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OT: Defi

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JungRebel

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Aug 23, 2012
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PSA for those who want to get into Defi but dont want to pay ETH gas fees. Pancakeswap on the BSC chain is planning to roll out PSV2 soon with a deflationary mechanism on CAKE. If they play their cards right I could see them threatening UNI for market cap as ETH gas fees are simply unsustainable at this point for most of us who are still fairly new to this space.

A lot of chains (looking at you ADA) have promised this functionality for a long time but some are already delivering. If BSC being centralized has you concerned the Harmony chain just had a release (Viperswap.io) that displays the power of Harmony. PoS, 2 second finality, txs for fractions of a cent, sharding, smart contracts, Defi, etc. is all live on this chain RIGHT NOW. This is what ETH should be. The dev is anon so DYOR and beware but he/she is working with the Harmony team and they are endorsing the project. The dev is planning to roll out a BSC swap soon with a similar emission plan that will be cross chain ready between Harmony and BSC.

Exciting times. Outrageous ROIs. Is it a bubble or is the world ready to buy into a new banking system and stock exchange? One where instead of paying some market maker transaction fees to provide liquidity YOU and millions of strangers worldwide provide liquidity and collect the transaction fees - the user keeps the change. Any synthetic token can be minted - want to mint a token that tracks the S&P 500? Pony up the liquidity required to make a pool and viola - a new stock market on a DEX is invented, where you can trade synthetic stocks, ETFs, bonds, crypto, ANYTHING that has a real world correlate can be tokenized, exchanged, borrowed against, spent and lent. Tokens can be used for you name it, from tokenizing the world currencies and creating a Defi forex to wagering on the outcomes of sporting events. The technology is there, the question is what governments, consumers, and the financial sector are going to do about it.

Cant wait to see where it goes and with new chains launching mainnets making it possible every month I think Defi is here to stay.

Liquidity pools can be read about here: https://coinmarketcap.com/headlines/news/liquidity-pool-providers/
 
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JungRebel

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Aug 23, 2012
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I will wager that a decentralized synthetic token exchange named Pickleswap will exist before the end of 2021. It's the way things are going.
 
dorndawg

dorndawg

All-American
Sep 10, 2012
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MSU124

Redshirt
Dec 7, 2008
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I’ll have to check this out. I wanted to try with $100 because I don’t understand it but the gas fees were way too high.
 
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JungRebel

Redshirt
Aug 23, 2012
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And no way to make passive income from it unless you lend a CeFi project your keys or... join a DEX with a BTC pairing. BTC is a terrible currency and has no use case past a store of value. No utility, no privacy, high fees, proof of work - it is old technology. If the store of value argument fails then BTC fails. I respect that Satoshi set us down this path and I understand it is in its infancy as a store of value, but as far as tech goes it is now borderline ancient.

You say less risk but is it true? The argument is based on historical performance but the history isnt old enough to even be called history.
 
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idog

Freshman
Aug 17, 2010
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useful digital currency definitely seems to be coming in some form but it won't be a deregulated version. i read an article yesterday that basically said as soon as we have a central regulated digital exchange then the value of bitcoin and its smaller equivalents will vaporate overnight. lots of headlines out recently about outlawing BTC in the USA. before you say it, the goverment aint worried about Tesla stock or ETF's more than they are worried about people paying their taxes. i think it's pointless to say but you can color me a skeptic of your virtual world of monetary wizardry.
 
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Quincy A. Wagstaff

Redshirt
May 28, 2020
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JungRebel said:
And no way to make passive income from it unless you lend a CeFi project your keys or... join a DEX with a BTC pairing. BTC is a terrible currency and has no use case past a store of value. No utility, no privacy, high fees, proof of work - it is old technology. If the store of value argument fails then BTC fails. I respect that Satoshi set us down this path and I understand it is in its infancy as a store of value, but as far as tech goes it is now borderline ancient.

