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Embracing Bitcoin Volatility, The DeFi-NFT Symbiosis, DEX Aggregator Wars: The Delphi Debrief
JAN 08, 2021 • 3 Min Read
Piers Kicks
We are excited to announce the launch of podcast transcripts for our most popular podcasts! Moving forwards, you should be able to find transcripts as the bottom of the episode pages. Check out an early example with the episode at the bottom of this email.
Embracing Bitcoin’s Volatility by Kevin Kelly
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Key Takeaways:
- Younger generations don’t want stability or a steady dividend. They WANT volatility. Bitcoin is capturing the mind share of these investors. Their appetite for risk will continue to drive speculation.
- Some argue bitcoin’s latest parabolic move is stealing market share from gold but that’s only the tip of the iceberg. For perspective, net outflows from the two largest gold ETFs (GLD & IAU) totaled ~$5.7 billion in Q4 2020; Bitcoin added ~$340 billion in total market value over the same period.
- Bitcoin kicked off 2021 with a +35% gain in its first week of trading. Notably, BTC is now one of the best performing assets since its previous December 2017 peak, recently surpassing even the almighty Nasdaq 100 on a total return basis.
DEX Aggregator Wars: The Positive Slippage Experience by Paul Burlage
Key Takeaways:
- Reasons why 1inch will be a strong-case study in 2021:
- 1) It’s an aggregator play.
- 2) It builds out integrations under its umbrella (liquidity pools, etc).
- 3) It has an extensive team/function to execute.
- 4) It has clear rent-extraction design choices (positive slippage extraction).
- Positive Slippage: difference between an asset’s quoted price and the realized price in the trader’s benefit. Ex. ETH is quoted at $1000 but the realized price price is $995, resulting in a $5 positive slippage.
- Positive slippage is one way the quoted price can deviate. Another example includes variable gas costs.
- Each aggregator will decide whether to attract users in the near-term, creating a valuable supply-side community at the product’s expense, or focus on optimizing their product.
The DeFi <> NFT Symbiosis by Piers Kicks
In 2020, the worlds of decentralized finance and NFTs collided dramatically as the DeFi Summer drove gas fees on Ethereum to intolerable levels for many NFT activities. Whilst many participants in the NFT space initially saw this detriment as a curse, it can certainly be argued that residual liquidity from such a frothy market is what allowed the NFT sector to have its moment in the sun as money began to spill across sectors. As the DeFi boom subsided towards the end of summer, the NFT space began to see its highest volumes since late 2017 before ending the year with a bang fueled by historic crypto art sales…
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BTCUSD Normalized (Current vs Prior Cycle Peak)
Bitcoin wasted no time in the new year, kicking off 2021 with a +35% gain in its first week of trading. While not a perfect correlation, BTC appears to be tracking its prior cycle quite closely. Its latest price run up has outpaced its previous recovery to a new all-time high, though one could certainly argue the market environment and momentum among prominent investors should cause bitcoin to run a bit ahead of schedule.
As mentioned, we will continue to iterate on the design of our Delphi Debrief based on your feedback—so please let us know which section you enjoy the most and what else you’d like to see!
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