Consensys
The Battle for Interest Rates: Tezos (XTZ) vs Ethereum (ETH2)Been writing a few long articles lately but the tl;dr of it is that now that interest rates are going up, the asset speculation market (real estate, stocks, venture capital, crypto/NFTs) is largely over and money will start to flow into financial products that provide more "reliable" returns - mainly interest rates.
Given that the banks are dragging its feet in terms of giving people interest in their savings accounts, coins that offer reliable staking rewards will probably start to gain more attention as time goes on.
I've been promoting the coin Tezos quite a bit lately since it's the coin that I feel like has the biggest long-term promise. They currently offer:
1) staking rewards (4.63% on Coinbase but higher if you stake them yourself)
2) on-chain governance (which most don't have, including Bitcoin and Ethereum)
3) people building/minting lots of things on top of it all the time, despite the dips in the market right now
You probably remember me stanning for ETH since that's how I got my first successes is crypto, but to be honest they may be in trouble longer term if they don't do their merge sooner than later - gas fees are one thing but their decision to stick to off-chain governance models (basically trusting its users to make decisions behind closed doors) has been causing major issues in some projects, especially in DAOs. (Look up Brantley and ENS for an example of what happens with coin-based voting systems.)
Whether I give up on ETH completely (I did sell off a pretty big chunk of it recently) will largely depend on how the Consensys merge goes this August and if they move towards or away from the ideals that they're advocating for all the time. They have a lot of catching up to do because #XTZ right now has all of the things they like to talk about already running.
For the average person out there, what they're going to see is banks and crypto competing against each other in something that more people can understand: interest rates. Right now crypto is winning since they have the capacity to offer people better rates than the banks are - and can definitely win if they play their cards right. NFTs are still confusing for most people but one number being higher than another number is something that almost anyone can understand. You might even argue that this is the first time crypto is competing against the banks in a very direct way.
The markets might look scary right now but once it settles down we'll start to see new patterns emerge with new ideas and products taking the scene.
Staking Rewards: The Best Hope for Crypto During the RecessionNews of record high inflation and the federal reserve's plan to increase interest rates this year has a lot of people worried that a recession (probably on a global scale) is coming this year. After over a decade of constant growth in the US stocks and real-estate markets, we're finally going to see the bubble pop. GDP is down, governments are broke, and
I would argue that the "craze" of the last few years in stocks, housing, and even NFTs were driven by low-interest rates that encourage people to speculate rather than save - the act of buying "useless" NFTs, in a way, makes "sense" when compared to the alternative - earning almost nothing on savings and CD accounts. (The crypto "crash" we see in the last few weeks is a result of "crypto-curious" money exiting the space - most of which run in parallel to the fiat markets as a whole.) As interest rates get higher and higher over the next few months, however, that script is likely going to get flipped on its head.
If the crypto industry adapts fast enough, they can take advantage of the fact that the banks are still dragging their feet in terms of offering better interest rates - staking rewards are currently outperforming the savings rates of most banks by a very wide margin and is a much easier sell to the average person out there just trying to protect their money. (The idea of buying NFTs of apes and rocks as your future nest-egg will start to sound more silly as time goes on, I think.)
In a way this marks the end of the speculative-NFT era for the crypto industry, and possibly the end of the dominance of the proof-of-work model itself. Prior to the big "crash" a few weeks ago, many proof-of-stake coins Tezos (XTZ), Chainlink (LINK), Cardano (ADA) saw blips of independent movement as the rest of the market continued to tumble. If this trend continues over time (since these projects are actually offering something of value to its users - interest and real returns) we may start to see lesser-known contenders in the space rising to the top of the charts. (Ethereum is currently in limbo right now, at least until they finally do their ETH2/Consensys/"merge" in August - they've taken outsized losses this week due to the come-downs of the NFT craze.)
As mentioned a few times before, Bitcoin may be in big trouble because the thing people are going to be looking for - interest rates - isn't something they're able to offer on any level, especially after the market goes into a downturn this year. All those years the mining community spent blocking money supply and block size upgrades may finally come back to bite them - the "flippening" may already be on its way. (And Ethereum too, if they fail to adapt to the new landscape - time will tell.)
