. Basically, Loot is just a series of words that can be used as items in a game. Those words have no attachment to anything, they don’t have an image or any front end of any sort linked to them, they are just words that represent a bigger idea that you, the developer, can interpret and have fun with. 

Developers have the ability to take those items and assign meaning to them, dictating their purpose for existence and utility and create a world around them in a way that is liberating and creatively encouraging. It’s a pretty wild thing to think about and a completely open source, community sourced concept that folks can endorse and embrace. 

People have wondered and discussed what the world can be surrounding Loot, whether it will be items that can be ported over to other networks or used in other games, or staked and loaned out to create other opportunities, and it’s a great example in the one thing that makes crypto this amazing, beautiful, land grabbing opportunity for the world of creators. 

Loot is a representation of the selflessness and community aspect that has led to crypto’s meteoric rise into mainstream culture. People are coming together to create and utilize this simple list of words to build an empire that others can fall in love with and occupy their time playing. 

This concept has also become pretty prevalent in a different realm, thanks to another legendary developer, Andre Cronje. 

Rarity

Rarity is an open sourced RPG game on the Fantom network that is being completely built out and developed by a random community of developers who are taking its shell and turning it into a Dungeon & Dragons like metaverse of sorts. 

Users can mint summoners, which are just characters, and assign them to various quests and dungeons once a day. This is a project that has been developing consistently thanks to the community of developers who are obsessed with having fun playing RPG games with new features and front ends being added each time the community gets together to accept a proposal as beneficial for the selfless vision that Cronje laid out. 

What once was just a place to press the adventure and dungeon button has now blossomed into a game that lets users assign names, craft items, weapons and armor, slay monsters, and participate in lending protocols. The game is ever evolving with new front ends being added with new features showing up throughout the week, keeping up with its Discord has honestly become a job in itself. 

At some point, users may be able to monetize their efforts by leveling up their summoners, farming crafting materials, creating items and providing value for other players, but it doesn’t seem like those who are in this community are here to make money or possess any selfish motives. Folks are looking for the best way to engage each other, create an open sourced RPG game that gives them a nostalgic throwback to their youth when they used to spend hours creating lore and fawning over their Dungeons & Dragons boards. 

Developers

The world of crypto has been made entirely by people who sit behind a computer, interacting with lines of code each day. Whether it’s the white hat trying to break smart contracts for bounties, the black hat who is looking to take advantage of exploits for selfish gain, or the anonymous devs looking to create an awesome project that benefits the world and allows people to live off the grid, crypto is the culmination of human nature meeting its most liberating form. 

Loot and Rarity may cease to exist in a few years, developers may lose interest and abandon both projects, but along the way, we will have seen communities of people come together and develop new friendships and bonds cultivated because of the internet, because of lines of code. 

Developers are the key to this industry, and quite frankly, they are the key to the next stage of human life as we head further and further into the metaverse, blending ourselves into our digital version. Crypto may seem like a cheap and easy way to make money for some, and a confusing scam for others, but the reality of it is really simple, crypto is a place for communities to develop, for people to come together because of developers utilizing their ability and power to create amazing opportunities for the world. 

This may not have been a thrilling article for you if you were looking for some financial alpha to take advantage of, but to me, these two projects embody everything I love about this industry and it was worth writing about from that regard. 

If you are lost or confused by anything, or just intrigued, jump down the rabbit hole and begin exploring the other side of crypto, the one beyond coins and JPEGs and see what is going on beneath the surface, where a series of hobbits living in Middle Earth are crafting the next chapter of our lives. 

RBLX

Going a little out of order here today, normally I try to keep things alphabetized but this was the first chart I really liked from my IPO growth screener so I might as well talk about it right now. I really like how this is setting up, recently breaking out of value on higher than average volume. I like the idea of buying weak opens here against 86 eventually targeting a move to 97. Under 86 and we have room to 82 and 78.

HOOD

Chart has been ugly but this one reminds me of some of the more recent issues where they pumped hard, sat back, did nothing and then perked and went running again. Like Coinbase for instance. I’d watch the 42 level here, if it can reclaim and close above we have room to 48.62 and 60 potentially.

S

Seeing some selling pressure here, above average selling volume, Idk when they have a lock up or anything like that, but this is one stock that WILL raise money every chance it gets because of how fast they are trying to grow while burning a ton of money. So, of course, be careful, but I do like this stock. I would be eying the dip to 56 for a potential bounce play.

U

If you’ve been following this Substack for a while, you would know that I’ve been calling this move perfectly and just like I expected, we faded off the top of value for the year and put in a bit of an ugly candle. I really like Unity long term and have no plans to trim my position. If I wanted to add or get exposure, I’d set a bid around 128.50 and anticipate a move back through 138.55. If we break through and confirm, we have 149 and 156 as upside targets. I think we’ll get there eventually, but I expect more selling first.

COIN

Crypto is hot at this moment, so it might gap up, but if it doesn’t, and sees more selling, I’d watch the 241 level for a bounce play.

DDOG

Love DataDog but it’s a crowded trade right now. Opportunity for a bounce play or potential DCA is here against 137. If that doesn’t hold, we can see 131 and 128 potentially.

ZI

Needs to reclaim 63.62, otherwise I see weakness here to 61.43 and 58.58. I like the idea of getting long in the 58s, at the bottom of value for the month.

FIGS

Dips against 41 could work if you like this one. Could eventually rotate back to 48.57. There’s a bit of a cult following developing here, like a LULU or PTON for healthcare workers, not sure if the thematic has a large enough TAM to rationalize a long term position, but the penetration is low so there is room for opportunity and growth despite the pie not being as big as we see normally with tech stocks.

NET

123.88 and 117.88 look like levels of interest to DCA into. It hasn’t really sold off much, but it looks due as it’s been too easy and overcrowded and needs to flush the weak hands.

PD

Surprsingly this has seen A LOT of selling volume coming in. Watching 43, if that doesn’t hold 41 and 39.84 are your levels of interest to DCA into.

ESTC

You’re in the bounce zone here against 159, if that fails, 154, 150.84 are your levels of interest to try some long if you like it.

ARKK

Rejected the break out over 125, now we retrace down to the bottom of value, 118.75 is probably a decent place to try for a bounce and rotation higher, eventually through value and to 136. But, if 118.75 doesn’t hold, 112s are on deck with potential room down to 105, 101.57.

ARKG

Failed at the top of value for the year, 88, again. This is heading to 79.62 it seems which might be an ok level of interest to get long against, but the reality is, you probably don’t need to be in here until we break out of value for the year and close above 88. Opportunity costs are building here short term.

SPY

Unless Apple changes course, 443, 438 are in play here.

GLBE

Lots of buying volume on Friday, so I’d watch the 67 level here. IF we can hold it and build off of it, a rotation toward 75 is in the cards.

OKTA

247-249 are your potential levels to play off of on the long side. Under 247 and we have 239 and 228 in play so I would be cautious under that level.

TWLO

Unless we reclaim and close above 353, we have room here to 313, 308.71. I wouldn’t mind an opportunity getting long down there, at the top of value for the year if it holds.

Crypto has obviously been a passion of ours and something we take very seriously. We grew from entering originally in hopes of getting rich, dealt with the tribulations that came with euphoria, greed and ignorance, found our purpose and discovered a love for innovation, disruption and technology. 

When I first came across Solana, it made sense to me that it had an opportunity to disrupt the crypto world as the potential Android to Ethereum’s iOS, but foolishly, and as a result of me not having a large enough Ether position heading into EIP-1559, I exited Solana to maximize my ETH position. At the time, I thought there would be plenty of room for opportunities and growth later on and that Solana wasn’t really in the growth cycle yet, but more of a speculative idea that could eventually blossom in the future. 

And initially I was happy with my decision, Ether was my main focus during the crash we just endured and I was able to accumulate the minimum that I felt I needed. DeFi started to rebound and NFTs began exploding again, with folks losing their mind over JPEGs. And then I started to notice something, Solana was creeping up alongside Ether and people began to talk about it on Twitter, people I normally didn’t see involved in crypto conversations, people who were predominantly stock investors whose foray into crypto stopped at the doors of bitcoin and ethereum all of a sudden were discussing NFTs on the Solana ecosystem. And this is when it started clicking in my head and I felt that oh shit panic moment that I suddenly messed up, was underinvested and quickly needed to right my wrongs. 

I initially wanted to slowly dollar cost average into a Solana position, we were in the low 70s and this was a new all time high, but I didn’t want to chase and get greedy by thinking this was going to go parabolic. I looked at the Solana chart, and noticed something interesting, every time it had broken out of a base previously, in its limited existence, it would see its price increasing for a total of three months before pausing or seeing any real selling pressure. We were in the first month of this break out of consolidation, so I decided to use a little more size than I initially wanted. We then proceeded to become a rocket ship and headed towards 100, with some volatility along the way that I took advantage of. 

Once we broke the 100 level, I remembered a rule I had discovered on Twitter that Jesse Livermore coined: when a stock breaks 100 for the first time, it usually keeps on running. So when Solana broke through 100, I added more, and as it pumped to 120 and 128, I added more, and when it sold off down to 113, I added more, knowing that, of course I could be wrong and it could retraced, but also knowing past trends and past adages, and decided to take my chances by sizing into the core sized position that I wanted. This allowed me to have exposure while Twitter started waking up to what Solana was and how it quickly could become a preferred platform for new users, users who felt they missed out on the rise of Ethereum, and users who simply weren’t willing to spends hundreds of dollars in gas to be able to engage in DeFi and NFTs. 

And now that Solana has broken out again, doubling my cost average and tripling from when I first started buying it back, Twitter has exploded with tons of new people taking positions and talking about the bullish use cases available for Solana. And this is great for crypto adoption and great for holders, but it leaves me feeling vulnerable and wanting to step away from the buy button and instead, enter into a holding period. And from this holding period, and the desire to continue saying and throughout this article multiple times, I decided that I would rather learn about Solana’s DeFi ecosystem and engage in yield farming stablecoins rather than buying any more tokens until we see a pull back to the 21 ema or a consolidation period. So this is where we will focus our attention this week. 

TVL

So the really crazy thing is when this first started gaining attention, Solana had barely any TVL, in fact, its DeFi network was pretty barren and filled with just some hardcore believers, lowkey liquidity miners, and probably some market makers affiliated with Alameda and SBF. But now we’re quickly seeing TVL grow with dominance heading toward Saber’s way, which we’ll talk about in a little bit. 

TVL is a bit of a flawed metric when it is measured in dollar value, as opposed to token value, so that should always be kept in mind, since we could see TVL explode if Solana went to $1,000 overnight. But, regardless, it’s worth eying to get a gauge for what is happening on the network. 

When this first started Solana had $1B in TVL, which was nothing compared to where Ethereum was at the time, which was near $85B. But very quickly, over the course of a couple of weeks, we’ve seen TVL grow from $1B to $3B to now $12B. And as people start to realize how much value is present on the Solana network, and how seamless and cheap it is to just bounce around between pools and protocols, that TVL will probably get close to $30B which, to me, for no real reason fundamentally, looks like fair value in comparison to Ethereum which should be over $100B by that time. 

So let’s get into some protocols that are worth talking about which are helping fuel this increase in TVL. Just be aware, that I have no clue how secure these smart contracts are and have not looked into their audits at all and I would only use money I am completely comfortable losing in its entirety as exploits or rug pulls are a real issue in DeFi. Do NOT invest more than you can lose. 

Saber.so

Saber is receiving a lot of pressure from Curve.Finance for forking their open source code without Curve’s permission, which, to me, just seems ridiculous since the code is entirely open source and Saber has taken a cool idea and attached it to a really attractive interface with an easy to use frontend that puts Curve to shame. 

Personally, I can’t figure out what the hell is going on on Curve, it’s the most visually unappealing thing I’ve seen on the internet since the first time someone showed me 2 Girls, 1 Cup. Ok, maybe that’s being harsh, but Curve honestly has a really bad user interface that is not attractive to newcomers and isn’t the most friendly place to be when wanting to yield farm and engage in the awesomeness of DeFi. 

Saber is pretty clear and easy to use, users make the swaps they need to have the equal amount of coins they need to deposit into the liquidity pools present, which they then could use the liquidity pool tokens generated to be staked in order to receive some yield. This sounds complicated and convoluted but it’s not. 

The USDT-USDC pool is currently paying out 5% APY, which isn’t a lot in theory, but pretty awesome for passive income generation. Users will need to first deposit the Solana version of USDT and USDC into the pool, an equal amount on each side, so let’s say 5 USDT and 5 USDC, when they deposit those into the pool, they’ll receive a token that they could deposit into the USDT-USDC farm to earn that 5% yield. This is great because you can quickly earn some value while having stablecoins locked up in the ecosystem while you wait for a pull back in your favorite coins. And since you’re on the Solana network, it’ll barely cost you any money to do this and there really isn’t any minimum that you should use to make this worthwhile. You could truly take $10 and make this an opportunity to earn 5% on that over the next year without spending more in gas than you’re actually investing. 

If the USDT-USDC isn’t lucrative enough for you, and you’re ok with the risks that could come technically from depegging, the UST-USDC pool is paying 15% which is a pretty awesome deal. And if you’re in the market for speculation and comfortable with the risks, you could venture out further into the realm of high risk possibilities and jump in the wBUSD-USDC pool or the wDAI-USDC pool and earn 29% and 27%, respectively.  

