Eldar

If you build something valuable on Tempo they WILL fork and deplatform you. Don’t believe me? Ask anyone who built something valuable on Facebook or Twitter back when they were “open” $ETH can’t deplatform you. Even if they tried

I think there’s an interesting space between “gambling” and “finance” that has finally begun to mature. It probably goes back earlier, but really seems to have exploded with meme stocks and memecoins. In recent months, I’ve begun to refer to this territory as “finance entertainment” since it has a good analogue in “sports entertainment” - those semi-competitive exhibitions like pro wrestling, Ninja Warrior, or even the Harlem Globetrotters that prioritize entertainment but nonetheless do require serious athletic abilities and skills. Coming onto MegaETH and getting to dig into the app ecosystem, I find apps like Hit One and Euphoria to be more refined, highbrow options in this space that I personally can see the appeal of. It’s made me also appreciate that memecoins were not, in fact, just a casino, at least for some users. I think I and others were slow to recognize this because, as I explained in the QT below, gamblers, investors, and traders all swim in the same waters, and the high visibility of gamblers masked the dopamine-seeking-but-still-serious traders that participate in memecoins. The key distinction from gambling is that there has to be a credible thesis to get a positive return, usually through speculation as a mechanism to move assets through time from periods of relatively low demand to periods of relatively high demand. And this middle territory is naturally separated from regular finance by a soaring mountain range of boring UX and no attempt at providing actual entertainment (that’s not pure gambling). I’m still developing my thoughts on who the natural consumer-investors of finance entertainment are. My priors are that it’s a kind of trader that would try to make money in other ways if the experience wasn’t fun or gamified. I’m also not aware of much serious investigation, whether inside crypto or outside, into this blend of consumption and investment activity, although clearly Robinhood has leaned into this and may have some internal research. If anyone has credible data or research on finance entertainment, please drop it in the comments or my DMs. And while I try to only rarely make predictions, I suspect this new generation of finance entertainment apps will end up partly being spectator sports. It’s easy to imagine a kind of Twitch-style streaming of Hit One trades.

Private Credit Panic: What To Actually Worry About A clear framework for understanding credit losses in private credit products 1. The Panic Blue Owl gates its $1.6B fund. ACRED shows negative monthly returns. Headlines scream "private credit crisis." Anyone saying private credit is blowing up. Most of them don't understand the difference between a paper loss and an actual loss. This article explains what's actually happening - and what you should actually worry about. 2. Two Definitions You Need Spread Tightening: Market demands less compensation for risk. Prices go up. Investors are comfortable. Spread Widening: Market demands more compensation for risk. Prices go down. Investors are nervous. That's it. Everything else follows from this. 3. Two Types of Loss Every credit product can experience two completely different types of loss: 1. Mark-to-Market Loss . Paper loss from repricing. The borrower is still paying. The loan is still performing. But if you had to sell it today, you'd get less than you paid. 2. Default Loss - Real loss. The borrower stops paying. You lose principal (minus whatever you recover in bankruptcy). These are not the same thing. Mark-to-market loss is temporary - it reverses when market sentiment improves, or it gets absorbed by yield over time. Default loss is permanent. Most of what's happening right now is mark-to-market. Not default. 4. How Private Credit Gets Marked Private loans don't trade on exchanges. So how does anyone know what they're worth? Fund administrators mark them monthly using liquid comparables. Here's how it works: Admin looks at what similar public bonds are trading at If high-yield spreads widened 80bps this month, apply that to the private portfolio Mark down the NAV accordingly The borrowers are still paying. The loans are still performing. But the market is saying "I'd want more yield if I was making this loan today" - so existing loans at lower rates are worth less. This is pure market sentiment, not credit deterioration. Important Distinction: Not All Marks Are MTM Not all private credit marks are mark-to-market adjustments. Some loans are marked to zero - meaning they've actually defaulted or become non-performing. This is a real loss, not a paper loss. The distinction matters: 1. MTM marks reflect sentiment and spread widening. Temporary. Borrower still paying. 2. Zero marks reflect actual credit events. Permanent. Borrower stopped paying. The recent volatility in headlines is predominantly MTM - spread widening from macro fears, not a wave of defaults. 5. The Duration Math When spreads widen, how much does the NAV drop? Simple formula: Mark-to-Market Loss = Spread Widening × Duration Duration is roughly the weighted average time until you get your money back. Example: Portfolio duration: 2 years Spread widening: 80bps (what happened Q1 2026) Mark-to-market loss: 2 × 0.8% = 1.6% The NAV drops 1.6%. But the borrowers are still paying the original coupon. Nothing fundamental changed. Severe stress example (COVID March 2020): Spread widening: 600bps Duration: 2 years Mark-to-market loss: 2 × 6% = 12% That's a 12% NAV hit in a month. But COVID spreads recovered within months. If you held through it, you were fine. 6. Two Paths to Recovery When mark-to-market losses happen, there are two ways to recover: Path 1: Spreads Tighten Market sentiment improves. Your loans get marked back up. NAV recovers quickly. This can happen in weeks or months. Path 2: Duration Plays Out Spreads stay wide. But you keep collecting yield. Over time, the yield accrues and absorbs the mark. If your portfolio yields 10% and you took a 2% mark-to-market hit, the yield covers that loss in about 3 months. Either way, if borrowers keep paying, you get your money back. The mark is temporary. The yield is permanent (unless default). 7. When Mark-to-Market Actually Matters There's one critical exception. Mark-to-market doesn't matter if you hold to maturity. You collect your coupons, you get your principal back, the paper loss was just noise. Mark-to-market does matter if you need to exit early. You'll sell at whatever price the market offers - which might be less than you paid. This is exactly what happened to Blue Owl investors. The underlying loans were fine - Blue Owl sold them at 99.7 cents on the dollar to CalPERS and OMERS. But retail investors who needed liquidity couldn't wait. They were stuck. The problem wasn't credit quality. It was liquidity architecture. 8.What To Actually Worry About If mark-to-market is mostly noise, what's the real risk? Default rates. When borrowers stop paying, you lose principal. How much you recover depends on where you sit in the capital structure. 1. First lien senior secured typically recovers 70-80% in a default. 2. Second lien drops to 40-50%. 3. Mezzanine is 20-30%. 4. Subordinated debt? You're lucky to get 0-20% back - you only get paid if there's anything left after everyone above you. Current default rates in private credit are around 2-3%. This is normal. Not elevated. The spread widening in Q1 2026 is about macro sentiment - tariff uncertainty, recession probability rising to 30%, AI disruption fears. It's not a wave of defaults. Watch default rates, not spreads. Spreads tell you what the market is feeling. Default rates tell you what's actually happening. 9. How To Evaluate A Credit Product? When looking at any tokenized credit product, ask these questions: 1. What's the duration? Higher duration = more sensitive to spread moves. A 5-year duration portfolio will swing much more than a floating-rate portfolio with 0.25-year duration. 2. What's the liquidity architecture? Can you exit when you need to? What's the redemption process? Is there a mismatch between liquid wrapper and illiquid assets (the Blue Owl problem)? 3. What's being marked and how? Liquid daily? Illiquid monthly? Understanding the marking methodology helps you interpret NAV moves. 4. Where does it sit in the capital structure? Senior secured has better recovery in default. Subordinated takes the first loss. 5. What's your time horizon? If you're holding for 2+ years, mark-to-market volatility is noise. If you need liquidity in 30 days, it matters a lot. The Bottom Line Most of what you're seeing in private credit right now is mark-to-market - paper losses from sentiment, not real losses from defaults. If you hold to maturity and borrowers keep paying, the marks don't matter. The yield accrues. The NAV recovers. If you need to exit early, the marks do matter. You'll sell at market price. The real risk is default. And default rates are still normal. Don't confuse market panic with actual credit deterioration. They're not the same thing.