A Few Notes for Crypto Winter First-TimersThe crypto market is in "free fall" today, as some of you may have heard. Decided to write something from the perspective of someone who's been through a few "crypto winters" over the last 8 years or so.
mirror.xyz
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I feel like a million years old writing in this tone - though everyone in crypto knows that a week in this industry is equivalent to a year in “normal” time so being inside crypto-lala-land long enough does warp your sense of time. (The last few years of insanity in the world itself doesn’t help too, of course.)
But it’s also true that I've been through 3 crypto bull/bear cycles at this point (I was in the ETH ICO in 14’ - divested most of it since then, for the record) and may have a useful perspective to some - not that these dips don't hurt, but I was relatively fortunate to have survived the last few ones through a combination of planning ahead and a few strokes of good luck. But I will say again what I say to almost everyone: crypto is a 3-4 year play at minimum, and you need to have the patience to wait at least that long. Life is short, yes; but at the same time it’s also very, very long.
The first few hype cycles (14-16') I literally wasn't aware of anything because crypto was just an obscure, zany idea back then and people held them largely for fun. There were no exchanges - or ones you’d want to trust your money with, anyway. (Mt. Gox, yikes.) The easiest way to get Bitcoin was to mine them yourself or find some guy on the internet who you could exchange it with a pizza or some other type of bartering deal. My wallet was worth so little at the time that I forgot about it and almost lost my private key, in fact. 🤣
The second one (16-18') I worked "regular" jobs and did dollar cost averaging so I didn't have to touch my investments for day-to-day needs. I cashed out only when I needed it, for emergencies and unexpected expenses. My decision to sell was need-based, rather than speculation-based, in other words. (This one did really pay off and I wish more people would do it, honestly.)
To prep for the "winter" today I've spent an excessive amount of time doing research on projects that are focused on utility and community-building…and re-allocated my portfolio accordingly. I may have made a few mistakes but after being burned a few times I think I’ve gotten better at picking assets that will survive for the longer-term. The market is still in free-fall so we'll see if that pays off.
As a general observation, I’ve seen lots of projects go through problems that many would consider catastrophic - but survived out of sheer perseverance. There were a few projects started with great ambitions but eventually found success by finding and refining their niche. Finding product-market-fit isn’t easy - these things do take time to figure out, even on a human level. (You can see glimpses of potential future successes when people “buy the dip” during downturns - a sign that enough people care about the project to help it stay afloat.)
I have never, however, seen a project start off as a money-making scheme then successfully “pivot” onto making something useful later. Like a song that people find catchy, projects usually start and end the same way; with the same chorus, and the same tone. If you’re still holding onto those hype coins, you may want to look at your portfolio a little closer this time because if the team isn’t actually working on anything serious there’s a good chance it will never come back up ever again. (Although I gotta say, the way Ethereum Classic was able to continue to scam people despite its protocol layer being completely compromised was impressive in its zombie-like way.)
I gained a lot of respect for the Ethereum team during the last few drops because they seemed unconcerned and continued to do what they love - building tech. That and they had the support of a development community that genuinely cared about the product enough to keep it afloat during the “hard times” - the #1 resource of any project, in my opinion. But the hype of 20-21’ really brought in a lot of grifters into the ETH ecosystem and the gas-fee problem really toxified the culture there, which I think its unfortunate. (Bitcoin leaned hard into the scarcity model and might be beyond repair at this point.) We'll see if the bear market + Consensys/ETH2 merge will fix that - at this point implementing the tech itself should be a pretty straightforward process - but culture is much harder to fix once it goes sour.
If people are hanging around each other solely because they think they might rich, when the money’s gone it doesn’t take very long before they start turning on each other. In both Bitcoin and Ethereum we saw the raw ugliness that came from the Proof-of-Work scarcity model - which incentivizes selfish and toxic behaviors in ways that even its founders couldn’t have anticipated. As Ethereum moves away from Proof-of-Work and into the worlds of Proof-of-Stake, is this the end of the Proof-of-Work era for crypto? Let us hope so. (The military dictatorship in El Salvador, which dared to make Bitcoin its reserve currency is in danger of defaulting now, by the way.)