Just make sure you’re using the tokens from the Solana ecosystem and not trying to bridge over anything from Ethereum. The easiest way to do this would be to just transfer SOL to your wallet and swap it for wDAI or USDC, etc. on Raydium.io or Saber.so. 

Saber has other pairs that you can take advantage of, depending on your risk levels and desires, like stSOL-SOL or wFTT-FTT.

Mercurial.Finance

So the one thing I would say is, it’s probably for the best to have a bunch of different protocols that you work with in order to protect yourself from exploits, rug pulls, security breaches, etc. This could be annoying and cumbersome, as you might need to write down everything you do to efficiently keep track of it, but it’s the best thing to do to maximize your yield and maintain a decent security presence. 

Mercurial.Finance has a cool 3 pool that’s paying a pretty decent yield that I would consider taking advantage of. You can earn 26.7% right now by locking up USDT, USDC and wUST in a 3 pool on Mercurial. Since you have three stable coins here, you really don’t need to worry about impermanent loss and your risks are minimal, as the only way to lose money would be an exploit in the smart contract, a depegging issue for UST or the world discovering that Tether is a scam and tanking its value. 

Solend.Fi

Solend doesn’t have the cache or TVL presence that some of these other protocols currently have, but it does $88.5M in supply so far. 

You aren’t getting double or triple digit APYs here, but you can generate some good yield through depositing USDC for 5% and 7.45% by supplying USDT. 

Just be aware I’m not sure how secure this protocol is and I would highly recommend learning more about it and diving into their bug bounty program before investing any sums of money that I wouldn’t want to lose. 

SolFarm.io

Solfarm is a pretty cool protocol that’s basically a yield aggregator very similar to Yearn.Finance with a cleaner user interface and the ability to engage in leveraged farming which I won’t get into since I’m not crazy about leverage to be completely honest. 

Regardless, SolFarm has some pretty sick APYs to take advantage of currently. Again, I don’t know anything about their security, but I do think the protocol is very interesting and I plan on diving into it more as a potential investor eventually in their token, TULIP, which has a max supply of 10m on CoinGecko (need to confirm that) and is a bit of meme with the name and the whole idea that crypto is the same bubble as the Tulip bubble was in the old days. 

Anyway, back to the yield farming aspect of SolFarm, users can generate an insane APY of 151% in the UST-USDC LP. In addition, they can still earn an insane rate by depositing into the DAI-USDC LP which is handing out a 27% AP. If users don’t care about impermanent loss, there’s some triple figure APYs in the 150% range that can take advantage of by supplying ATLAS and USDC, and some other coins. But, of course, the math needs to be done on whether or not that makes any sense to people. 

I personally would rather just take advantage of yield farming stablecoins since my goal is to build a cash position while waiting to deploy it in my favorite ideas during weakness.

Humble Farmer

I currently don’t have any positions in any of these products, but I do think I’m going to be depositing some money into them in the near future if Solana continues going higher. I personally can’t rationalize averaging up right now, even though I’m super bullish on the space, and I would rather wait to see a base being built or a pull back to the 21 ema to increase my allocation. 

So in the time being, I will be watching these farming strategies and will be looking to deploy some small amounts of cash into each of them. The goal here will be to create a crypto presence while becoming bankless to a certain extent since banks suck and do nothing but take advantage of their users. 

There are plenty of risks here in crypto, DeFi is awesome, but does leave you susceptible to phishing attacks, smart contract risks, security exploits and rug pulls so you should keep that in mind when engaging in these yield farming strategies. 

Over time, these APYs will also come down as more money is deposited into the contracts, so take that for what it is and be prepared to see those numbers decrease over time, leaving you vulnerable to looking for other opportunities elsewhere to get the yield you want to generate. 

Just remember, never invest more than you can afford to lose and do not view this as financial advice, this is just me putting my thoughts out there and me creating a game plan for where I personally want to try and park some money while I wait for the Solana ecosystem to cool down. 

ARKK

Growth looks to be at an inflection point here, if we can see ARKK close above 125.50 that would set us up for a rotation back toward 136 and 147. I would keep an eye on this pivot and use it as a guide. If we reject 125.50, 121 and 118.75 are in play. Below 118 and 112, 104 are your downside targets.

ARKG

Have a feeling that this time is the time it’ll get going and sustain an up trend. Over 88.31 and we have room to 91, 99.44 and 107.69. If I’m trading momentum, I’m only interested long here over the 88.31 pivot. Let it break out of value for the year and confirm it, no reason to be a hero in the chop zone.

APPS

Monster volume the past few sessions, seeing some new institutional investors finally allowed to be involved here which could send this back toward its highs. I like dips here against 62 targeting 70, 81, 86. If we lose 62, a fade back to 52 and 48 could be in play so be aware.

CFLT

This is one of the names that I’ve followed loosely and do like long term, but not enough to create room for a position. Having said that, the chart looks good here and it’s probably due for an IPO base breakout. Liking dips against 57.50 for 65+. Under there and 53 and 47 are in play so be aware.

CHWY

Bounce play here at 73.86 if it flushes off the open tomorrow. I don’t think this one is going to rebound quickly, so any strength probably gets sold. I’d look at the Peloton chart as a potential comp here.

COIN

Dips against 269 could work if you see any volatility in crypto. I’m not sure if you’ll get that weakness this week, odds are we probably see a $5 gap up tomorrow morning with bitcoin over 52k again. If crypto keeps its bid, 297.50, 311, 340 are your upside targets. Under 269 and 241 is in play.

DOCU

Over 311 and 321 is in play. Any dips to 303 that hold could be buyable. Good volume here, should see a new leg higher being made.

DLO

Looking a little toppy and over extended short term. If 70 continues to fail, there’s room here to 64.50 and 50. I’ve got an alert set in case we see some selling.

GDRX

Entering into price discovery. Dips against 40 could work for 45, 54. Reminds me of Unity so you can look at that chart as a comp. Under 40 and I wouldn’t be interested long. Has downside risk to 35s.

MDB

Great company, not much to do here, but watch 490 if you want to try some long here. Love the volume that we saw.

NET

Needs to clear 132 to keep going and push toward 150.

SHOP

Liking this for a continuation. If we can hold above value here, 1619 is in play and a likely target.

SQ

Watching a shakeout to 259 before seeing this push and break through 276.50. Should catch a 300 magnet once it breaks out of value here.

TSLA

773 is in play if 730 continues to hold.

U

Starting to push the top of value for the year. A potential pull back off of 138 would be healthy and make sense. If it can clear that level with volume, 149 and 156 are likely targets.

It’s easy for us to sit and think that the best technology will always win, but even though that’s common sense, it couldn’t be the furthest thing from the truth. 

If the only thing people cared about was great technology, companies like Apple wouldn’t wield the immense power they have over individuals. Let’s be honest, the iPhone is an amazing innovation, and quite frankly, the only phone that should exist, but it’s nowhere near the best piece of technology on the market. Every year we see phones from Google and Samsung with better internals, better cameras, better raw power, but for some reason, despite offering better features to their users, they fail to capture an audience and drum up the kind of sensational demand associated with an iPhone release. 

We see this even spread out into the world of software with companies like Fastly that sport amazing, cutting edge technology that is superior to their peers, but consistently failing to gain traction, incapable of stealing market share and downright unlikely to ever expand their presence beyond their core group of customers. 

So why is that the case? Why does the iPhone dominate mobile, why does Cloudflare eviscerate Fastly on the sale’s floor? We’ll get into those answers in a little bit, but until then, I want to talk about how these ideas connect to crypto, primarily whether or not Ethereum’s scaling solutions will be the penultimate winners, or if there’s a better competitor that provides the iPhone and Cloudflare moments for crypto. 

Speed and Scalability

Two of the biggest problems plaguing crypto today are gas fees and transactions per second. For crypto to become a true revolutionary force, it would have to increase its throughput to be equal to or better than the current infrastructure of the TradFI/Web 2 world. 

When we look at payment processors like Visa or MasterCard, we see the networks having throughputs over 1700 TPS with theoretical opportunities to be scaled up to 56,000 TPS. When we look at Ethereum, however, we are currently operating, on mainnet, at a much lower frequency, 30 TPS. 

In normal circumstances, when block space isn’t being highly sought after and congested from liquidity mining programs or NFT drops, 30 TPS operates in an efficient way to get our points across. But with Ether becoming the settlement layer for the internet and all digital assets, we see the need to ramp things up to the next level in order to accommodate for the rising demand and adoption. 

Scaling solutions have been adopted to address these issues, the three most popular options being Polygon, Optimism and Arbitrum. 

Polygon operates as a side chain, so it’s technically not a layer two scaling solution, since it’s secured by the Polygon network and utilizes the MATIC token for gas. This isn’t a big deal to most people, in fact Polygon has emerged as the leading sidechain over its competitors, but it is worth noting that it doesn’t utilize the Ether network for security. Despite that, Polygon has gained traction because of its ability to process 6,500 TPS with gas fees that are pennies in comparison to what is being delivered on the Ether mainnet. 

Optimism and Arbitrum are both pure layer two scaling solutions which means they utilize the Ether network’s security moat which is a big deal for people who plan to be transacting in major DeFi protocols. When it comes to the regular user who is just looking to LP or yield farm a few bucks, being secured by Polygon or Ether seems negligible, but for the institutions and whales who are moving markets, security is their biggest and most desired priority. 

And while Optimism and Arbitrum are secured by mainnet, which can give them a bit of a moat and edge over competitors, especially when you consider they can process 4,500 TPS, they aren’t necessarily the perfect plug and play protocols for the average user. 

Crossing the Bridge

The biggest issue plaguing crypto and Ethereum in general today is the need to provide a seamless user interface that regular old normal people can effortlessly interact with. 

Think about your parents or your friends who aren’t down this rabbit hole and think buying bitcoin on Robinhood or PayPal is the right move, they’re not familiar with owning a Web 3 wallet or engaging in any type of self custody. Most of their money sits in a centralized exchange that probably doesn’t even have two factor authentication turned on, and if they even do, it’s probably SMS verification which is probably less secure than not even having any 2FA at all. 

These people are obviously not the ones who are currently participating in liquidity mining programs, trading on DEXes, yield farming or even buying NFTs (but they’ve heard of them and are interested, that’s for sure). 

But. 

They’re the ones who will be joining in the craze at the end of this cycle and during the next one. They’re the ones who will eventually take crypto to a $5-10T market cap with over 3-4 billion active users. They’re the ones that technology should be being created for, not the crypto punks, current degens and apes, or veterans from 2017 and earlier. 

And the biggest prohibiting factor from getting these people fully on board, and able to interact with DeFi, NFTs, play to earn gaming, and much much more, is ease of use and user interface. 

This is where the Apple and Cloudflare dynamic begins to steep in. 

In order to use Polygon, Optimism, Arbitrum or any other scaling solution or side chain, BSC and Avalanche included, users need to take a few steps to get there. 

The first thing they need to do, before they even think of crossing the bridge, is to add the new network to their Web 3 wallet. When you use MetaMask, you’re pre-programmed with the Ethereum mainnet and some testnets. But if you wanted to take advantage of the three figure APR’s on Polygon, let’s say, you can’t do it from the default settings. Instead, you need to either go into the settings of your MetaMask wallet and manually input the new network settings, or visit the Matic Network’s official website and have them install the network for you. This leaves you vulnerable to a couple of things, phishing and mistakes. 

Although it’s fairly easy to do this, you won’t be able to do it on your own without being told how to do it. This means you’ll need to ask questions in the project’s Telegram or Discord, and hope to not get scammed, read the blog and Medium posts from the project, or watch a tutorial on YouTube. But throughout all of this process, if you’re a newcomer, you are very susceptible to innocently being taken advantage of. 

Every time I ask a question in a project’s Telegram, I’m immediately DM’d by scammers who are trying to prey on me. I know to block them and move on, but if you’re new to this, and don’t have a personal friend or family member to guide you, you’re in a very vulnerable place. 

So this is issue number one that I have with the current way speed and scalability is being addressed. 

Issue number two comes from needing to cross the bridge. And while I get the necessity here, and the technology behind it, and how it works, it is a little annoying that in order to hop along networks to get the best APR’s or fees, I have to constantly bridge my assets and be susceptible to withdrawal waiting periods. 

There are some projects in development to address this issue and simplify it, like the Hop Protocol, but we’re still very early and not at that point yet where any asset can easily be hopped along any chain. Right now all we can move through Hop is USDC, USDT and MATIC through mainnet, Polygon, Optimism and xDAI. This is a good place to start, but it’s nowhere near where we need to be to prepare ourselves for the impending influx of users and the tsunami of adoption bearing down on us. 

This is where I can see Solana having an opportunity thanks to the primer I have associated with Apple and Cloudflare, if, of course, they build on where they are today and fulfill my vision. 

The Winning Advantage

There are a few reasons why Apple and Cloudflare dominate their peers despite not dominating them technologically:

Ease of Use - iOS is one of the smoothest operating systems around, and using an Android phone has always left me confused and unsure of what to do next in order to use any of the apps I wanted to peruse. In regards to Cloudflare, it’s been known to be one of the easiest pieces of software to implement whereas Fastly requires more time to learn and understand the intricacies of its products. 

Community - User satisfaction often dictates the winners in these technological arms races. There’s a reason the Zune never caught on, and it had nothing to do with pricing or specs. If always comes down to the community, if there is a group of people who like a product, they are more likely to tell others about it, drawing in new people and essentially creating a pyramid-like chain of events that builds out an ecosystem. 

