brandoniles

No complexity. No accident. 10/10 was caused by irresponsible marketing campaigns by certain companies. On October 10, tens of billions of dollars were liquidated. As CEO of OKX, we observed clearly that the crypto market’s microstructure fundamentally changed after that day. Many industry participants believe the damage was more severe than the FTX collapse. Since then, there has been extensive discussion about why it happened and how to prevent a recurrence. The root causes are not difficult to identify. ⸻ What actually happened 1.Binance launched a temporary user-acquisition campaign offering 12% APY on USDe, while allowing USDe to be used as collateral with the same treatment as USDT and USDC, and without effective limits. 2.USDe is a tokenized hedge fund product. Ethena raises capital via a so-called “stablecoin,” deploys it into index arbitrage and algorithmic trading strategies, and tokenizes the resulting fund. The token can then be deposited on exchanges to earn yield. 3.USDe is fundamentally different from products such as BlackRock BUIDL and Franklin Templeton BENJI, which are tokenized money market funds with low-risk profiles. USDe, by contrast, embeds hedge-fund-level risk. This difference is structural, not cosmetic. 4.Binance users were encouraged to convert USDT and USDC into USDe to earn attractive yields, without sufficient emphasis on the underlying risks. From a user’s perspective, trading with USDe appeared no different from trading with traditional stablecoins—while the actual risk profile was materially higher. 5.Risk escalated further as users: •converted USDT/USDC into USDe, •used USDe as collateral to borrow USDT, •converted the borrowed USDT back into USDe, •and repeated the cycle. This leverage loop produced artificial APYs of 24%, 36%, and even 70%+, widely perceived as “low risk” simply because they were offered by a major platform. Systemic risk accumulated rapidly across the global crypto market. 6.At that point, even a small market shock was sufficient to trigger a collapse. When volatility hit, USDe depegged quickly. Cascading liquidations followed, and weaknesses in risk management around assets such as WETH and BNSOL further amplified the crash. Some tokens briefly traded near zero. The damage to global users and companies—including OKX customers—was severe, and recovery will take time. ⸻ Why this matters I am discussing the root cause, not assigning blame or launching an attack on Binance. Speaking openly about systemic risks is sometimes uncomfortable, but it is necessary if the industry is to mature responsibly. I expect there may be significant misinformation and coordinated FUD directed at OKX in the near future. Even so, speaking honestly about systemic risk is the right thing to do—and we will continue to do so. As the largest global platform, Binance has outsized influence—and corresponding responsibility—as an industry leader. Long-term trust in crypto cannot be built on short-term yield games, excessive leverage, or marketing practices that obscure risk. The industry needs leaders who prioritize market stability, transparency, and responsible innovation—not a winner-take-all mentality where criticism is treated as hostility. Crypto is still early. What we choose to normalize today will determine whether this industry earns lasting trust—or repeats the same mistakes again.

Thanks to this market correction, the SPOT/USDC Vault APY has surged to over 110% Generating stable, predictable yield is the holy grail of DeFi. And while this 110% APY spike comes from extraordinary market events, the SPOT/USDC vault on Charm.fi has consistently delivered impressive returns, proving its staying power across market conditions. Here is what LPs are earning right now: ➕21% APY (All-Time Average) – Solid long-term yield. ➕111% APY (Last 38 Hours) – A major spike driven by increased trading volume. ➕27% APY (Current APY of Base Pool + Bootstrap Rewards) – Boosted returns thanks to the ongoing incentives. Unlike most high-yield DeFi pools, the SPOT/USDC vault isn’t reliant on inflationary token emissions. Instead, it: ➕ Earns fees from real trading volume. ➕ Maintains a near delta-neutral position through automated rebalancing. ➕ Capitalizes on SPOT’s mean-reverting price action for consistent profits. With the recent 111% APY surge, yields will continue trending upward as the moving average catches up. Of course, $SPOT dropped ~8% in the market correction. Why LP now? Because this is all by design. SPOT has a free-floating price to maintain low volatility, not zero. Thanks to SPOT’s underlying mechanics, it’s a mean-reverting asset, meaning it will naturally return to fair value over time. So, If you're looking for real yield, explore the SPOT/USDC Charm Vault at charm.fi.

excited to chat with folks at stable summit

@brian_armstrong Congrats Brian! Massive win for the crypto world. The industry owes you and Coinbase a huge debt of gratitude for taking this all the way here.

