DeFi^2

Rank #1 on the yearly leaderboard for yet another consecutive year in a row. Bear markets, bull markets, sideways, doesn’t matter to me. Study simply being built different.

Haven’t seen anyone else talk about this yet, so I wanted to bring up an alarming governance vote by World Liberty Fi this month that appears to be the start of a slow extraction of value from WLFI holders by the team: What you see above appears to be a rigged vote, where the majority of top voters are indicated to be team wallets or strategic partner wallets by Bubble Maps. This is in contrast to the real voters lower in the screenshot, who have all been locked from accessing their WLFI tokens since TGE, and unable to vote on an unlock until the team allows it. Instead, the team created the USD1 growth proposal shown here, which at first glance reads as fairly mundane. But it raises the question: why would the team go out of their way to force this vote through, instead of voting on the WLFI token unlock that the majority of holders are asking for? The real motivation becomes clear when you recall the fine print that WLFI holders are not entitled to ANY protocol revenue at all. According to the WLFI Gold Paper on the World Liberty Fi official website, 75% of protocol revenue goes to the Trump family, and 25% goes to the Witkoff family: It’s actually as crazy as it sounds: the team is forcing a vote to sell WLFI tokens at the expense of locked holders, in order to fund protocol revenue that goes only to themselves. This vote was actually failing by the time it reached quorum with a majority of votes rejecting the proposal, until the team / partners forced the vote through. For context, the WLFI team is allocated 33.5% of all tokens and strategic partners another 5.85%, while the public sale was allocated only 20%. Following the vote, we can see fresh transfers such as this one of 500 million WLFI tokens to Jump trading, while investor WLFI allocations remain forcibly locked: Now that WLFI emissions are increasing, it's difficult to see the intrinsic value behind a 17 billion dollar token that has no real governance power, no revenue share, and new foundation sell pressure occurring for their own benefit. I have held short positions on WLFI on and off since pre-market prices above 0.34, and believe it will continue to drop over a longer timeframe due to dilution, intentional extraction, and other factors related to Trump's final term in office.

Here at $86k, this is the first time in a while that BTC feels very nice to me to add for long-term accumulation. BTC trades as a high-beta risk asset on shorter timeframes when equities are weak, but long-term it continues to decouple upward as the world’s choice of digital gold with increasingly scarce supply. Don’t make the mistake of confusing the two investment timeframes when deciding to stack.

For the first time since its nonstop grind down from $17B fdv, I bought some plasma. Since yesterday’s market selloff it has been one of the few coins showing strong relative PA, suggesting finally an exhaustion of sellers; I believe the Cobie thesis may be ready to play out here

It was indeed the scariest chart in crypto.

Supported by 'thoughts and prayers' type of energy

This is one of the scariest charts in crypto and you can't convince me otherwise.

Orderly is still so cheap that its staking APR from just a portion of its fee revenue is consistently over 40% without using any token emissions or points to incentivize trading volume. People have become so accustomed to assuming that any high staking yields are padded by token emissions or points farming that they often just glance over it- but in this case it's literally doing $17 Bil a month in volume organically and un-incentivized. The project also just passed a governance vote to begin using up to 60% of fee revenue to perform open market buybacks, which starts this month. Honestly there's not even much else to add on this point because it's just so clear cut; the market hasn't properly priced in growth potential here at all despite the number of Orderly DEXes starting to increase exponentially and the revenue APR already beating every other top competing perp DEX protocol relative to valuation.

If you’re having a hard time understanding why KOL’s would want to launch their own perp DEX, you should take a look at Aden, another Orderly launched DEX from one of the largest Korean KOLs, which has done about $13bil in monthly volume, earning him millions in fees. It has effectively become a modern way for creators and their audience to trade on the same venue while keeping all fees in-house instead of the audience paying them to 3rd party exchanges. In a sense it’s like a modern replacement for ref link income, while allowing the influencer to give kickbacks and rewards to their most important followers. Since it costs nothing to launch, it has the potential to become an extremely viral form of monetization among KOLs, and isn’t actually fragmenting liquidity or volume since every KOL’s DEX traffic is sourced to/from the same Orderly books.

Virtuals ran to 5 billion+ over the course of the agent meta. Orderly, the functional equivalent for perp dexes, has no competition in its lane and is seeing large KOLs launching new Orderly powered DEXs daily, while still at just $350M FDV even after new Binance + Upbit listing.

Large accounts impressed by the performance of a certain trending perp dex, not realizing it's entirely powered / built on Orderly (which takes a share of all fees). This is the narrative equivalent to selling pickaxes in a gold rush.