Developers - Technology catches on and thrives because of the developers that are drawn to a network. If devs enjoy using the product, have fun creating and find themselves liberated to innovate as they please, they will strengthen their presence and as a result improve the ecosystem being created. 

User Interface - Products need to be pretty, appealing and friendly to the eye. As humans, we have a tendency to shut down or lose interest when we aren’t captured visually by something. Looking at the wrong UI can pronounce a technology dead on arrival despite its merits behind the scenes. 

Lindy Effects - The longer a technology exists, the more likely it is to be around in the future. This makes sense completely since most startups fail early on and if they can make it to the IPO stage and produce two or three years of solid earnings reports, they’re more likely to turn into a long lasting investment. Same can be applied to the products we use. The more we see an iPhone, the more likely we are to continue seeing iPhones. 

So where does this leave Solana?

Solana’s Potential

Solana operates as a competing layer one blockchain that some people think of and look at as an Ethereum killer due to its immediate settlement, capable of 55,000 TPS on its testnet, and near zero fees. 

But referring to Solana as an ETH killer is a bit of an injustice and unfair claim to make, considering that Ethereum is the top dog in this race, and unlikely to be dethroned due to its developer and security moats. 

Instead, the real appeal to Solana comes from its advantage in comparison to other competing L1’s and Ethereum’s scaling solutions. 

So what makes Solana the most interesting alternative and potential scaling solution for Ether?

Its speeds and low fees can position Solana to become the leading network for NFTs, play to earn gaming (GameFi), and other low security use cases like social media or messaging. Since Solana does carry some centralization risks in theory, due to the exuberant costs associated with running a node, it does face some headwinds with winning over DeFi protocols and matching Ethereum’s TVL which is closing in on $100B. 

However, with NFTs already existing on their platform, and becoming sought after, despite the quality of project being inferior currently, we are seeing adoption and execution which should continue to gain traction as projects look for alternatives to the Ethereum network to either supplement their current releases, or maximize their potential yield. 

We do have some Ethereum scaling solutions geared toward NFTs like Immutable, but we haven’t seen a working product yet with users acting upon it, so in theory, Solana should have an advantage here. 

And it’s biggest advantage, which derives from memetic desires and the ability to attract new users, is Solana’s simplicity and beautiful user interface. Users don’t need a bridge to enter into the Solana network if they have access to a Coinbase account. They can very easily purchase SOL, download the Phantom app extension on their computer (mobile app is in production and will eventually on ramp millions of new users), send it there in seconds and begin shopping for NFTs on Solanart.io or DigitalEyes.Market and begin their journey, allowing them to do what everyone else is doing on Ethereum at far lower costs. 

Memetic desire is one of the key tailwinds for the Solana network as new users will want to be involved in the next Ethereum and take advantage of the cheaper option since gas fees are dreadful murder currently. 

Solana, of course, needs to execute and attract high quality creators to their ecosystem. Copying and pasting everything that’s done first on ETH isn’t going to provide much staying power, and this is where community and developers come into play. 

Solana has seen its community increase lately due to the rise of NFTs on its platform, and the ease of use associated with the network. In order to get these kinds of speeds and fees on Ethereum, users have to go through setting up new networks, bridging their tokens, and avoiding being scammed. With Solana, they just need their wallet address and can get going on their journey. 

Being as someone that’s only used Ether in the past and finally getting involved in the Solana ecosystem, it’s really impressed me and made me want to become a more active community member since I can very quickly, efficiently and cheaply start bouncing between liquidity pools and DeFi protocols without having to burn a bunch of money and barely break even. I can even make this entire experience worthwhile with small sums of money, which, yet again, appeals to new users. 

Solana has also received rave reviews from developers due to the power and freedom they have by not being hamstrung by Solidity. As more developers flock to the ecosystem, more creative products will be developed and more opportunities will grow for users. This will flesh out Solana’s potential as a scaling solution or side chain for Ethereum. 

Solana hasn’t created Lundy Effects yet, it’s far too young, but at its current stage in existence, it’s infinitely farther along than Ether was in 2017. This is allowing the network to be set up to create Lindy Effects down the road as it has working products, growing adoption, and strong institutional supporters. 

I do firmly believe that in the future, Solana will be looked at as an alternative to Ethereum’s scaling solutions because of the ease of use which will bring together all of the other factors that take a great piece of technology and make it a clear cut winner. While scaling solutions like Arbitrum and Optimism seem to be great pieces of tech in their own right, their communities are just extensions of the Ethereum network, and it’s developers are just devs that were already on the network who are now upgrading their infrastructure to reflect the new opportunities, or developing new products with the best speeds and security in mind. 

At some point you will see tens to hundreds of different scaling solutions which will indirectly water down the Ethereum network and wind up confusing new users more than supporting them. Unless a network aggregator enters the fray, or wallets seamlessly incorporate a new technology to shift you through different networks without you knowing it, you’re just going to see more headaches and issues rise up in the long run than have problems solved. 

And what will the purpose for these other chains even be when we see Solana bring it’s EVM compatibility to mainnet? With Neon Lab’s EVM currently in testnet, we have the foundation of complete throughput domination in development. Once the EVM goes live, we will see Ether's biggest protocols, like Uniswap, Aave, SushiSwap, etc. enter the Solana network and solidify its moat as the best potential side chain and scaling solution while still providing an easy user experience that is enjoyable and rich in community spirit.  

ABNB

AirBnB found some life last week, this one might finally be free to get going again. I’d be eying the 152 level on any weakness, if that can hold and chop around for a bit above there, we have a really good chance to see this one rotate back to the top of value for the year at the 168 level. That could be a level of interest for sellers and trigger a pull back, but if we power through it, 175 and 190 are possible targets.

AFRM

We’re obviously much higher than we closed on Friday, so keep that in mind, but I’m posting this chart just to show where we can head if this continues to push higher. We could have room to 97.70 and 108, and I would watch any weak opens that maybe trap shorts and trigger a nice move higher. I personally think this move was a little exaggerated, but price is what pays so follow the action instead of trying to get in front of it.

ASAN

I ignored this one in the 30s because of valuation, but no one cares and insider buying is on Michael Saylor levels of aggressive. I’d keep an eye on the 78.45 pivot, this one might be ready to get going for another leg higher.

BABA

I want to see this make a higher low here and come nowhere near those lows. I would be cautious buying on weakness at this point and instead, I’d watch the 162 level for a potential reclaim and close above. This would trigger the potential for a rotation back to 173 which acted as resistance like I’ve mentioned in the past. If we get this higher low, I think we clear 173 and start an up trend again, but of course who knows. I would use Friday’s lows as a stop if trying anything on that potential 162 reclaim.

BMBL

This could be a nice quiet swing you put on and ignore for a while. Needs to clear the venom line at 56.54, if it does we have room to 61, and 75. Needs to hold 51 on any weakness.

DDOG

Watching the 136 pivot here for the next leg up. Probably sees 150 at some point if the market doesn’t reverse.

DIS

This is another one to tuck away and ignore for a while once it cements itself above 180. We have room to 189.50, 195 and 203.40 once we get going again.

DOCN

Venom line at 61 so this might pull back or pause, but if it gets through we can see a nice run to 65-70 fairly quickly. Needs to hold 58 on any pull backs to maintain this recent momentum.

DOCU

If this can hold 301 there’s a decent chance we see a rotation up to 320 at some point. Earnings are on Thursday, though, so anything is possible.

FVRR

If we can continue momentum and clear 182 a gap fill comes into play. Eying a reclaim of 182 and a push to 203 before seeing some short term weakness.

LCID

Watching 19.48 for a bounce play.

NET

Never getting the pull back I wanted, so be it. 123 needs to hold otherwise 117 can be in play, if this can clear 126 it’s going to be a nice runner and start that next leg higher. Probably sees 150 in a flash if the market doesn’t turn.

NTLA

Needs to clear 167, if it does, this has room to 184. If there’s any weakness, I’d watch 147 for a bounce.

PATH

This has that look if it can clear 66, has room to 69.66, 74.50, 87.50.

PYPL

This might get going again if it can clear 280. Seeing room to 285, 290.

ROKU

Needs to clear 375, if it does, it can quickly get back toward 396. If sees any weakness, I’d be cautious and eye 342 for a bounce.

SHOP

Once this clear 1560, we have 1661 on the horizon.

TTD

This looks ready for the next leg higher if it can reclaim and close above 81.50, seeing room to 86 and 93.

Depending on who you talk to, crypto is either the greatest gift to humanity or the biggest scam that’s ever existed. Typically these comments are the result of over-exuberance, a love for technology and financial freedom, and an inability to understand technology, trends, and human emotions. 

No one in the world should still be looking at crypto as a bubble or a scam but yet we’re still at that point in the adoption cycle despite institutions entering the scene and actual products being used by people on a daily basis instead of vaporware, whitepapers and dreams of a rosy future dominating the headlines. So the question remains why? Why are people on one side of the coin so in love with crypto while others are so vehemently against it? Is it the inability of an older generation to understand technology when they barely can figure out how to use their phones beyond Facebook, YouTube and porn? Is it jealousy and envy for all of those people who have created generational wealth on a stupid internet thingy? Is it just the effect of success and financial excess that allows people the luxury to think everything is going to stay the same and life is just perfect the way it is? Is it the fact that financial literacy is used as a tool of oppression in this country and that most young people would rather scroll through Instagram or TikTok for hours than learn something new that takes copious amounts of time to understand?

From my experiences with family members, it’s usually a wasted opportunity to explain crypto and why it's emerging as a legitimate asset class and a new way of life. I can sit down and explain that bitcoin is digital gold backed by the cost of electricity. I can talk about digital scarcity and why basic supply and demand metrics can drive the price of bitcoin up to $1,000,000 one day. I can break down how bitcoin is a better store of value or unit of measure than gold because of its liquidity and the ability I have to use it as a unit of measure with p2p transactions or as a currency at the point of sale. I can talk about how bitcoin is going to become the global settlement layer for world economies and will eventually be owned by every central bank in the world. I can talk about Ethereum and how it is the operating system that crypto depends on to build and deploy applications that people use daily to create financial stability, wealth, content and entertainment. I can talk about how ether is the settlement layer for digital assets and everything flows through its ecosystem before expanding out into its own little rivers and banks. I can go on and on about smart contracts, interoperability, NFTs, synthetics, etc. but none of this sticks, and it often falls on deaf ears, probably as a result of old age, stubbornness, laziness, ignorance, and it’s often a waste of time and a frustrating experience. And I probably should give up on trying to explain why crypto is important and not a scam, but I’m not going to, because it provides an opportunity that is changing the world forever and is a disruptive innovation that can create wealth for millions of people over the course of their lifetimes. 

So I’m going to do what I probably shouldn’t, since it’ll just be ignored by one generation that is either obsessed with scrolling through Instagram and TikTok, or another lost in their old, stubborn ways, and try to explain why crypto is important, how it helps people, and why it is the key to improving the quality of life for all of us on this planet. 

Bitcoin

You can’t have this discussion without talking about the most important asset and the backbone of the entire crypto community. Bitcoin exists as a permissionless and trustless digital currency that facilitates p2p transactions as well as purchases at the point of sale for select retailers (the list is ever growing). In layman’s terms bitcoin lets you send money to people without a middleman and gives you the freedom to spend something that isn’t a depreciating asset like fiat is. 

The benefits of having a permissionless and trustless digital currency is pretty simple: no intermediary can step in and dictate monetary policy. With fiat, the Federal Reserve has the ability to manipulate monetary supply whenever it wants. This is helpful at times when economies need stimulating and institutions need liquidity, but overall this is a tool that’s often abused in order to devalue a nation’s debt and bail out bad actors in the financial system as a last ditch effort to avoid a liquidity crisis and contagion. 

The Fed’s ability to create money out of thin air has a two pronged effect: typically, it leads to asset prices going higher while increasing the cost of living. For investors, the cost of living increase is usually covered by their investments appreciating more than their dollar is devalued, so the trade off is worthwhile and barely has a negative impact. But for the working class who aren’t fortunate enough to have the capital free to invest or the knowledge needed, the cost of living increases can be debilitating as their dollar loses its buying power each year. 

This is where bitcoin comes in as a viable elixir for the Fed’s poison. While bitcoin is known for its rambunctious price swings, over the course of its existence it’s value has increased far more than it decreased during its worst droughts. This is the result of their being a finite supply that can’t be manipulated or inflated beyond the predetermined inflation schedule that has its output cut in half every four years. 

What this means is pretty simple: only 21 million coins will ever exist, you have to use lots of electricity to create new coins which means it’s labor intensive and not something that can be abused or manipulated. Every four years the reward for miners gets cut in half which means the inflation rate decreases. As demand increases while new supply decreases, we see prices go higher with the majority of selling pressure coming from miners to make ends meet rather than holders losing faith. This is what drives the price higher and leaves it susceptible to volatile price swings since we have lots of buyers but fewer sellers that are desperate for liquidity. Since those sellers are essentially programmed to sell in order to continue their mining operations, it leaves them at the mercy of the buyers who determine if they are happy with the current costs. 

When this happens they can take advantage of the miners needing to break even and utilize any pressure from regulators or nation states to their own benefit to drive down prices. This forces mining operations to eventually shut down, lowering the hash rate (amount of miners active) and sending bitcoin into price discovery. When buyers are satisfied with the current sell off, they typically begin accumulating again, sending the price of bitcoin higher while increasing their positions and allowing miners to turn their machines back on and resume the hash rate that decreased. 