Great news! After years of litigation, millions of your taxpayer dollars spent, and irreparable harm done to the country, we reached an agreement with SEC staff to dismiss their litigation against Coinbase. Once approved by the Commission (which we're told to expect next week) this would be a full dismissal, with $0 in fines paid and zero changes to our business. This is hugely vindicating, especially because many people questioned my decision to engage in litigation with the SEC on this matter in 2023. People told me the courts would give a lot of leeway to the government. They said public market investors wouldn't like it. They said it would take years and cost us tens of millions of dollars in legal fees (which it did). They said the agency would use mafia tactics like trying to pressure other companies not to work with us while the lawsuit was underway (which they did). But I knew a few truths that helped make it an easy decision to fight them in court: 1. The SEC was wrong on the law. They were exceeding the authority given to them by congress by asking us to delist a number of assets that were not securities. We had taken a conservative approach to ensure we weren't listing any securities, and the SEC itself had allowed us to go public in 2021 after reviewing our listing standards in depth. We tried to “come in and register” but it turned out it was a fake offer, as every crypto company discovered. Regulators are supposed to enforce the law, but they can't make up new laws on the spot if they don't like the current ones, or weaponize a lack of clarity in the law. 2. Caving to their demands could have killed the crypto industry in America. The SEC made it clear to us that the only way to avoid litigation was to delist the many assets they falsely claimed were securities. It was a bullying tactic, pure and simple, driven by Gensler's own political agenda. And if we had caved, it would have dramatically limited the scope of which crypto assets were allowed in the US, and pushed the industry further offshore, into the shadows. Never forget how close a few activists in government came to unlawfully killing an entire industry in America! It could have easily gone the other way. Thank goodness the founding fathers created the judicial branch, as a check and balance on executive power. 3. It was the right thing to do for our customers and the industry. At the end of the day, it didn't matter what our chance of success was. I had to stand up for our customers’ and our industry’s rights. I also knew it would serve as a deterrent for future bad actors around the world we may have to engage with, for them to know that we won't be bullied or pressured. We are comfortable engaging in litigation across multiple fronts, indefinitely, while continuing to build. This is business as usual. As Bain in The Dark Knight says, "you merely adopted the dark; I was born in it". Growing up I had a naive view that regulators exist to hold companies accountable. What I realized in this ordeal is sometimes, companies must hold regulators accountable who are painting outside the bounds of the law, to preserve freedom. Accountability can actually happen both ways. At Coinbase, our mission is to increase economic freedom, and I initially thought we could achieve this solely through our crypto products. But I'm increasingly realizing that we can move the needle on economic freedom in the courts and through our policy efforts as well, when we see bad actors in government around the world. We plan to do more of this. I have to give credit here to the Trump administration, for winning the election, and for the departure of the activist head of the SEC, Gary Gensler, who orchestrated this unlawful action along with Elizabeth Warren, and a handful of their lackeys in congress. I feel confident we would have won this case in the courts either way, given our facts were so strong, but it certainly helped accelerate the process and drive accountability. I called out the sketchy behavior of the SEC back in 2021, and I believe this comment turned out to be prescient. I want to give a shout out to all the other crypto companies who fought back with their own lawsuits (we certainly were not the only ones). I want to give a shout out to all the crypto startups who couldn't afford the legal fees, and went bankrupt due to the administration's abusive tactics. Your company may have died, but crypto lives on. Don't stop building. I want to give a shout out to both Democrat and Republican members of congress, who are working hard to ensure America leads on crypto. I know that Gary Gensler and Elizabeth Warren do not represent the entire Democratic party. And I want to give a shout out to all the crypto holders in the US who elected pro-crypto candidates, on both sides of the aisle, to make sure your rights were preserved. It turns out the crypto voter is real, and showed up in the millions. Finally, I expect we'll continue working productively with the SEC on any number of items over the years, just as we do with every agency around the world where we operate. I look forward to the SEC being reformed under Paul Atkins, Mark Uyeda, Hester Peirce, and DOGE, and new more sensible personnel coming into leadership roles. I commend the new leadership that is already in place for working to right this wrong - it's a great step in the right direction, and took courage. Now let's get some crypto legislation passed in the US to finally clarify the rules, and really kick off this next phase of building.

USA.d & USDaf: up next.