So the SEC update to accelerate the timeline of ETF approvals creates one of the wildest narrative overlaps I've seen in a long time on AVAX specifically. Like nearly black-swan level convergence of ETF approval + close to $1 billion DAT bid coming at almost the same time. The latest expected numbers I'm hearing right now are $800mm in up to 80% cash bid from the Dragonfly AVAX DAT, and an additional $300mm in over 50% cash bid from the Hivemind DAT (which literally closes tomorrow). Contrary to initial reports, a majority of this is reported to be open market bids, with only a portion purchased from the foundation (which may still be used to later buy spot the same way Ethena did as well). To put this in perspective, $800mm of buying pressure at current market cap / daily volume would be the functional equivalent of nearly $10B of SOL DAT buying, now while simultaneously expecting one of the first ETF approvals since Ethereum to come imminently. I went through the full list of coins with CFTC regulated futures, and as far as I can tell, AVAX is the only included coin that isn't extremely high market cap but still has the ability to successfully raise DATs & hasn't yet spent their DAT raise. So far it's become apparent that no amount of front-running has been enough to offset the actual impact of any of the DAT buys, with the effect literally doubling the price of Worldcoin and Eth, and Sol still moving straight up despite being known well in advance. I expect this to ultimately be the case here as well, and even just on technicals alone this looks like a clean run to $40+.

Quick followup discussion to my last post, on Trump related coins in general. It shouldn’t be surprising to anyone that holders of large locked WLFI allocations would want to sell even at a large discount. The fact is that all Trump related coins suffer from the same massive existential issue. When Biden withdrew and ended the chance of another term, the Boden memecoin, which peaked around $1 billion market cap, sold off an incredible 99.9% to just $1M market cap, essentially worthless. In a similar fashion, with each passing day we approach the end of Trump’s final term, which we’re likely to see reflected as a linear decay in price with time- and WLFI doesn’t have a definitive date of unlock, or even a guarantee that this will occur before end of Trump's term. The lack of unlock date further makes it entirely impractical to hedge using perps, as it may mean the capital is unusable for potentially years, all while subject to risk of squeeze. WLFI is an interesting case because it's a fairly consensus opinion that the current price is artificially high due to limited circulating supply and well executed marketing around a 20B valuation. After all, why should the tokens of various family members trade multiples higher than Trump’s own coin? Melania token was one testament to this. Even in terms of value from utility, top DeFi protocols like aave trade at just 4-5B valuation, much less 20B. And in an environment where the use of the blacklist tool to bankrupt various holders is frequent and subjective, it seems common sense to use a different DeFi protocol instead. Despite this, traders aren’t necessarily wrong to go long to bet on the upside of squeezes given the low real circulating token supply; the team inevitably has plenty of news / product releases lined up to facilitate favorable short term price action. However, I believe traders are still largely under-weighting the downside risk of an almost endless litany of price ruining events, which ironically would price in faster than usual due to the thin float. Term impacting health issues are one big risk here- with Trump set to be the oldest sitting president in American history, virtually any major health scare will translate to price instability for Trump coins, converting their price action into an unintentional Polymarket of odds of term completion. Furthermore, any news at all about a date for the remaining WLFI unlocks enables well capitalized holders to begin shorting perps to hedge their positions, which they are incentivized to do here to frontrun Trump’s end of term. Think of it like theta decay where your value decreases daily, except that in this case you’re told that you might not even be allowed to exercise or sell your option prior to expiry. This means that the natural incentive for practically all investors is to bet short term, take profits quickly on squeezes, and never become longterm holders. In most cases this leads to continually unfavorable / choppy price action, and a constant mean reversion back down from any prices above the 20B psych level over and over until it ultimately doesn't hold anymore, and results in price blowout. Just my brief thoughts from a price dynamics point of view, and why at its core it’s inevitably unfavorable to longterm holders. For what it's worth, I've taken the long side of trades here a few times as well, but it requires threading the needle fairly carefully, and treating almost all news / product updates (which we're likely to see soon) as sell-the-news events.

So I checked with an OTC contact on this one, and apparently it's actually verified / real. During the same time period that Justin Sun was blacklisted from selling, a different World Liberty team advisor was actively trying to sell over 100M tokens at just 5 cents per token.

@saliencexbt The implication to me is that this is a different person, because this OTC sale continued shopping for offers even after the blacklist occurred. The blacklist simply gave them a more preferential price to OTC at.

Gm! Been touching snow for a bit since flattening the books in Jan, but wanted to pop my head in for a bit to share an interview I recorded with @thiccyth0t on the evolution of my edge in crypto since 2015.

Gmoas.

@Bluntz_Capital Nice trade 🫡

@DefiSquared thanks for the liquidity

Regardless, AIXBT is the single strongest performing agent related coin since my first post on it. There's really no debate about the relative strength it has to the rest of the agent space.

Most people missing the point here- if you have two agents with similar valuations and high beta it presents a pair trade that other assets don't have. Comparing zerebro to non-AI makes no sense, because the only asset you should be benchmarking it to is similar AI

There are agents, and there are chatgpt wrappers. Succeeding in crypto x AI this cycle isn't about being blindly long in the face of nauseating volatility, it's about betting on the real tech while simultaneously betting against the gimmicks.

@ZeMirch Eh, attitudes get super toxic when vibes are bearish, and I don't appreciate having to pull out receipts to prove my trades.

@DefiSquared its aight man im just playing, you a legend