Although bitcoin is known for these crazy price swings that scare investors and allow pundits to label it as a volatile asset that is a fad, bubble, or ponzi scheme, it’s the result of a few weak hands that are uninformed and only there for the ride higher, those that find themselves under immense selling pressure due to their mining operations, and overleveraged longs that get liquidated due to their reckless behavior after being caught in the crosshairs of price discovery. The real believers who have invested in bitcoin aren’t the ones selling, and in fact, they’re the ones buying during those massive drawdowns. 

During the most recent crypto winter, which saw bitcoin go from $20,000 down to $3,000, 86% of the holders from the highs never closed their positions or trimmed on the way down. In the last three months, which have been the most violent since the covid lows last year, 83% of holders didn’t move their supply and didn’t bat an eye at the price discovery drastically lower. 

The people who own bitcoin as investors barely ever budge, and more often than not, find themselves to be active accumulators. In addition, we’re seeing new people flowing into the asset during these large drawdowns, with one million new holders entering the market over the past 30 days, which has seen bitcoin rise violently off its lows. So although this is an asset that in theory is too volatile to ever be a currency, it’s one that has strong support from its users and in fact functions as a true store of value over the course of its lifetime. 

With El Salvador announcing bitcoin as legal tender, we’re seeing a new use case emerge for it as a true unit of measure. Although you can spend bitcoin currently thanks to the lightning network, crypto debit cards from Coinbase and other providers, and on the payment rails from the Flexa Network, it’s typically converted to fiat upon impact for most retailers. In El Salvador we could have the potential to see goods priced in sats rather than dollars for the first time which, in fact, would remove all volatility from the currency completely. If you view bitcoin in only sats, rather than it’s dollar denominated value, you will always transact sat for sat and not need to worry about your sat buying you $5 of coffee today, $10 of coffee tomorrow and $1 of coffee next week. 

As more young people enter the business world and find themselves opening up SMBs, the potential for bitcoin to be accepted as payment will increase and at some point, exist on their books as an asset, rather than something that is immediately converted to fiat. Substack recently announced it will be accepting bitcoin for payments, Tesla plans to resume acceptance at some point, Shopify stores have plugins underway that facilitate this process, the opportunity for bitcoin to be used as a true unit of measure is finally here and only going to continue growing over the course of this decade. 

Ark Invest has also speculated that bitcoin will be used as settlement at some point thanks to its ability to immediately reach your wallet within the time it takes for the blocks to confirm, which is infinitely faster than what we have now in the current financial system. This will make more and more sense as we see a rise in central bank digital currencies. China is currently in the process of unleashing their CBDC to the masses and eventually pivoting to an entirely digital world with smart contract capabilities. 

As China’s CBDC enters the market, it will be easier for countries to transact with China by buying their CBDC or finding a global intermediary that is trustless. This is a move that will lead to the weakening dominance of the dollar globally and open the door to an asset like bitcoin to be used as the global settlement layer due to its neutrality. Again, if countries transact solely in sats without worrying about dollar denominated value, we will have an asset that is free of any volatility that impacts trade and international services. 

At some point we will also see central banks which are ravaged by debt and inflation begin to pivot toward having a basket of currencies at their disposal backing their unit of measure, and within that basket will most definitely be the most neutral asset of all, bitcoin. This may not occur tomorrow, next year or in five years, but it is an inevitability as institutions continue adopting and countries begin seeing the light. 

Utilizing bitcoin offers financial freedom for those who live in inflation ravished populations and oppressive governments. There are people currently taking advantage of crypto in Afghanistan to create wealth that far exceeds their daily wages, and there are those who are able to have ownership of their money thanks to crypto despite the banks locking the doors and telling people withdrawals aren’t allowed at the moment.

A few months back Lebanon turned its back on its citizens and wouldn’t let them withdraw money as well, leaving people susceptible to being taken advantage of by exchanging their currency on the black market for pennies on the dollar in order to have some kind of value in their hands. Bitcoin grants its users financial freedom and the ability to own their money, self custody it, and have it in their possession at all times. And while we are currently dependent on the internet and electricity to utilize bitcoin, China is showing that you can utilize a digital currency solely through NFC technology which will be the next foundational step for digital wallets, payment companies and point of sale providers. 

Bitcoin may be an incredibly volatile asset, but when you live in a country where you aren’t allowed to withdraw your money during a crisis, or your money is continually losing buying power each day, like Venezuela for instance, the volatility that you see on a day to day basis in bitcoin pales in comparison to the oppression from inflation and corruption that you face over your lifetime. Bitcoin can and will be utilized to free people from their oppressive nation states, which is probably the main reason China issued their CBDC as quickly as they did to avoid that inevitability, and it can help bring world peace as we all function in unison, as Jack Dorsey hopes. 

There is no asset in the world currently that allows users to send money to each other with settlement that is infinitely quicker than ACH transfers, has a finite supply with holders who are consistently active accumulators, and growing economic and international presence. Gold has long functioned as a store of value over humanity’s history, but in what world has someone been able to carry gold and use it to buy something since the pivot to paper money? Bitcoin gives you that ability, it can be carried literally on a piece of paper if desired, and through technological developments, will eventually be used anywhere for anything. 

Smart Contracts, DeFi and Ultrasound Money

With bitcoin we have a digital currency that functions as the global settlement layer for transactions between countries, economies and people. In the case of Ethereum, at its core, we have the operating system that allows decentralized applications to be built upon it. 

One of the main allures of ether is its ability to deploy smart contracts and allow developers to create revolutionary dapps that change the way we exist and function financially. Smart contracts are the backbone of this industry as it allows lines of code to act as owners of technology. Once a smart contract is written, audited and deployed to mainnet, we can remove the human layer entirely and allow people to interact with the code completely on their own without an intermediary or trusted person ruling over them, deciding if they are allowed to utilize the protocol that’s been created. The only people involved with smart contracts are the users who interact with the project and the node operators/developers who monitor the code for issues, exploits and necessary updates to improve functionality or increase optionality. 

When we have legacy tech involved, legacy being anything that’s been built outside of crypto thus far, we can call this web 2, we have people who act as holders of the keys to the kingdom that determine what we are allowed to do. Facebook,Twitter and YouTube determine what you are allowed to post and how much you are allowed to push the boundaries (sometimes rightfully so as no one should have the right to blatantly spread misinformation and propaganda), and Apple and Google determine what you are allowed to publish to their app stores. Going a step further, we even have those companies creating backdoors and exploits against our will that monitor what we do on our devices, using that information to target advertisers, or determine if the content we are creating is within moral and legal bounds (the Apple backdoor although “noble” in principle—I use quotes because I do question their intentions about whether or not this is to protect children, or a ploy to train their algorithms to develop better AI—is a dangerous precedent that should be discussed in court). For the most part these are issues that we take for granted and push to the side because they let us interact with our friends and family and boost our social currency, self-esteem and dopamine levels, but at its core, it’s a predatory experience that doesn’t reward the user for engaging these products but rather, builds an empire off of their desires and experiences. Smart contracts don’t do that, smart contracts act from a third party perspective on a decentralized level and let you take ownership of what you do. 

I’ve long believed that the next great social media company that emerges will be one built on web 3 that will create a flywheel effect by tokenizing its users, allowing them to stake their likeness to earn rewards based on the impact their content has on the network, as well as rewarding them through fee sharing from the advertising revenue that is collected from their usage. This is just one of many ways smart contracts can take an everyday experience and transform it into a value creating event for its users, and Ethereum is at the forefront of this revolution acting as the OS and digital settlement layer for the entire crypto network. 

While play to earn gaming is currently on the rise thanks to projects like Axie Infinity, it’s still very early to truly quantify the revolutionary impact of its nature. I firmly believe that our children will be able to make a living from playing video games which will eventually be jobs that they can have, by them being paid to complete tasks like building worlds or harvesting items, but it is still early to truly discuss the long term impact. Instead, I will focus on the impact DeFi has had and why it’s one of the most powerful tools for creating wealth that people are dismissing. 

DeFi stands for decentralized finance, which is a way for people to be their own banks and create wealth through various borrowing and lending protocols, as well as participating in liquidity pools as an automated market maker, or in other ways such as options selling and lottery pools, and much much more. The one thing that makes this a revolutionary part of crypto is the ability for people to take their fiat, convert it into crypto (typically a stablecoin) and earn interest that far exceeds what banks are giving you. In addition, it allows people to take their deposits and use it as collateral to borrow money without having to worry about low credit reports, or being denied based on employment history or any other mitigating factor. In crypto, everyone gets the same rate and the same percentage loan regardless of their education level, employment, credit or tax history. All loans are backed by their crypto holdings, typically overcollateralized to compensate for the anonymity, and low risk from a contagion perspective. 

Whereas predatory loans in TradFi can decimate and destroy the world—2008 anyone?—predatory loans don’t really exist in crypto since your holdings will just be liquidated and we move on as if nothing happened. People often cite the need to own crypto as a flaw for DeFi and something that doesn’t exactly help those in need in emerging markets or the working class. But thanks to stablecoins users can just take the money from their local currency and put it into DAI, USDC, USDT, UST, RAI, etc. and be able to participate in the DeFi revolution without ever owning bitcoin, ether or any other “volatile” asset outright. The biggest risks of course are related to exploits and smart contract flaws, but as technology develops, security in theory should improve. 

DeFi should be taken seriously because it changes the entire banking dynamic for people, allowing them for the first time the ability to be in complete control of their money and financial future. Some can think DeFi is just a Ponzi and a fad that will disappear, but with over $85B in total value locked in DeFi currently with institutional products being built at their requests, users are showing the world how sought after and important these services are. This is a new way of life for people across the world that lets them take ownership of their money, be their own bank, and participate in projects and protocols that typically are only for hedge funds and wealthy people. Regular folks can’t be market makers in traditional markets, we need extensive training and financial backing, but on Uniswap or any other DEX I can deposit $100 in USDC and $100 in ETH (or any other pair I want) and collect a percentage of the fees that are being generated. Of course there are risks like rug pulls and impermanent loss, but this is just another example of how liberating and amazing this technology is. 

And this is all made possible thanks to ether the currency which is memetically referred to as ultra sound money. While other chains exist and are worth interacting with and learning about, the biggest, most powerful one is Ethereum and thanks to EIP-1559 and the eventual move to proof of stake that is set to take place early next year, we are seeing the coin’s issuance decrease from a 4% inflation rate to 2% currently to eventually being deflationary upon the conclusion of the merger. 

What does this mean? Well, under traditional metrics for ether, every time a block is mined four ETH is rewarded on average, with the introduction of EIP-1559, we have a change in the structure of gas fees and issuance (inflation). Typically when people want to interact with the Ethereum blockchain to sign a transaction (send money, use DeFi or buy NFTs), they have to pay a fee referred to as gas in order to encourage miners (and soon validators) to include their transaction in the next block. Due to intense demand for block space, fees are often bid up to get included as quickly as possible which can lead to ridiculously expensive gas fees that can cost users over $100 to complete a small transaction. 

With EIP-1559 we have a change in the fee structure with a base fee being introduced that is algorithmically determined alongside the ability to tip miners for their services. Instead of these gas fees going entirely to the miner, the excess is now being burned (100,000 ETH has been burned or deleted so far) cutting the amount of ether awarded per block from four to two. When we move from proof of work to proof of stake, we’ll see the asset turn deflationary which, alongside the amount of ether staked (6% of all coins are currently staked) and locked in smart contracts (26% of all coins are currently locked up), will turn the currency into a scarce asset due to its limited circulating supply on exchanges (rumored to be 10-13% of all coins in circulation), therefore bidding up the price of the coin, increasing its value for holders, and maintaining its demand from a productivity standpoint. 

This is how the ultrasound money meme is created. Ether becomes deflationary, it becomes scarce, and it continues to become heavily sought after thanks to it being the settlement layer that everything in crypto flows through. This is why ether needs to be taken seriously rather than being ignored. 

There are other chains that offer some awesome products which should be considered as well, but the majority of them function in conjunction with Ethereum and act as a way to support the ecosystem, rather than outright compete. Due to ETH’s developer and security moat, it’s unlikely it would be dethroned at any point in the near future. Something like Solana might find it benefitting more in certain areas, like blockchain gaming, but it remains to be seen whether or not it can dominate users in their daily lives. The Cosmos and Polkadot networks have seen a lot of developer attention, but overall their products are still being fleshed out. Terra is building a lot of interesting products for DeFi that maximize LUNA’s productivity. Avalanche has lofty ambitions but currently looks more like Polygon with a bunch of copy and past forks from Ethereum dapps instead of a truly unique platform. Although none of these projects are Ethereum, they should still be considered, researched and played around with because of the importance of a multichain future. 

As long as a crypto project has a real product you can interact with, a strong community of developers and users, it’s worth being aware of and taking it seriously. Projects like Ripple, Cardano and Dogecoin, on the other hand, embody everything wrong with crypto, as they are either cash grabs for founders, centralized to the point of no return or vaporware with no real adoption or use case ahead of them. Despite this being a very important asset class to follow, there shouldn’t be any blind trust awarded anywhere with one’s time and money dedicated to projects that have a vision and are consistently delivering on their roadmap, not promising something like smart contracts for years and failing to bring them to market, despite numerous other protocols doing so rapidly. 