For the record, I own 0 Bitcoin - I sold them off a few years ago after seeing how they’ve basically given up on making any meaningful improvements on the protocol itself - gated off by an off-chain governance process controlled by a small group of miners out there. If you’re comfortable with that setup by all means, but hope you at least understand what you’re getting yourself into.
-- What Comes Next? Interest Rates and Proof-of-Stake --
Last time it was Crypto Kitties, this time it was Bored Apes - in a weird way the way we talked about crypto tech hadn't really evolved much since then - probably why 2021 became the era of the (adjective)-(animal) NFTs, rather than a triumph for humanity itself. Web3 was supposed to be about scalable partnerships, not about cattle auctions of imaginary animals - but somehow we all collectively missed the point of why the technology was created to begin with.
Some ideas in Web3 that I think still has some long-term potential: "useful" Proof-of-Work , Proof-of-Storage , the metaverse , DAOs, Proof-of-Identity , decentralized video , and of course, NFTs - after it becomes more “useful” to everyone. What these projects all have in common, though, is that they’re not quite production ready and are all in their alpha/beta stages right now. Great potential and great upside? Yes - still, yes. Are we there yet? No - not even close.
Despite the hype, the tech behind crypto and Web3 systems haven’t evolved that much in the last few years - mostly because Web3’s biggest issue right now isn’t technical, it’s organizational/cultural: for the blockchain to have any use, the community needs to convince everyday businesses and people to adopt practices like ledger validations, using wallets for building social profiles, trackable and authoritative reputation/action/credit scores, etc. - all which are doable now on a technical level, but needs the cooperation of multiple organizations working in tandem with each other.
Since crypto doesn’t deal with physical assets directly, it needs to validate itself through the utility of a service that is actually tangible to the average person out there. Most of that involves bridging social/cultural/industrial divides that Web2 companies never dared to cross. There’s a lot to be unlearned first before we can move onto the next phases of the crypto experiment itself.
For now, though, there’s one obvious “utility” that I’ve been saving for last - interest rates from staking rewards. What makes this crypto cycle different from the others is that fiat systems and many government institutions around the globe are in big trouble this year: Bitcoin/crypto was “invented” sometime after 08’ as a direct response to the economic crisis then - but has largely existed in a 0% interest rate environment up until now. When interest rates start going up in fiat - possibly to 1970s levels, even - we have no idea how the coins themselves are going to respond.
As the federal reserve continues to increase interest rates in response to inflation (they have no choice at this point), the general public’s attention will undoubtedly shift from a speculative mindset to a savings-based one - as it typically happens during recessionary times. Mortgage and loan rates have undoubtedly risen, but the banks have been slow to offer higher savings rates to people as a whole. Who’s actually paying out interest rates right now? Crypto.
If the banks continue to drag its feet, coins that offer staking rewards (Tezos, Ethereum , Algorand, even Cardano) actually have a real competitive advantage to what fiat is offering right now. One number is higher than the other number - it’s pretty straightforward and an easier sell than trying to get people to buy animal jpgs, honestly. If crypto adapts faster than the banks do this year, this may actually when people finally begin to see the “utility” behind the technology itself.
-- A Fork-in-the-Road - Which Do You Choose? --
22’ is likely going to be an insane year for more reasons than one: we’re going to face economic, social, and political turmoil all at the same time, with crypto mixed into that chaos somewhere in the middle. But a reminder that money is relative - a market crash isn’t necessarily a bad thing if the result is cheaper goods on your money, and visa versa.
The truth is that most people have been losing money every year even during these “good times” - the feeling of numbers getting higher in your bank account means nothing if the goods you pay for is rising higher than what you earn. So we already know that holding fiat is already a loss, and the one thing that made it worth it - stocks and housing - is about to tumble now, too. Crypto doesn’t need to be perfect, in other words: all it needs to do is prove itself better than fiat, which, in theory, shouldn’t be too hard to do as the Bernie Madoff 2.0s start emerging in the wake of a growth market gone sour.