the thing i learned earliest in my crypto journey is that to really really scale a decentralized network, you have to avoid consensus. that's what drove me to L2 scaling. L1s can support agreeing up to a certain number of bytes per second, and hopefully that's a high number on a geodistributed validator set. but to go higher, think 1M-1B payments per second that anchor on a blockchain for security, you need to leverage the offchain world and use the L1 for settlement and coordination. that can be an L2 like an Ethereum rollup or a validium, or a channel. it can also be a shard, in the traditional database sense although that proved to be difficult for many reasons. i am excited to finally see the physical limits of blockchains to be hit, so that the offchain tech we've iterated on for years flourishes even more than it has already.

think L2s have overcorrected to be underrated atm especially if you have a neutral base layer like Bitcoin or Ethereum, they make a lot of sense if you don't care to play politics or incentive games them not scaling well is mostly a skill issue that's easily fixable

Users of the Frontier Elixir USDT vault on Plasma impacted by the Stream/Elixir incident will receive approximately 80% recovery on their positions. Claims are available now through the Elixir recovery portal. Please read this thread for more information.

The problem Unichain faced was that it had no purpose to exist and also lacked any differentiation that could credibly support a future purpose. As was also noted in many private conversations, it seemed really strange that a protocol that hoards liquidity would *pay* users to fragment liquidity by moving to its L2. My personal opinion is that Unichain was a symptom of Uniswap Labs and Foundation falling prey to “March of Dimes Syndrome”. For those unaware, the March of Dimes was originally founded to raise money to cure polio. Once the polio vaccine was available, it suddenly had no reason to exist. Rather than wind down, it pivoted to focusing on preventing birth defects and improving prenatal health. Building Unichain without a clear value proposition or differentiation other than a brand name feels a lot like Labs + Foundation tried to find something to do since Uniswap v3 was already the dominant DEX in DeFi. Although, in fairness to Unichain, they were expecting Optimism’s Superchain interoperability to be online and begin with Unichain and Optimism. That never materialized. But it still wouldn’t have provided a clear reason for the chain to exist or how it was different from any other generic DeFi chain.