NFTs

Right now NFTs are hot, they’re the most mainstream thing about crypto with the New York Times and Washington Post frequently writing about them. We’ve seen avatar projects like Crypto Punks, Bored Apes and Pudgy Penguins emerge out of nowhere and make people tons of money. Coca Cola and Twitter both minted limited edition NFTs and even Visa recently bought a Punk for $150,000, bringing more attention and legitimacy to a space that’s been dominated by crypto’s biggest winners so far. 

But every time you talk to a non crypto person about NFTs, their mind immediately falls into the loop of: it’s a scam, it’s money laundering, it’s people running the price up through wash sales. And maybe there are some components there that are real, but the vast majority of attention in this space is dedicated to a new way to evaluate ownership and disrupt traditional thinking. 

To a lot of people these are just JPEGs that you can copy and paste and display for nothing. And while that’s technically true, it doesn’t prove OWNERSHIP of any of these JPEGs. I can technically buy a print of the Mona Lisa, or download one off of the internet but that doesn’t mean I need to frame it behind bullet proof glass because it’s worth hundreds of millions. It’s not the original, it’s not actually mine, it’s just a bootleg replica that I got my hands on. The same idea applies to NFTs. You don’t actually own one until you buy it on chain and deposit it into your wallet. 

To sit here and say this is nonsense, fake and meaningless is well within your prerogative, but the world is clear accepting that something digital can be not only owned by one person (unless tokenized), but incredibly valuable and an important part of pop culture. And that’s what some of these projects really are at their root form, a staple of the time period and movement. A lot of the people buying Punks, Apes, etc. aren’t doing it for the flip, but for the legacy behind it. 

Needless to say, this isn’t an open endorsement for any and every NFT. I actually only own a couple that are basically worthless. I personally can’t justify parting with my ETH to buy any of the bigger projects, but I understand the tradition that’s being created here. And something like Art Blocks has my attention so it is possible that at some point, if and when valuations come in, I’ll buy some NFTs from artists or projects that I like. But to be honest, this isn’t why I’m incredibly excited about NFTs and what they represent. To me, the art stuff is just the front door to a much deeper rabbit hole that can truly change the world from a technology perspective. 

NFTs are alluring because they provide immutable digital records of ownership, in other words, they tell you who owns something and no one can change it. It’s basically a contract between two entities that is written in code and stored on the blockchain and nothing can be changed without permission from the owner. 

There are a ton of use cases that will be coming to light that should develop product market fit this decade. The easiest one to anticipate is gaming. Currently, when you are playing a video game, everything you do is confined to just the game and there isn’t any real marketplace or economy. Sure, you can exchange resources or products within the game, sure you can trade characters or items with people, but overall, you’re not owning anything and there isn’t any real exchange of goods for services. You’re just basically saying, I’ll trade you this Charizard for that Eeve and you’re moving on. But, in the blockchain world, an actual marketplace can be created that allows you to be an actual owner of the characters, items and products you consume in games. In the near future (and in some cases already), you’ll be able to sell something you acquired directly to another individual via the game’s marketplace and you will be able to receive a digital asset that can be spendable or easily converted to something that can be spendable in the real world. 

Imagine having that rare shiny Charizard but not needing it or wanting it. Instead, you can sell it to someone on OpenSea or the video game’s marketplace and use that money to buy the Snorlax you really want. Or, better yet, you’ll be able to take that money, withdraw it and convert it into a currency you normally use and use it to pay bills or for a purchase you wanted to make. 

Play to earn gaming is technically here, but it’s going to explode onto the scene in the next few years as game manufactures realize the potential ahead of them. This will create a new form of revenue for gaming companies, giving them the ability to levy taxes on transactions in their marketplace, and if desired, taxes on deposits and withdrawals, all for giving people the access and ability to create an economy inside of a game that has real world use cases attached to it. 

We will also see the ability to utilize the money earned inside of games to earn yield through gamified financial products being offered. Imagine being in Animal Crossing and harvesting apples, you can now sell your apples for a penny an apple, take the money you make from that transaction, place it in your bank account, invest it, or lend it, and earn interest while keeping that money within the confines of the game, and then using it as collateral or spending it in real life. 

This idea of GameFi is the next big thematic that will emerge from crypto within this decade. And one of the big drivers to making this possible will be Star Atlas, the open AAA MMO game built on Unreal Engine 5 and powered by the Solana blockchain. Players will be able to create opportunities for themselves, invest their time and energy, and receive an actual unit of exchange for it that holds real world value. 

We already see people in the Philippines losing their mind and making a living from playing Axie Infinity which is just a dumb, little knock off Pokemon game. Just imagine what will happen when we see a video game developer take those attributes and apply it to a game that looks and runs like a PS5 game. Star Atlas and Solana have the potential to change the entire industry and bring NFTs into gaming and into mainstream society. Of course, things can fail, and Star Atlas could have its Dreamcast moment where the tech was too early for users, but the idea, mechanics and economics are truly game changing. 

Aside from gaming, NFTs can deliver an even deeper, more personal real world importance through the digitization and tokenization of anything. At some point you will see people have the ability to get exposure to commercial real estate through NFTs. We currently see fractionalization emerging in the art world for NFTs through Fractional.Art, I fully expect this idea to carry forward in other industries with people being able to upload their proof of ownership to real estate, a deed for instance, and being able to tokenize their building to provide liquidity and grant passive exposure. 

The entire co-op model is pretty outdated, with people owning shares of a building rather than the apartment they think they’re purchasing, at some point this industry will be disrupted with NFTs functioning as the proof of purchase/digital record of ownership/investment. 

Imagine being a building owner, or even just a homeowner, and needing liquidity for a purchase or event, but not having the time, credit or comfort to go through the banking process which can take months, at some point you’ll be able to tokenize your real estate and sell off fractions of it to create that liquidity. And on the other side, you have people who can be passive investors in real estate projects without ever having to go through the long and arduous mortgage process which is archaic and outdated. 

Aside from the ability to increase your liquidity in real estate, it also allows people to tokenize their property, upload it into a DeFi protocol and use it as collateral for yield farming opportunities. NFTs have the potential to evolve these ideas and allow them to span across any market or real world asset that possesses any type of value. 

We also see an opportunity for the ticketing industry to be disrupted by NFTs. Currently when you buy tickets to an event, like a Dallas Mavericks game for example, you pay for your ticket and the owner, Mark Cuban, receives the fee. If you decide to take that ticket and sell it on StubHub or SeatGeek for twice the cost because the Mavs all of sudden acquired LeBron James and are in high demand, you’ll be able to pocket the difference and Mark Cuban will get nothing out of it. This has been the paradigm for years with resellers benefitting at the expense of the organization. With NFTs, however, all of that changes. Two things can happen, one, the organization can receive a royalty from sales on the secondary market, therefore benefitting from resellers and an influx of demand, and two, the organization can attach some kind of reward or collectible to the purchase of each ticket, therefore increasing the value of the ticket from the onset and improving customer satisfaction. 

Mark Cuban has alluded to this use case and it’s inevitable that it takes off in the near future as every ticket will likely be an NFT solely for the purpose of benefiting from high demand on secondary markets, and the ability to increase prices due to collectibles or rewards offered with each purchase. If NFTs were just some fad, this use case wouldn’t exist and would never even be thought of. 

When it comes to NFTs, we also see a tremendous opportunity for creators to not only interact with their audience and reward loyalty, but also leverage their brand in interesting ways. One project in particular that could lead to a revolutionary change in the way people create is Stoner Cats which features Mila Kunis, Ashton Kutcher, Seth MacFarlane, Chris Rock and more. The project is essentially an animated show that requires viewers to purchase a stoner cat NFT in order to have access to the latest episodes. The idea that makes this interesting is the ability to bypass Hollywood entirely and avoid needing to rely on producers for funding and distribution.

Content creators can fund their projects by selling NFTs to their communities, granting them access to the content and secret rewards like digital meet and greets, collectibles, etc. This is a unique ability to create content, engage a community, and make a living that potentially surpasses the traditional, centralized route that leaves content creators at the mercy of those in power. In addition, it could allow those content creators on apps like YouTube and TikTok to be able generate extra revenue aside from what is received from advertising which is based on subscribers and views. 

NFTs are a revolutionary piece of technology that allows users to blend worlds, giving them the ability to bring any real world item into the digital world and granting the ability to utilize that item to fund projects, receive royalties, make a living, create liquidity and generate income. They may seem like a fad in their popular, mainstream form right now, but the potential use cases and evolution allow society to move past the primitive form of collecting JPEGs and into a new era of digital ownership. They should be taken seriously and valued as a disruptive innovation and technology and not some scam that anyone can create and get rich off of. 

Infrastructure

When it comes to tech, one of the most sought after investments from VCs are the infrastructure plays that power the up and coming technologies that are disrupting the world. Crypto is full of new infrastructure protocols that change the paradigm. 

Oracles are one of the most important pieces to the puzzle for crypto, due to their ability to bring real world data that is off chain (price feeds, weather, insurance claims) and bring it on chain. Basically, something like Chainlink is needed for us to know what an asset costs across all exchanges, and if we were farmers, we’d be able to have important information about crops, weather and insurance bridged into our smart contracts to trigger certain events and reactions. Oracles are the lifeblood of crypto because they take information from the physical world, bridge it into the digital one and allow information to pass through dimensions. Without oracles, we would have chaos and lack an equilibrium when transacting between different markets and contracts. 

While oracles bring off chain data on chain, indexers do the opposite, bringing on chain data off chain so it can be indexed and analyzed. Data is one of the most powerful themes in our worlds today and protocols like The Graph help us scrape information from the chains and bring it into our physical world. This is important because it allows us to analyze what is happening beneath the surface and create a completely transparent look at the crypto industry. 

Building off this idea of data brings us to a new theme that’s budding thanks to the rise of NFTs: decentralized file storage. While we are used to taking out documents, photos and files and storing them in Google Drive typically, it isn’t the most secure or appropriate way to store artwork or important files that were turned into NFTs. Centralization risks from Google, or other corporations, muddy the landscape of immutability and ownership. If I loaded an image into Google, connected it to an NFT, sold it for millions and Google decided to close my account before the purchaser could move the image into their own database, they would be completely out of luck and the whole NFT industry would collapse. 

This brings us to protocols like Filecoin and Arweave which provide decentralized file storage services that have risen in popularity with the NFT community. Since a lot of the NFTs we see are large files, they can’t exactly be stored on chain, only the proof of ownership could (aside from a few projects) and users have to pull their original images from somewhere if they want to be in complete possession of their files. FIL and AR give you that opportunity to have the images stored decentrally, without worry of a corporation stepping in and ruling that you are violating their terms of service and terminating your account, or worse yet, claiming rights to the images and demanding a percentage of your profits from the value of the file. 

This is becoming an important infrastructure play that will only grow to be more and more pivotal as NFTs continue to grow into the mainstream and evolve their offerings. 

Filecoin just recently partnered with Flow to provide users of their network with FIL’s decentralized storage solution. This is just the beginning of a long runway of opportunity here for IPFS and decentralized storage as a whole. 

Arweave is a little greener on this side of the coin, but they are partnered with Solana and as SOL’s marketplace grows, it is likely that AR’s will continue to inflate alongside it. 

One of the most important pieces to this puzzle, however, and possibly the most necessary infrastructure tool to make crypto possible as a mainstream mainstay, is payment providers. While users can technically spend their crypto through Coinbase’s debit card, and a variety of other crypto debit card services, the future of finance isn’t in a piece of plastic, but straight from your digital wallet through QR code and NFC. 

The protocol that stands to gain the most here is Flexa Network which leverages the AMP token as collateral to process immediate, fraud resistant p2p transactions in any currency at the point of sale. 

The biggest flaw for spending crypto has been the threat of double spending and long confirmation times. Having to wait 5 minutes for blocks to confirm isn’t doable when you’re trying to buy coffee from Starbucks. AMP helps us avoid these issues in a very clever way. 

In order for Flexa’s rails to power transactions, users need to stake their coins for collateral which gsfs liquidated upon purchase and converted into the merchant’s desired currency (they decide on their end their preference but typically it will be fiat for now). Essentially what happens is simple, I want to buy coffee with bitcoin, I scan my QR code and Dunkin Donuts gets the $4 in cash that I owed them right away. Behind the scenes however, we have my bitcoin sitting in limbo as it’s blocks are being confirmed, and AMP from the staking pool is sold and converted into fiat to immediately pay the merchant, when my bitcoin is confirmed, it gets sold and converted back to AMP and replenishes the staking pool. This enables the most important piece of this puzzle which is seamless and immediate fraud resistant and risk free transactions. 

While some can claim that there is no purpose or utility to crypto and that it’s just a money laundering Ponzi scheme, the reality is through these infrastructure protocols that play pivotal roles in enabling price feeds, analytics, storage and payments, amongst many other ideas I didn’t touch on, we are seeing not just an asset class emerging, but an entirely new way of life that is disrupting the old guard and changing our existence while creating new innovative protocols that go beyond the traditional corporate format. 

And that traditional corporate format is currently being disrupted by DAO’s which are decentralized autonomous organizations. This new structure is an important piece of the instrastrue puzzle as it takes businesses from a centralized corporate entity whose decisions are dictated by a select few, and turns them into community driven products with no overbearing central figure. DAO’s offer a new potential way to take an idea, bring it to market and raise funding for projects that run themselves. These are community driven projects that never have to worry about approval from banks for loans or appealing to venture capitalists that lack the foresight to see their vision unfold or lay out the risks they need to bring something to light.