Whether or not crypto will go up or down during the recession this year has been a long-standing debate within the crypto community, and only time will tell which way it will go. But there’s basically two different ways to look at it -
When the economy goes into a recession, so will crypto, because:
- Buyers of crypto and stocks are more overlapped than not, and the two asset classes have historically always moved in parallel.
- The idea that Bitcoin/crypto is a hedge against inflation has not panned out as hoped.
- During recessions when budgets become tighter, people are less likely to put money into speculative assets, like crypto.
- Crypto existed in a 0% interest rate environment for the most part and if you take that away, so will the momentum behind it as well.
Or - when the economy goes into a recession, crypto will go up, because:
- Total crypto adoption is ~10% of the world, at best. Still lots of room to grow.
- Crypto adoption tends to be higher in countries with severe inflation - the loss of confidence in the banking and financial systems (which is happening already) often forces people to consider alternatives.
- Staking rewards currently offer more interest than the banks and will be very appealing to some people as they shop around for competitive interest rates.
- Bitcoin was created in 08’ financial crisis as a response to the problems leading up to it, so the emotional response to the next downturn will likely be more pro-crypto than not.
So there’s a fork in the road here, and people HODLing crypto right now will have to make a choice regarding which path they want to take. I suggest that people take a hard look at their portfolio in the upcoming months and think about what they’re comfortable with and how they think things will unfold over the course of the next few years.
The good news is that regardless of what happens, the inflation-fueled 1970s era was known for a lot of structural uncertainty but it was also the period of good music/art and great social change - something that I think will be a boon to the long-term health of the NFT markets as a whole. I get that we live in a very anti-social era right now, but at the end of the day, crypto is money, and money is about people. You can’t make real money unless you make some effort at understanding how people think.
There’s plenty of reasons to think that the industry will do well in the long run, but it will take a lot of work to get there. If the community puts in the work, it will succeed because the opportunity is still definitely there - if not, it will fail. It’s pretty simple, really.
Good luck and good fortune, folks. If you need me, I’ll be working on my next project, Teia Surf, in building the types of incentive structures that had always been the dream of Web3. As a lot of the veterans of the crypto industry would say - the best time to build, is now. 🤞🍀
Markets Unresponsive to ETH2's Test Merge: What's Rallying Now?Ethereum holders were hoping for a big rally after this week's "merge" on ETH's primary test network, Ropsten, but so far the markets have been responsive.
Coins that offer staking rewards, however, did fairly well this week as a whole - the two winners being Tezos (XTZ) and Chainlink (LINK) which saw big gains today and over the course of this week as a whole.
Tezos:
- Fork-less upgrades and on-chain governance models on XTZ provide tangible solutions to a lot of the issues the crypto industry is going through right now, especially in DAOs.
- Recession talks are getting more people into a savings mindset - and Tezos' accessible and competitive rates (4.6%) makes it very appealing for crypto holders to convert to.
- The interest in NFTs from artists and art collectors are starting to migrate over to chains like XTZ ever since gas-fees started to get out of control on the ETH ecosystems - time will tell if the Consensys "Merge" in August will have developers and artists return but for now, Tezos and other layer 2s are taking advantage of the lull and pulling ahead.
Chainlink:
- Working on many background infrastructure projects at high levels.
- Has an interesting history (which involves the 4chan crowd, oddly enough) that gave it a cult-like status a few years ago that seems to be paying off today.
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While the crypto market as a whole has remained fairly flat-lined this week, the projects with the biggest gains seem to have a few things in common: the offer of staking rewards; and a visible community backing the project during its downturns, thus "buying the dip". If you're a long-term trader, these trends are positive signs that the asset has real resilience behind them.
www.forbes.com
XTZ Beats Everything Again: 3 Reasons WhyTezos (XTZ) broke from the pack yet again today, outperforming most major coins despite today's downturn in the overall markets.
- Fork-less upgrades and on-chain governance models on XTZ provide tangible solutions to a lot of the issues the crypto industry is going through right now, especially in DAOs.
- Recession talks are getting more people into a savings mindset - and Tezos' accessible and competitive rates (4.6%) makes it very appealing for crypto holders to convert to.
