DkNinja

@duonine That's a lot of words of being completely wrong

🚨 Why are crypto ponzis always related to new stablecoins? A long post. ▫️ Buy 1 ETH for $3,000 ▫️ Stake ETH into stETH ▫️ Turn stETH into wstETH ▫️ Use wstETH to mint mkUSD ▫️ Use mkUSD to borrow more ETH ▫️ Stake ETH into stETH... This is how you create magic money and turn 3k into 30k. You double, triple, quadruple count the same collateral aka leverage it. DeFi's total market cap pumps dozens of billions overnight in a bull market and also crashes 90% in a bear market because of it. It's all FAKE money. You create more "money" from nothing and stablecoins are a key ingredient in that recipe. They allow you to leverage up, fast. This is no different than fractional reserve banking where your $3,000 bank deposit turns into $29,999 new money created from thin air. To achieve such a feat, it takes 100 cycles of deposits. See my picture. Crypto never reaches 100 cycles, because the bubble bursts sooner rather than later. Fiat "economists" even call this process a "business cycle". A more appropriate name is a bubble driven by ponzinomics and irresponsible money creation due to greed. If you read crypto twitter, you will see people talk about liquid staked tokens (LST like stETH) and liquid re-staking tokens (LRTs like reETH) as the next best thing in crypto since sliced bread. WRONG. It's the next big bubble or ponzi. EigenLayer should not excite you, it should WORRY you! If you seek an alternative view, then hit a follow @duonine to stay updated as this bubble develops. Once you start seeing this "amazing" new LRT token being used to mint stablecoins on your X feed know that the bubble is about to reach its peak. The higher the market cap of those new shinny stablecoins backed by LRTs tokens, the bigger the bubble. Remember, $3,000 is the actual collateral for $30,000! That's a 10x leverage. If ETH is 3k and it crashes by 10% or $300, the bubble deflates by 3k! That's 3k gone in your new shiny LRT stablecoin! Such stablecoins will go to zero in the worst case scenario. This is how a liquidation cascade starts and panic begins. Why does this concern me? Because it will hurt native ETH holders that don't even stake their ETH. Picture this. Let's say the LRT bubble grows to $50 billion. Actual backing? $5 billion in ETH or even less. How exactly can $50 billion exit or sell at a profit using $5 billion of ETH collateral? It can't. What happens next is people get wiped out. LST and LRT tokens crash vs ETH's price by 10%, 50% or more. Any stables backed by LST/LRT tokens depeg and crash even more. In the process, as $50 billion of fake money wants to exit, it will drag down ETH's price beyond a normal correction or crash. ETH is the liquidity of last resort for LST/LRT tokens. Worse. It will drag down BTC's price as well. Because people will become DESPERATE to exit at ALL costs, even if they lose 50% of their money or more. BTC is the liquidity of last resort in crypto, just like the Fed for USD. This is why bear markets are BRUTAL. They correct such imbalances. They are necessary and do well to punish such greed. Don't believe me? Have you heard of Blast L2? That's an ENTIRE network that will use LST tokens and stablecoins backed by LSTs to give its users "native yield". Those users have no idea what's coming in the next two years and they deposited BILLIONS on Blast L2. Projects always seek to create more yield to attract users, but that comes at the risk of an entire network like Blast going insolvent if they don't control their greed. Do you trust them to put breaks on making free money? In the last crypto cycle, Terra Luna UST imploded to 0 from $50 billion. It also used a stablecoin for their project. It double, triple, quadruple counted the same money while pretending it was real. Greed took over. You need to EXIT early and well before that $5 billion in real collateral is gone. Cash out and don't ape back. That includes removing all assets from networks like Blast L2. You are only safe on NATIVE chains like ETH or BTC. This time, the bubble will use ETH LRTs and associated stablecoins. I'm concerned and few people will write about this because it puts a break on this bubble and greed. I've seen too many crypto cycles repeat the same story. This is nothing new. At the end of the day, crypto is a free for all. There's no regulation, but at least we can educate. Why risk your ETH for 3-6% yield when ETH will 2-5X this cycle? Funny enough, this LST/LRT bubble will also be the reason ETH will pump hard because all those tokens will LOCK-UP ETH as collateral in a huge pyramid. When Vitalik decided to take Ethereum from Proof of Work to Proof of Stake he enabled and allowed the creation of such ponzimonic mechanisms. For this reason alone, Bitcoin is superior. Don't be fooled by this market and don't let greed take over. It ends badly. Hit a like and retweet this message to wake up more people and don't forget to follow me @duonine P.S. I respect anyone building in this space and any examples or tokens mentioned above are used for illustration purposes only. What will eventually happen, we will all find out, but let's call it as it is.