They also protect ideas from manipulation by investors. OnlyFans recently risked destroying their business and ruining the lives of millions of women by temporarily banning explicit content. Sex work isn’t something that is approved in the world of finance and due to difficulty from finding investors, OnlyFans was willing to cast aside over 10 million women who utilized their platform to provide safe, consensual, and economically appealing opportunities for themselves. If OnlyFans was a DAO with a token, they could have appealed to their community, involved content creators more directly, and utilized their vision to grow the company. DAOs might provide the most important form of infrastructure for organizations in cryptonby freeing them from the chains of bankers, investors and regulations, and allowing them to function freely and on their own merits, as dictated by their users, developers and community. 

The Point of No Return

There are a plethora of new opportunities ahead of us that are very different from the traditional way of life that people are used to and crypto is the wave that innovation and disruption is riding. 

It’s very easy to claim that everything you don’t understand is nonsense and a scam, but the reality is, the best opportunities exist when people struggle to understand the potential implications. 

Using one’s time to understand crypto and why it isn’t just some fad but in fact a disruptive, innovative revolution, can set someone up for a generational opportunity to never worry about anything again. 

Crypto may seem like a scam to the misinformed, ignorant and lazy, but to those who have fallen down the rabbit hole, it is one of the most exciting and compelling times in human history. Bitcoin saves lives, Ethereum, smart contracts and DeFi improve business, create wealth and grow our quality of lives, NFTs disrupt the old guard and put more opportunity in our hands, and the infrastructure that’s laid out legitimizes everything and gives us all the chance to interact with some amazing products and people. 

This is an industry that’s been dead many times that has constantly risen from the ashes and pushed itself to new heights by acquiring new users along the way. Take advantage of this opportunity by reading as much as possible, talking to as many people as possible and asking every single question you can imagine. 

This isn’t just a fad anymore, it’s a way of life now. 

Mega caps haven’t rolled over yet and for the most part have been pretty insulated from the sell off in growth so far. I would be careful with Apple here and watch the 148.42 level, that needs to be reclaimed to resume the potential move to 150+. If we see a fade off of that level, there’s a good chance this rotates down to 142.66 at some point. I would be ok with being a buyer there if it holds but if that’s lost, there’s technically room all the way down to the 136s.

ARKK

Closed the week inside of value, as long as that 115 level is held, this isn’t necessarily a short opportunity. Below it, and anything goes, but above it and it’s best to be neutral to long with a tight stop. If we lose 115 and close below 113.65, there’s a decent chance this washed out to the 101-105 range.

BABA

Someone really puked up a position here last week. The selling volume is just insane. In theory, it should be close to at least a dead cat bounce. Risk against the 153 level could work, but this is going to be a tough, counter trend trade for a while. Until we see a reclaim of the 173 level, it’s possible that we see people selling into any rallies.

CFLT

This one has held up well after its earnings report despite tech being destroyed. I like the way it’s setting up here for another leg higher. Keep an eye on it over 54.23, if it can clear that venom line and hold it we might see an eventual rotation to 60.

COIN

This one has held up decently as well. The board recently approved a $500M purchase of cryptocurrencies and given the CEO the green light to use 10% of their profits moving forward to buy more crypto. You’re basically seeing Coinbase turn into an ETF here while maintaining its legacy business, and the optionality that comes from staking, venture capital and custody. 249.64 needs to hold and if bitcoin maintains its bid or even just chops around sideways for a while, this can be back at 271 quickly. Through there and it should catch a 300 magnet if crypto lets it.

CRWD

I like how this one is holding up as well, needs to clear 238.50 to get me interested. Through there and it should catch a 253 magnet heading into earnings. If 231 is lost, which could happen after earnings, this has lots of room to the 199 and 191 levels, so keep that in mind when buying any dips.

DOCS

Starting to build a bull flag, would love to see this continue consolidating up here and holding this range. Under 71 and a 60 magnet is possible so be careful if it starts to break down. Dips against VWAP (74.47) could work here.

ETHE

I prefer to own the asset outright, but this one offers a bit of a discount right now to ETH. A move through 31.30 should send it toward 38. Obviously this is dependent on the price of ether going up but this is a decent little way to lever up and juice your gains, or have exposure in an IRA for tax purposes.

ETSY

Lots of strength here after being an early fader before tech really came down. Eying that 203 level, you could see it back off and continue lower, but if that’s cleared, the VPOC at 218 looks doable. I’d keep an eye on Etsy more as a sneak peek at what tech might do, I’ve got the feeling we might see a bounce in growth this week based on how this one has acted.

FVRR

Shook under that pivotal 163 level and reclaimed into the close on Friday. This is one I’d watch here since it can quickly see 177 out of nowhere. Dips against 163 with a stop under the recent swing lows could work.

GRWG

Want to see this make one more hard push lower, shake under 25 and close above 25.63. Would be a good place to get long if that happens.

NVDA

Big volume came in late last week, looks great here on weak opens for an eventual move through 208 to 211+

PATH

Quiet chart, looks good against 59.48. Over 66 and you could see 70, 74. This reminds me a little of Coinbase last month when it hit the 200s and then started bouncing back to 220+

S

This might run over 51.59. Worth keeping an eye on, especially if CRWD has a big week.

SHOP

Technically could be an ok place to try some long, but I’d be super careful here if Friday’s low is lost. If it sweeps underneath there and closes beneath it, this has a very real chance at heading back to 1259.

TSM

Idk if it’ll happen, but China fears plus growth fears could create an amazing opportunity here. Alert set for the top of value around 89. Could be a great place to get in on one of the world’s most important companies. If aggressive, or you really like this one, you could use those VPOCs at 104.69 and 97 as potential levels of interest for buyers.

U

Good rebound and solid volume on Friday, liking this one a lot moving forward as it seems like institutions are getting involved. Should continue rotating higher to the top of value at 138.55. Obviously anything could happen, so who knows.

Every ten years or so the world as we know it changes. We enter a new epoch and usher in a new way of life. In the 90s we had the internet enter our lives with computers becoming foundational pieces of our homes—devices that we all gathered around in awe and fought over in order to utilize. The 2000s brought us the ability to chat with each other instantaneously through instant messenger and introduced us to the defining characteristics that changed society forever: social media. 

What once was just an experience that we lauded as a way to demonstrate our individuality and uniqueness through layout designs, music choices and likes, has now become the foundation for our social currency, and to many faults, the bane of our existence and the ultimate cause of nervous jubilation and emotional distress. 

But alas, the world is undergoing another paradigm shift, one that is taking us slowly away from the neverending dopamine drip of scrolling, and injecting us directly into the metaverse. 

This new buzzword is the thematic of the future, the pivot the world has decided will be the next step in our evolution, the bridge that one day brings us to total singularity. There are many companies at the forefront of this emerging thematic, but there is only one ruler, one kingpin, one administration that we care about here. 

Facebook

In the year 2030 Facebook will be a multi-trillion dollar company that will be split in two. There will be the legacy side which will be Facebook.com, Instagram.com, WhatsApp and Messenger, and the 2.0 side known as Reality Labs. 

Reality Labs is Facebook’s VR and AR branch that focuses currently on the Oculus Rift, Portal, Spark AR and the unnamed Facebook Watch which will be the defining piece of technology that will be this generation’s iPhone moment. 

Reality Labs will grow to be a trillion dollar company in its own right and eventually spun out, while the legacy side of things will become a dividend paying digital property holding company, akin to Proctor & Gamble for CPGs. The legacy side, which we will continue to refer to from now on as just Facebook, will continue to dominate the world from an advertising perspective, but having morphed into a metaverse company, will become a deeper representation of data and information than just apps for people to communicate and share pictures on. 

Facebook will continue to dominate in social media through advertising, social commerce, and as a platform for NFTs. Users will be able to monetize their Instagram accounts in two ways, through ecommerce and NFTs. They will be able to sell their uploaded creations and receive royalties when those assets are traded elsewhere down the line. Facebook will try and make a push to acquire OpenSea, which becomes the Amazon of the NFT marketplace, but will fall short of its offer of thirty billion dollars. Regulatory risks will inevitably play a role as well in the difficulty that Facebook has in facilitating a deal, despite shareholders on both sides being in agreement and for the merger. 

Because Facebook will not be able to complete their purchase of OpenSea, they will incorporate the ability to buy and sell NFTs into Facebook, Instagram and WhatsApp. Messenger will not participate in this push but will continue to morph into a CPaaS offering for enterprises for customer service. Call Centers will slowly be phased out, leaving companies with the choices of using Zoom, Messenger or Twilio’s APIs. Messenger will also attempt to evolve into being a workflow platform akin to Slack, but fail to find any real traction amongst developers, partly because of trust issues with Facebook’s reckless display of abusing user’s privacy. 

WhatsApp will continue to grow and emerge into a super app that competes with Venmo, CashApp, AliPay and WeChat. Facebook will continue borrowing from the east and incorporating a lot of the ideas that Chinese tech companies have found successful in their mobile apps. The main issue that Facebook will have to deal with, however, will be regulatory approval to offer financial products. Facebook will attempt to bypass this through the purchase of a smaller NeoBank. 

The combining forces that link Facebook to Reality Labs will be Oculus and Diem. We’ll get into Oculus and Reality Labs in a few moments, but Diem will play a big role in Facebook’s evolution this decade as it will function as the default currency of the most heavily populated walled garden on the planet. Facebook will continue to face regulatory issues over Diem and its existence as a stablecoin. While Facebook will continue to lobby its way into getting over the regulatory hurdle, the easiest path will be to create the token as an erc20 and offer it as the token needed to enter and transact in their metaverse. Users will need to purchase Diem, which will be algorithmically pegged to $1, stake it to gain entry into the metaverse, and use it to transact in the digital items, services and offerings that take place. We’ll talk about Diem more later, but for now, let’s look at 2.0. 

Reality Labs

With the legacy side of business eventually existing the way we see companies like Proctor & Gamble and Johnson & Johnson today, Reality Labs will be the second wave of innovative and disruptive technology that changes our lives and consumes us forever. 

Oculus continues to develop as the default platform for virtual reality. Apple’s entrance into VR and AR further legitimizes the thematic and creates the competition needed to snowball developer activity and users in this new way of life. Oculus, its operating system and app store, will be looked at as the Android of VR/AR. Google will have entered this segment much later than desired, as a result of their push toward autonomous driving and robotics-as-a-service taking priority, and will look like Microsoft when they tried to enter the mp3 and mobile markets. This doesn't mean Google will die, it’ll just reap the rewards of other ventures instead of being the de facto OS of VR/AR.  

VR/AR doesn’t take off, however, until Facebook releases a much smaller headset, that is sleeker and more user friendly than SnapChat’s AR glasses and the Facebook watch comes to market. The combination of these AR glasses that are no larger or different than a pair of RayBans and the watch will enable users to merge reality with virtual worlds. The watch will allow users to cast keyboards, content, games, etc. that will be visible with the glasses on. This will allow Facebook to pivot to a smaller frame and lens and make the entire experience less bulky, more user friendly and visually appealing. The watch, in essence, will be the operating system that powers the metaverse (early on at least) and the glasses (early on at least) will be the lens we view everything through. 

Over time, as tech continues to grow, everything will become more powerful and smaller, as we have seen with the development of mobile phones thus far. The bulky headsets won’t be a thing, nor will the need to have two different devices on you to enter the metaverse. The watch will just be the stepping stone needed to take things to that next level. 

Technology aside, user experience will be the necessary task to make Reality Labs a meaningful venture. Facebook will buy Matterport at some point for its ability to create digital twins. Facebook will use this software to digitize real life social events and allow users to be fully immersed in real life experiences from the comfort of their homes at a premium that represents a slight discount from the physical encounter. The combination of fear and anxiety stemming from covid’s years long headwinds will encourage users to be able to still attend the spectacles they loved, like sport events, concerts, shows, clubbing, etc. while in the safety of their home. Because of Matterport’s technology, users will not just be able to find themselves immersed in the event as viewers or bystanders, they will be active participants, able to walk around and see the event from different angles, being able to get up close next to their favorite athlete or musician and see themselves right there, next to them. Imagine watching LeBron James drive to the lane and dunk on someone from not just a courtside seat, but on the court itself! This kind of immersion will change the way we consume content forever and create a moat for Reality Labs, bringing forward the digitization of everything we do more than covid has already done. 

Aside from the way we consume content changing forever, the metaverse will explode through the digitization of our lives. We will be able to sell advertising rights on the digital twins of our physical property, which will be viewable through AR glasses. In addition, we will have digital real estate being made available that users will interact with, in a similar vein to Roblox. Users will be able to create experiences and events for each other to interact with through various sandbox games, locations, theme parks, etc. Diem will operate as the currency used for admission for those experiences and events, as well as for merchandise that is sold in the metaverse for user’s digital property and avatars. 

Those avatars will be able to travel throughout the sandbox and participate in work meetings and casual hangouts. Atmospheres will be created that replicate typical real life experience but amplified through the freedom that technology offers. Users will be able to have a glass of wine in the physical world while hanging out with their friends as avatars in bars, clubs, restaurants, etc. They will be able to travel and experience all of the wonders of the world without ever having to board a plane or spend the thousands of dollars that traveling requires, or deal with the headaches and safety concerns associated with covid. 

Diem

When it comes to Diem, it will go beyond being used to buy/sell goods, services and events, etc. Facebook will go a step further with Diem, taking it from a video game currency to an entire financial services platform that meshes physical life with its virtual alternative.