- The interest in NFTs from artists and art collectors are starting to migrate over to chains like XTZ ever since gas-fees started to get out of control on the ETH ecosystems - time will tell if the Consensys "Merge" in August will have developers and artists return but for now, Tezos and other layer 2s are taking advantage of the lull and pulling ahead.
Long-term investors look for projects that seem to thrive during the "tough times", and it seems like XTZ is performing exactly right now. It's a project worth paying attention to, either way. 🚀👨🏻🚀🛸
Proof-of-Stake Coins Are Now Winning Web3. Can Bitcoin Survive?Along with the "decoupling" event that happened on Friday, Ethereum's announcement of the ETH2/Consensys/Merge coming up in August is likely to create some waves in the crypto space as the date approaches - not only will it affect the ETH ecosystem itself, there's a chance that it could have significant ripple effects on the tokens minted on top of it as well.
Over the years there has been, however, a general trend towards Proof-of-Stake systems gaining more favorability, especially among DeFi projects - because of its greater efficiency and ease of use. After the merge, Bitcoin may be the only project left on the charts that is using the Proof-of-Work model - what does this mean for Web3 and crypto spaces longer term?
ETH2 "Merge" to Come in Aug. ETH/XTZ Rivalry Renewed?The Ethereum Foundation announced a soft-deadline for the long-anticipated ETH2/Consensys/"Merge" - which will move ETH's current proof-of-work systems over to proof-of-stake.
DeFi and finance people tend to prefer PoS over PoW as an economic engine since it's more similar to how the banking industry operates. It also had the added benefit of being more secure, energy efficient, and easier to understand.
The ETH team may have been feeling the pressure to do the migration sooner than later due to high gas fees having chased a lot of the developers and artists in the ecosystem off the chain - but may have been bogged down by speculators and miners who did well during previous runs and don't want things to change. The migration to PoS this summer needs to be smooth and without incident if the coin wants to maintain its long-term lead.
But since they're dealing with legacy PoW systems that may or may not lead to complications down the line (on top of the politics of it all), we don't know how things will actually turn out. ETH's validator systems (XTZ has a similar system called "Baking") currently requires a massive 32 ETH investment - of which you have to sign a waiver agreeing that there is no definitive date where you might see your money back. In theory, post-merge the initial validators *should* be able to withdraw from the system but if this happens en-masse it could potentially spell a disaster for the project as a whole. A lot depends on how the ecosystem develops post-merge. (Though there is - to be fair - the potential for interest rates to shoot up in order to compensate for its loss.)
Another worry for ETH is what will happen to the price post-merge - in theory, the system itself will "burn" its money supply to keep prices high, but in crypto utility coins and speculation coins are often correlated in an inverse manner. The team reassures investors that their money is safe, but given the new and unprecedented nature of this "merge", there still are no guarantees.
In the meanwhile projects like Tezos (XTZ) - which has been proof-of-stake from the very beginning when it was proposed in 2014 - have been making moves both in the Web3 space and in the markets - one of the few coins this week that managed to remain in the green. It's also one of the chains that artists, developers, and businesses have flocked to after ETH's gas fees started becoming untenable, and we see signs that lesser known projects like these are starting to become more "viable" in recent months. Tezos' protocol was designed specifically for stability - it doesn't require hard-forks for upgrades, offers staking rewards (4.63% on Coinbase for merely holding it - ETH2 currently offers 3.675%), and has historically always had low gas fees, even during the craze of last year. Many people - especially in the arts and NFT spaces - have noticed and have migrated over. (e.g. https://teia.art, objkt.com.)
The two chains historically have always had a rivalry of sorts, back when Ethereum decided to go with PoW, whereas Tezos decided to go with PoS as its Layer-1 from the very beginning. Tezos has remained mostly quiet during the bull runs of the last few years, but as the merge date gets closer, we might start to see this old rivalry re-emerge again.
ETH's "Burn" Model and its Relationship with Politics/CharitiesIn today's inflationary economy where money printing reigns supreme, the idea of "burning" money to maintain a currency's worth stands out as counterintuitive and different. It's also highly illegal - creating your own money supply (counterfeit) or destroying them are usually both felony offenses in most fiat systems right now.