@elonmusk Oh dear... The CEO of twitter thinks operating a public platform with user generated content is just about hosting costs. 😅

Have you ever wondered why the Wikimedia Foundation wants so much money? It certainly isn’t needed to operate Wikipedia. You can literally fit a copy of the entire text on your phone! So, what’s the money for? Inquiring minds want to know …

😴

@MichaelHyatt @Techgnostik @elonmusk That is literally not a balance sheet and lists income and expenses, lol

@Techgnostik @elonmusk That’s just a balance sheet. Can you post the P&L?

@binance @FirstDigitalHQ Does the collateral come with a certificate of confiscation from Beijing?

#Binance will list $FDUSD FDUSD is a 1:1 USD-backed stablecoin issued by First Digital Labs. Reserves of FDUSD are held by First Digital Trust Limited, @FirstDigitalHQ, a qualified custodian and registered trust company headquartered in Hong Kong. Learn more about it here 👇

Merlin will be launching in the next few days, are you ready to quest for $MAGE? Permission-less. Immutable. Capital-efficient liquidity architecture. Merlin is the new paradigm of DEXs, only on @zksync 🧙‍♂️

@Todd_Spence I can print a high def replica of the Mona Lisa any time I want, does that make Mona Lisa worthless? Since when was owning art about making the art unable to be replicated? The only thing that matters is that it isn't counterfeit, whether it's digital or physical.

Keanu Reeves laughing at the concept of NFT’s makes me like him that much more.

@SGCFinests @cryptosandicos @Todd_Spence 1. When you buy a physical painting, the artist still owns the copyright. 2. A physical painting can also be easily replicated. Counterfeits exist both on and offline. 3. OpenSea and Rarible can stop displaying your NFT on their website, they cannot delete your NFTs.

@cryptosandicos @Todd_Spence 1. I own crypto 2. I will never buy a JPEG without the rights of ownership being transferred to me. 3. If not properly set up, NFT buyers could get in legal trouble if they creators deems them to be violating copyright law. 4. OpenSea and Rarible can delete your political NFTs.

@LunaCorgi_ It's not a misconception, I've made plenty of posts explaining already so I won't repeat myself. It's the denial that's getting old.

1/ For those of you following the collapse of $IRON / $TITAN on #Polygon, here’s my take on what happened. Fair warning, this is a long thread. @IronFinance @fraxfinance

Clam NFT presale is live! Captain Nacre and Diego will guid you through the process. Good luck! clamisland.fi #DeFi #BSC #NFT #Collectibles

@profNFA This is no different from $TITAN or $FXS insofar as their partial collateralisation role is concerned. What happened to $TITAN can happen to $LUNA if the liquidity of $LUNA falls too far short of being able to collateralise $UST.

@profNFA $LUNA can allow redemption of 1 $UST against $1 worth of $LUNA instead of a specific amount of tokens, because it is in control of its own tokens (i.e. it can just print more to compensate). That means $UST is collateralised by the the entirety of the available $LUNA liquidity.

Horrendously wrong, Luna is not collateral for Terra stablecoins. All Terra stablecoins are NON-collateralized, keeping peg with a dynamic supply mechanism through Luna. There's no risk mitigation by posting a collateral asset(DAI). It's also not a tokenized fund(USDT).

@profNFA But, none of this changes the fact that $UST is collateralised by $LUNA.

@profNFA The difference is that $LUNA has more use case, so it's possible for external buy pressure to help alleviate some of the sell pressure from $UST redemption. That's the reason why $LUNA focuses so much on use case.

@NoMoreBear1 Well that was an incredibly ironic comment

I seem to have offended some $LUNA / $UST fans. Let me make this clear. The "balancing algorithm" for $UST uses $LUNA as its collateral. It is literally the exact mechanism used by any collateralised stablecoin.

Dress it up however you like, UST is collateralised by LUNA. This shouldn't even be arguable.

Now let's flip the question. Think of FRAX at 0% CR. When you burn $1 of FXS to mint 1 FRAX, with the promise that you can burn 1 FRAX for 1 FXS later, how is that different from UST / LUNA?

Let me ask this - what do you think you're doing by burning LUNA for UST, with the promise that you or anyone else can burn UST for $1 of LUNA later, if you are not putting up LUNA as collateral for UST?

@profNFA Theoretically you could be 50% undercollaterised and still holding peg, IF there is no mass sell off / redemption of the stablecoin.

@profNFA Also, the underlying asset losing value doesn't necessarily break the mechanism. It's when mass exit follows that event, causing the collateral to become insufficient to prop up the peg. That's when a bank run happens.