In the east, super apps offer banking services like savings and lending, insurance, brokerage, etc. this is something that is on the rise in America, but not fully implemented. We see Venmo and CashApp slowly laying the foundation for these ideas. Facebook will merge the ideas of the east with the emergence of DeFi that is penetrating the west. 

Users will be required to own Diem to enter the metaverse, they will be expected to stake a small amount that represents ownership of their avatar and residency. Users will have the ability to upgrade of course and transact other goods and services like renovations, theme parks, attending real world events, etc. Diem will play a pivotal role in making all of that possible. In addition, users will generate yield on their staked positions in the form of revenue sharing. 

Since Diem is the unit of expense that everything is settled in inside Facebook’s metaverse, there will be a small tax levied that is equivalent to the fees Uniswap receives on its DEX. This fee will be split between Facebook’s balance sheet and redistributed to stakers as a way to create high yield savings accounts inside of the metaverse. Users will be able to save their money in the metaverse and through platforms like the Flexa Network (AMP) and Alchemy Pay (ACH), be able to spend Diem in real life as well, which will make Diem not only a virtual currency, but a store of value that competes with stablecoins like USDC and DAI. 

In addition to staking to generate savings yield, users will also be able to lend out their Diem and participate in the same money legos we see present currently in the world of crypto. DeFi will be a foundational part of Facebook’s metaverse and play a role in its financial offerings for Reality Labs and the legacy business. 

Conclusion

Reality Labs will be the hardware and software side of the metaverse and be the platform that everyone utilizes on a daily basis. Although the OS will be dominant, the sandbox will be made available across other platforms to maximize Facebook’s ability to create revenue. Users will find themselves working in the metaverse, completing various tasks and offering various types of content. Essentially, anything that can be done in person will be ported over to the virtual world and become an extension of our physical selves but in a more free, liberating and enjoyable way. 

Whereas social media is currently operating in a way that is oppressive from a psychological standpoint, Reality Labs will empower the user, grant them freedom and create a much more positive, peaceful, non hostile experience that allows everyone to be a fun representation of themselves.

Facebook will see itself grow and evolve into a legacy holding company for digital property and advertising and a rampantly growing metaverse platform for people to immerse themselves in fully that changes the dynamic of humanity forever. Users will be able to finally receive a percentage of the revenues they help generate on its platform as well as be able to leverage their presence through borrowing and lending protocols and other financial instruments. 

The future is being set up for Facebook to change the world through its introduction of VR/AR and the metaverse that converges with crypto thanks to Diem. It’s going to be a crazy time, a wild future that empowers users after taking advantage of them for years, and it will bring us all further into the digital world that will one day grant us singularity. 

As always, this is just a random thought experiment that I’m having fun with. There are no guarantees that anything I said even remotely comes true, but this is a fun way for me to think and try to predict where the world is going. Please don’t take this as financial advice, this is meant to solely be fun. 

There are no guarantees in life, but there is strong price action and BTC and ETH are showing that right now. Dips have been getting bought up pretty quickly, bad news has been ignored and demand has been increasing. Looking at these two charts and I see some good opportunities here still on the long side. Anything can happen in crypto, overnight we can see a massive liquidation and crash, but looking at these charts, and barring any catastrophes, I think we see some strong action in the days ahead of us with BTC using the VPOC at 55,255 as a magnet and ETH pushing toward the venom line at 3699.25. We might not get to these levels in a straight line, but I do think we see them in the near future. I would like to see Bitcoin hold 45,790 in order to be completely confident, any daily closes below that level could trigger a retrace down to the 36430 level.

ARKK

We might see some more weakness this week. ARKK is trading inside of value and typically the longer we sit there, the more likely we are to rotate to the bottom of value. This could trigger a move down to the 115.57 level which would be a decent place to try some long for a bounce. I don’t foresee this market rolling over, growth is already pretty beat up while posting solid earnings, so any dips should catch the attention of buyers. A close over 124 would invalidate the idea of a dip to the 115s and would set up a move to 128 and 135. Could be some good opportunities here in the near future.

ARKG

Pulling back toward the bottom of value again, this has been a bit rangebound but volume hasn’t been bad so I think this is setting up a good buying opportunity more than a potential breakdown. This needs to hold the 81 level, otherwise the long idea is invalidated and we can see a scalp to the 79.49 VPOC. Getting long at the 81 level, especially if it shakes under and reclaims, could be a decent opportunity with a swing target at the top of value which is 88. This coincides with the top of value for the year so there’s going to be some heavy selling pressure, but once it clears that level, this can fly to 93 and 101.

AAPL

This has the makings of a nice, easy swing. Things aren’t always easy in the market but as long as AAPL holds over 148, I think we can see a move toward 154. I really like this set up so far and would definitely keep an eye on it.

BABA

At some point the China discount will expire and this one will run again, and I think we might be getting close to that time. 173-175 seems like the potential load zone as it’s the bottom of value for the year. If you wanted a position, this is the level to target with your bids. If we hold it, I wouldn’t be surprised to see this become a very solid swing long term with an eventual move back to the highs. But as always, it’s at the mercy of China and this isn’t a trade you put major size into unless you are completely comfortable with the political risks. I’ve got an alert set and may grab some call spreads or a small stock position outright with a stop.

BIGC

I’d watch that 64 level, it could be a place that this fails at again and rolls back over to 55.53 eventually, but if it can reclaim, 67 and 71 could be magnets.

DLO

I don’t know this one well, I’ve only done a quick look at the fundamentals, which are pretty interesting, but earnings are coming up this week so there’s that to keep in mind. I do like how the chart is setting up here for a nice push over 52.70, this could probably catch a 60 magnet and really get going if it has a strong report with raised guidance.

DOCU

Keeping an eye here for a break through the top of value and reclaim of 300. This one has been very quiet since it’s last earnings report when it ripped and ran. If 300 fails, a move back to 278 could be in the cards, so I’d be prepared for that.

FB

One of my favorite large cap long ideas for the decade thanks to its push and pivot toward VR/AR/Metaverse which it has a great head start in. I really like this chart if 362 holds for an eventual move back toward 377. Under 362 and 354, 339 are possible so keep that in mind.

GME

Posting this chart just in case these meme stocks get going again. So far it’s failing at the bottom of value which is acting as resistance, if it can clear 165, a big push to 190 and 191 isn’t out of the realm of possibility. Maybe they release some news on their planned NFT project to take advantage of the hype in crypto right now. That could be the catalyst needed to trigger another wave of squeezes.

MAPS

I don’t know anything here about its fundamentals, but the chart looks ok for a bounce play against the bottom of value. Dips to 12.89 could be worth buying, but I wouldn’t be too enthused about being long under that level. I would rather let it shake out, reclaim and buy back in. 12.53 is the swing low so that could be where you throw a stop if you wanted to give it a little more room to shake out and work.

NVDA

Large and mega cap tech is the move right now, as long as this one holds 200 it should continue its ascent to new all time highs. Don’t be surprised if we see a rotation at some point out of large/mega caps and into growth again, as growth is starting to get oversold, but as long as NVDA holds that 200 level, every dip is buyable.

OZON

Needs to hold 51.76, if that level breaks and it fails to reclaim it, there’s room here to 48.52 and 46.60. It should bounce off that 46.60 level, but you never know. I would be cautious just in case political tensions rise between America and Russia with what’s going on in Afghanistan right now. There shouldn’t be any issues, but I wouldn’t rule any headaches out since politics always gets in the way of things.

PINS

Unless it reclaims that venom line at 58.54, this probably heads back to the top of value at 50. It is what it is. Would be a good place to add some.

PTON

106.94 is the top of value for the year and it looks like a potential magnet at this point. Would be a good place to try some long or add if you like the fundamentals. I might find a way to get longer if we see this level hit. Below it and things could get ugly, so who knows.

RBLX

Never took a position here, it is what it is. 85.77 is the upside pivot, through there and we have 88.60 and 103 as potential magnets over time. If 85.77 fails, a rotation back to 79 and 75 could be in the cards. This one is benefitting from Unity’s awesome execution thus far.

SNAP

Needs to reclaim 75.58. Under there and we have 66.69 and 59.82 as potential levels of interest. Dips down to those levels could be very attractive considering the amazing quarter it had.

Bitcoin and Ethereum

Seeing some weakness somewhat here, both were overbought and have gone straight up in the last two weeks so a pull back is healthy and very welcomed to bring in new buyers and give us all one more shot to add in before a potential new all time high is attempted. Eying the 37,665 to 36,430 levels for bitcoin and 2334.75 level for ethereum. Any pull backs down there that hold, or shakes below and reclaims above could be decent dip buys.

ARKK

Growth has been getting beat up a little during earnings so far so this is something to watch. I’d be cautious until we can break over 124 or shake out to 115. Could be decent levels to play here with tight stops.

ROKU

Earnings this week, tough comps could make this a hard one to beat and lead to a sell off. If that’s the case, I’d watch the 400 level, venom line at 375 and VPOC at 346 for potential levels of interests for buyers

ETSY

If we see a sell off on earnings this week, I would watch the 168 and 153 levels for any potential areas to start in or DCA. If we see a bad print and this loses 153, I’d be super cautious with an eye on that 126 VPOC as an eventual magnet.

SQ

The Afterpay acquisition is going to weigh down on the stock so I’d be careful here. This needs to hold 235 and if that’s lost, a trip to 220, 207, 183, 160 could potentially be in the cards. I’d look at CRM as a comp here for what to expect price action wise.

FSLY

Fastly may see a short term miss as a result of that outage and refunds that need to be distributed. If we see any guidance misses due to people cutting their partnerships, I’d be seriously careful here. A trip to 43 seems likely, but if there’s any guidance weakness, this is going to be a $29 stock again. I’m long and holding for 2023, but this is becoming a tough one to be long.

NET

Unlike Fastly, Cloudflare is consistently executing well so while the numbers should be good, this has been straight up and could see a sell off as a result of any numbers being reported. I’d watch 112, 102, 98 as levels of interest here for buyers to step in.

MGNI

This has kind of ignored the rally that came in digital advertising so I’d be careful with earnings. Magnite needs to hold 29, otherwise 26 is in the cards and below there, we can see 21s.

NFTs remind me a lot of the ICO bubble from 2017-18. Big new piece of technology that is going to change the world forever with these amazing use cases that will change how we function. People go crazy, start chasing these opportunities with hopes of getting rich, assets go out of this world and see insane fluctuations in value, people get bored, the window of opportunity shrinks, liquidity dries up, people stop caring, price of assets depreciate, people think NFTs are scams, people capitulate and move on to the next exciting opportunity, smart people swoop in and find the best deals available at depressed prices. The End. 

I’ll be honest, I fell into this narrative completely, bought a few NFTs, got sucked into the hype, tried selling them for 10x what I paid, couldn’t, kept lowering my asks and ultimately got rid of them for nothing just to salvage the little ETH I could get my hands on. And here’s the thing about NFTs, they are an asset that no one truly knows how to evaluate, they make very little sense in comparison to what's traditionally located in the art world, and people are annoyed by the insane runs some of these products are having. 

There are a ton of potential use cases that exist with NFTs, from art to content creation to ticketing to gaming, but the one aspect I’m going to focus on for this article, however, lies mostly in the art world since it’s the area that is most highly publicized. 

One of the biggest issues plaguing this industry is liquidity, which is something that’s only now being addressed and potentially solved thanks to a few projects that I think are really interesting, Fractional.Art, NFTX, NFT20. These are three platforms/projects that are coming up with creative solutions to the biggest problems the NFT world has and allowing users to blend NFTs into DEXes and DeFi. 

Fractional.Art

This is a project I learned about from listening to the Bankless Podcast this week. Fractional is an awesome idea that directly addresses the difficulty toward being a buyer or seller in the high end NFT world. 

Up until now, if you wanted to own a high end NFT, like a Cryptopunk, you would have to spend tens of thousands in order to secure it. Conversely, if you wanted to lock in your profits and move onto a different asset, or engage in yield farming instead, you would need to find someone with a ton of ETH at their disposal that could take the Cryptopunk off your hands. Fractional.Art addresses this issue by allowing the tokenization of NFTs as a way to create liquidity for buyers and sellers. 

I’ll be honest, Cryptopunks make little sense to me in terms of why they are a highly sought after asset. Any attachment I would have toward one would solely lie in the investment opportunities associated. At the same time, I have absolutely no desire to spend more than 10 ETH on one just to have the chance to sell it for more than what I paid. This is where Fractional comes in and carves out a moat for itself. 

Fractional allows users to be able to tokenize their NFTs and sell a portion of their position. For instance, if I owned a Cryptopunk, I could decide to tokenize the asset and allow 10% of it to be sold to people. I would retain 90% of the asset and be able to lock in some gains, or raise some capital for other investment opportunities while still holding a major position. This is great for a few reasons. I now have the ability to raise money without exiting completely or diluting my stake too much, depending how much I want to make available to the public. As a buyer, I now have a way to get exposure to an asset that I otherwise had no chance of ever being able to track natively. 

By tokenizing NFTs and allowing fractional investments, newcomers will be able to enter an asset class they either don’t understand fully, or find daunting due to the level of capital that needs to be allocated. This will allow people to build extensive portfolios full of blue chip projects worth thousands or even millions and gradually broaden out to other investments. This will bring more attention to the field and allow more artists to monetize their work and grow their followings. And unlike in TradArt, those in NFTArt will be able to still show off their holdings and collections since everything is digital and readily available. While I might not have the original file made accessible to me, and I don’t own the majority rights, I can still showcase my Cryptopunk, whereas in TradArt, if I owned 1% of a famous painting, I would never be able to have that painting on display in my home unless I bought a print, which is visibly not the same. 