In a way the ability to control a currency's money supply is the biggest draw of crypto on a fundamental level. What happens when we give that power to the people instead of relying on the government to do it for us? When the recession hits later this year, people are going to have a lot of time to ponder that question further.
Vitalik Buterin, to his credit, paved the way towards a "burn charity" model. The "fairest" way to redistribute wealth isn't to start a nonprofit or charity - it's for people to simply destroy their wealth and remove it from the ecosystem. This makes everyone else's money worth a little bit more as a result, always in favor of those who have less.
In a way, it functions like an Universal Basic Income, raising the economy from the bottom up, as Andrew Yang claimed during his US presidential run in 2020. (Vitalik supports UBI too btw.) It is the "fairest" way to redistribute wealth.
The "burn charity" model gets interesting when applied to politics and sociology because it highlights the fundamental problems with human nature in a very clear way. If the end goal is to destroy money supply, it explains why people might get appealed to violent ideas such as "eat the rich" or the destruction of private property - it is striving towards that same idea of redistribution of wealth through the destruction of money in itself. (Luckily in crypto, we can do this in a peaceful way, which politicians should be talking more about, imo.)
On the flip side, fiat has always been against "burn charities" -- you can't create nor destroy fiat money (not that there's a strong will to do that right now by anyone) and the problem with redistribution through taxation is that the government can't be trusted to handle the money in a responsible way. (A "fair" government would take money they seized/collected and simply destroy them, not keep them, imo.)
All of these ideas seem outlandish and radical to our sensibilities right now, which might explain the reasons why good ideas like UBI has had trouble passing in political arenas, despite its popular appeal. People intuitively know that it's a good thing, but often can't explain why. But maybe the idea of "burn charities" might get us a little closer to what we want. Couldn't hurt, either way.
And crypto is the ideal place to experiment with these ideas that are untenable in the real-world due to political realities right now. But I hope that the #Web3 folks will see the opportunity that's there and push the envelope further - it may be our only hope, after all. 🙏
twitter.com
UBT Long short term play My Current Trade Plan UBT:
Accumulation zone .80 to 1.30 target build from 10000 - 15000 - (make it stack)
Currently at 1.07$
Resistance @ 2.37$
Support 0.80$
Target $3.12 sell off 10%
re-test for 7.00-9.12 sell off 10%
Hodl to 50$ then another 10%
Fundamentals -
Team has actually built something to rival; DOT, ATOM, SOL, CELO; even better yet real clients and established businesses such CONA, integrations with SAP, EY and Service Now as well
Big brained team (ties with Consensys aka Baseline), who've partnered with Concircle and Provide who actually BULDI - Baseledger for Baseline.... BASELINE.... which is said to be used by enterprises previously mentioned theres so miuch more to be said but simply; 150 million tokens available to buy – no more to be minted – with clients having fiat and private custodial via Coinbase to use service, plus staking, its inventible... BTFD
Enjoy
Look this Hidden Bullish Divergence.This chart is so Bullish.
Thanks JpMorgan.
Hidden Bullish Divergence :
www.perfecttrendsystem.com
AST ConsensysNews consensys/Fluidify
defirate.com
Have pump from 150 to 900 now 61.8 fibo, good support. He go can higher now with 10m cap and circulating supply 150 millions, this is very cheap...
btc now inside an ascending broadening wedge.The rising wedge it appeared we had broken down from simply morphed into an ascending broadening wedge which also tends to break downward. We are currently near the top trendline of that wedge and with the other resistance lines teaming up with that wedge line of the 4hr 200ma (in blue) and the top trendline of the descending channel odds are good the price will be heading back downward to retest at least the 4hr t-line(in yellow) or also likely it could go back down and test the bottom trendline of the ascending broadening wedge. I was hopeful that when we turned things around before reaching a lower low that we had formed a higher low on the 4hr chart which would be a very positive sign, but once it became clear that we were still just consolidating inside an ascending broadening wedge pattern that higher low is really just considered inside bar consolidation and not a higher low after all. For now, even though ascending broadening wedges tend to break downward, I'm flipping my stance to neutral because all it will take to break upward is some sort of mega bullish news from the Consensys meeting currently underway. . .and we've already heard that Microsoft plans on using the lightning network.