You say less risk but is it true? The argument is based on historical performance but the history isnt old enough to even be called history.
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When something appreciates 200% annualized I'm not taking on outsized risk to chase yield.People will be asking you.#Bitcoin is a non-sovereign, hardcapped supply, global, immutable, decentralized, digital store of value.It is an insurance policy against monetary and fiscal policy irresponsibility from central banks and governments globally.— Travis Kling (@Travis_Kling) November 6, 2020 This ^ and 200% annualized is plenty of use-case for me.This isn't hard people: Buy bitcoin and hold. It really is that simple. This beats every other strategy. We tend to think that we have to do something really complicated to make money. We don't.And yes, alt-coins, DeFi, NFTs, etc. carry a significant amount of risk, even compared to bitcoin. People want to lump bitcoin in with those in terms of risk, but it's not even close. Bitcoin has been significantly de-risked over the last 12 months by the wave of institutions. And more is on the way. And they are interested in one thing: bitcoin. Not alt-coins, not DeFi, not NFTs. Don't overthink this. It's the easiest trade of our lives.
 
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Quincy A. Wagstaff

Redshirt
May 28, 2020
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idog said:
useful digital currency definitely seems to be coming in some form but it won't be a deregulated version. i read an article yesterday that basically said as soon as we have a central regulated digital exchange then the value of bitcoin and its smaller equivalents will vaporate overnight. lots of headlines out recently about outlawing BTC in the USA. before you say it, the goverment aint worried about Tesla stock or ETF's more than they are worried about people paying their taxes. i think it's pointless to say but you can color me a skeptic of your virtual world of monetary wizardry.
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These articles are either going to be very right or very wrong. You might want to prepare for both outcomes.
 
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JungRebel

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Aug 23, 2012
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Lack of regulatory clarity is my number one concern with crypto speculation. That clarity could be temporarily or permanently devastating - or highly beneficial - for the crypto ecosystem depending on the outcome. You raise a good point and everyone should do no more than what their own risk tolerance allows for. There are several good options of crypto tax software and if I am unable to produce the price of a crypto when I bought it (then later sold, converted, or spent) then I mark it as zero cost basis and take the biggest possible capital gains hit I can take in my tax bracket to err on the side of conforming with current regulations. When someone uses a Know-Your-Customer and Anti-Money-Laundering regulation compliant exchange the government will know their holdings and go after them if they fail to pay their taxes. Of course, nothing is easier to hide than cash and in theory public blockchains should be the easiest thing in the world to audit. There are companies out there such as Chainanalysis that are doing this very thing for our government. The problem is not whether electronic currency is secure and auditable - most USD we spend every day is digital and you can see literally every BTC transaction that has ever taken place - you can download the ledger right on your computer! - if you want. The problem is what all the institutions that are capable of buying the government and stand to lose out when this technology is adopted en masse are going to lobby for and against. The financial sector's power is immense and elections are de facto investment opportunities.

By the way, if you agree with what is written in the above paragraph then you should be hoping for the adoption of cryptocurrency, not just because you speculated on it and hope to get rich, but because in theory it could mean a more secure and honest financial system can be built on top of this technology.
 
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missouridawg

missouridawg

Junior
Oct 6, 2009
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Shmuley said:
I understood literally none of that.
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I didn't either, but I did put some money into crypto on February 1st. It's gone up more than 40% and would be more if I wasn't a complete moron the first couple of weeks. I'm still a moron, just less of one now.
 
jethreauxdawg

jethreauxdawg

Heisman
Dec 20, 2010
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Who controls these decentralized exchanges? What’s to prevent them from stopping the transactions? We’ve already seen that happen recently with meme stocks at different brokerages.
 
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JungRebel

Redshirt
Aug 23, 2012
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Sorry, this thread is for those who found themselves in similar situations, researching the topic with a budget for modest speculation but not having a ton of capital sitting around to 17 off with. I highly doubt the board wants me to painstakingly detail the ins and outs of everything I have read about crypto, people complain that four paragraphs is too much, but if anyone wants to discuss it further they can PM me. If you are interested I would search for the pros and cons of Defi and crypto on Google.
 