Operation Bootstrap is unstoppable. ➕More choice. ➕More rewards. The second vault is now open for deposits. Stratosphere, currently 389% APY. bootstrap.spot.cash/stratosphere

The recording of our second episode of the Ampleforth➕Zoomed Out show, with @brandoniles, @evankuo, and our special guest @plainfran. twitter.com/i/broadcasts/1…

Join us for our next Ampleforth➕Zoomed Out video spaces on January 30th with @evankuo, @brandoniles, @sidahimsa, and special guest @plainfran.

$10 MILLION in AMPL Rewards. Bootstrap the Evergreen Cycle ∞ spot.cash/staking/ Starts a Flywheel ➕ Ends Inflation

Starting now, come join us!

Introducing an entirely new show with a fresh format and a different approach. Ampleforth➕Masterminds will premiere its first episode with @evankuo, @brandoniles, special guest @virtualbacon, and host @sidahimsa. Join us live on January 16, 6:00 PM UTC.

PARTNERSHIP: What if crypto could truly shield you from inflation? Meet @ampleforthorg decentralized unit of account architected by top-tier engineers and backed by industry giants like Coinbase Ventures and more. Unlike assets like BTC, ETH, or stablecoins, AMPL algorithmically adjusts to market demand, maintaining your purchasing power. No fixed price — just adaptive economics. It's naturally scarce, like gold or silver, aligning more with money's historical roots than speculative assets. For the first time since 2009, cryptocurrency might truly function as money, not just a speculative asset. Find out more on cjn.link/ampleforth and tune in to their live show at 12:00 pm EST. Disclaimer: This is a paid partnership, DYOR as this is not financial advice.

As our root network expands—it's time to behold the growth phase of our next cycle. 📹A live video space, with @MarioNawfal X @AmpleforthOrg tomorrow 📍at 17:00 UTC. Tune in to uncover the next meta. 🌌

I'm at DevCon! More than happy to meet if you're interested in a mortgage-based, AfterPay DeFi protocol for the average crypto user. Here with @SocksNFlops and @0xYissey, building @ButtonDeFi . We'll be live in the next month or two--hit us up if you're interested in building or partnering with us. Why build Buttonwood? For young people crypto is as important as real estate; 94% of crypto users are 18-40 yrs old. However, the average 12-month purchase amount is $6,000-10,000. Most users are not whales. Average users thus struggle to gain exposure. They're caught between DCA and margin. DCA is suboptimal because you're buying an asset with higher average returns over long duration, thus driving up your cost basis. Yet with margin you get liquidated, even at low levels like 50%--something like 30% of the time with BTC! The solution is obvious--a peer-to-peer protocol for "mortgage-like" crypto purchases. Boomers didn't buy their houses all up-front. Why would we expect GenZ and Millenials to buy half a BTC all at once? Decentralized AfterPay. The better way to buy crypto. Users pay 50% now in USDC, and pay the remainder over 3-5 years. Originators receive a fungible, yield-bearing credit. It's not fool-proof, but vastly superior to anything else out there. After 3 years, duration washes out most of Bitcoin's volatility, for example. We've built some other cool things before--Tranches, a liquidation-free leverage protocol, a web3 bond market. But we think that mortgages of this sort are the superior evolution of P2P credit for the average user. Come build with us. P.S. I've also been lucky enough to contribute to @AmpleforthOrg and the flatcoin @SPOTprotocol --go check out some futuristic, inflation-proof money! Give them a follow and a look.

@mrinconcruz Polymarket is an aggregation of other analysts tho 😅 Just saying that 50-50 is a concrete prediction that carries information, and it would take way more than one sample to show a 60-40 model is better or worse than a 50-50 one with any confidence

@brandoniles Well, I think he's more like a stock analyst who doesn't have a good answer, and instead of saying "I don't know" gives an answer that allows him to claim he was right no matter what happens. Though would anyone believe a stock analyst that merely aggregates other analysts?

Before polling there were prediction markets. As the era of polling ends, prediction markets rise again. RIP polls 1940-2024 We will wonder how these "experts" with a so-called "science" ever tricked us into believing they could beat out decentralized, aggregated knowledge.

Tune in for this tomorrow, 3pm PT. Should be a great conversation with the @asymmetryfin founders!

I'll be on this tomorrow with @evankuo and the awesome team at @asymmetryfin. Be sure to tune in!

Very excited about the coming launch of USDaf. Will be awesome to see SPOT functioning as a low volatility collateral-asset @AmpleforthOrg