So how is this made possible exactly? When you tokenize an NFT you are basically converting an erc721 into an erc20 which is able to be swapped and traded on a decentralized exchange. So yeah, you never actually own the file or the erc721, but that erc20 that I have represents the right to ownership of the asset and no one can take that token away from me. What’s even better than it being my position that no one can strip away (unless the reserve price is met and the original NFT is sold, which would trigger a buy out and is basically a financial win-win for me), I will eventually be able to use this token as collateral in DeFi to borrow money or earn yield on, which is great since now I take an inanimate object and turn it into collateral or passive income which thus brings the object from the digital world and into real life applications (did I just describe the Metaverse?).

Users run the risks of course of the NFT losing value due to fluctuating prices and potentially inflated market conditions, so, as always, they should tread carefully and know their risks and what they own. There’s also the possibility that a user can absolutely love a project and one day find themselves no longer invested in it. This would be triggered by someone buying the NFT, which I touched on briefly in a parenthetical annotation. So how does this work? Well, when you tokenize your NFT you set a reserve price that needs to be met, typically it’s a price much higher than the current going rate and it’s a level that many people would be hard to refuse selling at. If that reserve price is met, NFT is entered into an auction with potential buyers able to bid the project up in pursuit of its ownership. Once the auction expires, and the holders all vote on it, the project is then sold and everyone receives their fair share of the return. It’s not ideal for hardcore collectors who loved what they owned, but it’s pretty awesome from a monetary standpoint and gives everyone a passive opportunity to bet on the long term value of an NFT. 

If you like the idea of having exposure to projects as a minority owner with minimal risk that you can predetermine, this is probably one of the best ways to be involved in the digital art world without having to lay out any large amount of capital. And if you were one of those lucky people to be in a project early, or suddenly see a crazy run up in price, or are unfortunately dealing with an issue or event, you can tokenize your NFT, take in some capital, perhaps even clear your original risk or investment, and be able to maintain majority ownership of an asset you love and reap the rewards of its growth. I don’t see myself really getting after high value NFTs, but I can totally see myself getting exposure to projects through Fractional. 

NFTX

When it comes to the world of TradFi, we see users have the ability to passively get exposure to a sector through an ETF without having to pick an individual stock and understand traditional valuation metrics or intricate details about specifics. Without realizing, we’re seeing that same concept seep into crypto through protocols like the Index Cooperative which creates crypto ETFs like DPI and MVI which track DeFi and Metaverse coins, respectively. NFTX provides a very similar service except it is specialized in only tracking NFTs like Cryptopunks and Hashmasks. 

Users can do a few things here with NFTX. They can deposit their own NFTs into vaults, mint an erc20 token and use it to yield farm or create liquidity to exit a position and enter a different trade, or stake that erc20 into an NFT-ETH SLP and create yield while still holding the rights to an NFT in the pool they deposited into. Conversely, users without NFTs can get exposure to the particular asset or class by buying that erc20 on DEXes like Uniswap or SushiSwap, allowing them to trade the trends of the underlying asset without ever having to settle on a particular NFT or worry about running into any liquidity issues as you wait for auctions to finish, or offers to be made. 

Right now, we’re in the super early stages of this idea, with only $641,324 in TV and only 1,869 NFTs locked in its vaults. This isn’t an astronomical number by any means but a great beginning to an idea that is still in its infancy and without any mainstream attention. NFTs have a tremendous runway here as they gain attention from regularly people who are non-crypto natives, and an asset like NFTX can do wonders to help the sector increase its value long term. Right now, a lot of people are confused about what Cryptopunks and Hashmasks even are, why they have any value, and how to even purchase one of them. The majority also don’t have the means to be involved in high end NFTs like that Autoglyphs, Crytpokitties, etc. Being able to own PUNK or GLYPH however gives users the ability to track the underlying in a fractional way. So while Fractional is focused on tokenizing individual pieces of art, NFTX is focused on giving you exposure to an entire basket of an NFT class. This is a great moat that doesn’t really exist at a high level yet. 

The only downside here to NFTX, however, is the fact that the price is derived from the assets deposited into the vaults. So if I deposit let’s say a Hashmask and I’m the only one in the pool, you, the user looking to get long MASK isn’t going to get a fair and liquid print, you’re going to get a very biased offer. Over time we should see more liquidity flow into the platform and enable these markets to become deeper and more realistic, with tighter swings and spreads, but this is something to take into consideration when looking to get exposure to a class you like, like CyberKongz for instance. 

NFT20

So the biggest criticism that I can think of right now in the world of NFTs is the illiquidity of each asset. It’s cool that I can buy some amazing art work, but what if I need the money currently for something unexpected, or what if I regret my purchase and have buyer’s remorse? It’s not easy to exit a lot of these projects, especially the smaller ones that basically have little to no liquidity. This is where NFT20 (MUSE is their token) comes into play. 

NFT20 is an NFT Liquidity Protocol that enables users to deposit their erc721s to create erc20s, or swap them for other tokens. This basically takes an asset that can be very static from a liquidity perspective and turn it into something dynamic. 

This is similar to NFTX, but the difference here is, NFTX is trying to create index funds for different NFTs while NFT20 is looking to just create liquidity pools. The argument is basically INDEX vs UNI. Although both have a liquid element where a token is created, NFT20 is really just about creating a trading market. 

Currently there are 13,335 NFTs locked in NFT20 with 199+ pools and over 5000 NFTs being exchanged this week. This is still a small project with lots of room for growth, but there’s a lot of action so far for a project that is really at the whim of a select few people deeply involved in the crypto scene. 

Users will eventually be able to utilize their tokenized positions as collateral to yield farm which should only bring more attention to the project and create more opportunity and liquidity for traders. If I’m someone who is just looking to make a buck and trade a trend, this is a great opportunity to get involved in some high beta alts. Right now, we’re seeing a resurgence in NFTs, I could piggyback on this thematic and trend by getting long one of these tokens instead of buying NFTs outright, laying out major capital, and worrying about not being able to exit the position and holding something I’m not passionate about. 

If I wanted to, I could jump on Uniswap right now, trade some ETH for MASK20, get long Hashmasks and sell it in a week or month or whenever I’m ready and never have to figure out which mask I wanted to own, or deal with the haggling aspect. 

Whereas Fractional is for the small, risk-averse long term investor, and NFTX is for the passive holder who just wants exposure, NFT20 could be for the active trader who is looking to scalp the volatility of the NFT market and take advantage of the opportunities present. This is awesome becomes it broadens out the sector and takes digital art from being this remote idea with no real purpose and gives people a vehicle to work around and make money off of, basically creating derivatives platforms and bets on the supply and demand metrics of the art world without ever having to be an art curator or passionate member of the art community. 

Alien Take

While NFTs are something that confuse me at times and concern me from a financial standpoint, since I hate the idea of parting ways with my ETH, there are some pretty cool protocols being built that enable the art world to become its only little gamified trading market. 

The whole point of crypto is to bring the world of high finance into the hands of the working class without having to worry about permission, trust or a sense of belonging, NFTs now take people from lurking in the corridors of the art world and into the limelight. 

I really like the fact that I can get a passive position in projects I like but am afraid to put a lot of money into, especially the concept of just getting long an idea as a whole by buying an index, or being able to scalp volatility, themes and trends by just buying and selling the tokenized version of these projects for quick trades. We’re in an interesting time and the world really has no clue what this industry is yet and neither do most people. Fractional, NFTX and NFT20 are carving out a niche here that can really help bring NFTs into the public’s eye and evolve this sector from something confusing and daunting into something that’s visited and utilized by everyone from passive collectors, to investors and degenerate traders. 

I currently own a couple of NFTs that I couldn’t sell, and don’t have any plans to make any big purchased by any means. But as an art lover and a passionate crypto holder and believer, I could totally see myself using some of these platforms to take advantage of the trends and just have exposure to what could be the future of art for the digital world. We’re all heading towards a metaverse, and projects like Fractional, NFTX and NFT20 will help bring us to the end goal of redefining what art really is. 

There used to be a great show on the science channel that I liked starring Michio Kaku where the renowned physicist discussed some of the craziest science fiction ideas humanity has ever known and plotted out how they could potentially come to fruition. It was truly an amazing show that I wish to replicate here on this Substack. 

I’ve mentioned on Twitter that this new series will be focused on me thinking as far outside the box as possible to break down the potential roads I can see companies taking over the course of this decade. There really is no scientific or financial backing for any of the claims I’m going to make. In fact, a lot of it can be looked at as one giant shit post covered in LSD. But I want to have some fun and see if the world follows the same path my crazy mind wanders. 

Peloton

At the moment PTON is predominantly a hardware company that sells workout equipment and has a cult-like reception from its user base. Users spend thousands on owning a Peloton bike or treadmill and never think twice about needing to spend another $13 or $40 a month for an online membership to their classes. 

Then there’s people like myself who are too cheap to buy a Peloton bike, who settled for the best competitor at the best price and signed up for the Peloton App instead to get the best of both worlds. But what if Peloton evolved from here to become more than just a gym equipment OEM that has a software offering with recurring revenue?

Health Data

So the first place we realistically should start is the boring part that’s most likely to come to fruition. Peloton will become one of the leading providers of health data which will be utilized to decrease health insurance premiums and make subscribers more attractive candidates for their health insurance companies that are running elaborate Ponzi schemes to trick Americans into believing that healthcare needs to operate the way it currently does. 

Singapore recently developed a partnership with Apple to utilize the Apple Watch and encourage lifestyle changes that reward users who are actively engaging in health conscious behavior. Peloton will follow in these footsteps by leveraging their tremendous user base, which will reach 1 in every 5 Americans, to help decrease premiums thanks to new partnerships that go beyond United Healthcare. 

This data will be stored and distributed on a blockchain and will be automatically uploaded by immutable smart contracts that are autonomously connected to the remote monitoring devices attached to Peloton’s work out equipment and revolutionary smart shoes thanks to their high end partnership with Nike. These shoes will be in high demand, completely sold out for the first year of their existence, and will go for 2-3x their retail value on the secondary market, thanks to integrations and partnerships with some of Nike’s most premiere athletes. 

Insurance companies will also be able to subsidize the costs of equipment thanks to this health data which will become politicized in order to improve the wellness of working class individuals and families. 

Because health data is a valuable asset, Peloton will now have a new stream of income that is also recurring and B2B, this will help push the stock price to $100B in market cap, coupled with their App and innovations in smart shoes and workout equipment. 

Virtual Reality/Augmented Reality

Peloton recently announced a new game that could be played with users pedaling their bike. This is the beginning of Peloton merging with the metaverse and becoming an intricate part of the AR/VR Revolution. 

Pelotons will be utilized to seamlessly move characters along the metaverse, ditching the need for controllers to be used, paving the way for haptic gloves and eye tracking technology to be the key devices and tools for AR/VR. Because shareholders will want to see their moat preserved, Peloton will buy Vuzix and utilize their patents and AR/VR glasses to transform the entire workout experience, thereby completing the 100% fully immersed gamification experience. 

Thanks to these glasses that will be no larger or obstructive than a pair of Ray Bans, a new bike will be introduced that is Peloton’s iPod Nano moment. The bike will come without a screen, be slimmer and sleeker, and only feature technology that connects to the metaverse and blockchain to stream your progress and health data. 

Users will be able to ride alongside their favorite trainers and other classmates as they travel across some of the most beautiful, tantalizing, daunting settings the Earth has to offer. Classes will no longer be just a static experience in a studio, users, trainers and classmates will be able to bike or run across any terrain they want and be fully immersed in this experience as if they were actually present. 

Peloton will also offer specialized events that have their own users competing in real time against professionals in the Tour de France and other competitions. This will of course be made possible by digital mapping techniques that stream with zero latency, made entirely possible by edge computing. 

Tokenization

Peloton will be one of the first major brands to tokenize their users as a means to incentivize them to work out more often and reach certain goals. 

Currently Peloton sees users returning with minimal churn with its core base being active multiple times a week. These users will see an increase in engagement, along with the more basic user who isn’t as intrinsically motivated, thanks to tokenization. 

Users will be able to bike/run/workout to earn, receiving rewards for their consistency and effort, as well as being able to compete against each other for certain trophies. This will blend Peloton with esports and the world of competitive fitness, made entirely possible by the metaverse and its remote monitoring devices. 

An amazing flywheel will develop with users incentivized to workout at a high level, and engage the platform at a lower level through AR/VR. Users will be able to use these rewards to fund adventures in the metaverse, pay for merchandise for their avatars and provide discounts for real life clothing. 

Peloton’s churn rate will decrease and its user base will increase. Younger generations will be roped in, bypassing gym memberships completely. 

Reality

There are no guarantees any of this comes to fruition, but when looking at what’s in development, where the world is headed and what Peloton can be utilized for, it’s hard not to imagine some of these elements becoming reality in some regard and capacity. 

I personally have a position in PTON thanks to its low churn rate with users, potential partnerships with insurers and governments, and optionality with remote monitoring, health data and AR/VR. 

The points I made here are really made for the sake of having fun and trying to think outside of the box and guess what trends could develop down the road. You as a reader should not take this as any advice and should just look at it as a fun thought exercise that is worth revisiting in the future.