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JungRebel

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Aug 23, 2012
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They transactions are managed by 'smart contracts.' Decentralized exchanges are automated market makers that use liquidity pools instead of order books. The code determines what happens on an exchange and the code is law. The code on 'safe' Defi exchanges is open source and can be audited by anyone who cares to. It can also in theory be copy and pasted by anyone looking to scam or make a lazy buck. There are no sign ups to use these exchanges, one must merely connect using a supported wallet, and most of the chains these exchanges are built on are permisionless - the developer of an exchange does not need permission to build an app on the chain. This again makes it easy to scam or copy work and is why having an educated community that informs one another and votes with their dollar is the best way to pick 'winners.' Ideally, the devs set up the contracts, reveal the code, and 'shut the door on their way out.' What is in it for them is most exchanges pay interest (accrued via accumulating transaction fees) that are distributed as a token to users. Devs usually allocate some of these tokens for themselves for their work at the outset and if the exchange is successful they will profit.
 
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JungRebel

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Aug 23, 2012
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So the use case is BTC is capable of some but not nearly all of what is now possible on other chains - while being eco-unfriendly - and being subject to a certain amount of control by early and now institutional whales, and—what else? Its value seems to go up? It has the advantage of being a first mover. That's it. I respect it for the history but that is all, no offense to you.

I want also to make clear that this is all highly speculative and I would not give advice on this subject past asking people to consider the facts relative to their own strategies. Please keep in mind when someone tells you about BTC's value over time rising 200% per year that, for that trend to continue, its market cap would have to continually multiply by trillions of dollars. Current market cap is ~1 trillion. BTC at 100k would be close to 2 trillion, 4 trillion by 200k and so on. Please ask yourself what market Bitcoin is going to steal a share from; what problems it solves that are not being solved by better, cheaper, faster solutions; and what limitations it has compared to its competition going forward. Answer those questions honestly while remembering we are in an ongoing price discovery process that concerns technology that most people have not and will not take time to understand in the near future before you take Quincy's advice.
 
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Quincy A. Wagstaff

Redshirt
May 28, 2020
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JungRebel said:
So the use case is BTC is capable of some but not nearly all of what is now possible on other chains - while being eco-unfriendly - and being subject to a certain amount of control by early and now institutional whales, and—what else? Its value seems to go up? It has the advantage of being a first mover. That's it. I respect it for the history but that is all, no offense to you.

I want also to make clear that this is all highly speculative and I would not give advice on this subject past asking people to consider the facts relative to their own strategies. Please keep in mind when someone tells you about BTC's value over time rising 200% per year that, for that trend to continue, its market cap would have to continually multiply by trillions of dollars. Current market cap is ~1 trillion. BTC at 100k would be close to 2 trillion, 4 trillion by 200k and so on. Please ask yourself what market Bitcoin is going to steal a share from; what problems it solves that are not being solved by better, cheaper, faster solutions; and what limitations it has compared to its competition going forward. Answer those questions honestly while remembering we are in an ongoing price discovery process that concerns technology that most people have not and will not take time to understand in the near future before you take Quincy's advice.
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You don’t offend me at all. The record of bitcoin speaks for itself. And I don’t intend to convince you. You are obviously entrenched in your position.

I encourage everyone else to visit casebitcoin.com and decide for themselves.
 
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JungRebel

Redshirt
Aug 23, 2012
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What about Defi's record? The BSC and competitors like Harmony? The latter is up 1000x this year, is it pure speculation or the fact that the have a working product there is obviously demand for? You always talk about there being a risk in NOT investing in BTC. Yes, that was true when it had no competitors, when there were no chains functioning that solved real world problems. But now there are, and cant I accuse you of the same? Of exposing yourself to losses by not investing in upstart Defi projects? Interesting questions, but remember I respect your willingness to take a gamble and appreciate your perspective. I just cant be a maximalist when a project like Harmony's tokenomics have it up 10% on a day when the market is tanking because said market is chained to price of BTC. 7 days of unstaking make it hard to panic sell and that's a good thing. Bitcoin solved problems but created others it couldnt solve. Someone is going to solve them and both steal from existing markets and create new ones. I would love to hear if you think the issues that make Defi so 'risky' can be solved. If not, I understand. If so, why not take the chance? We are still early.
 
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