Real Vision Pro Crypto AMA - 14 April 2022

Below is a recording and transcript of the Real Vision Pro Crypto AMA call our team did on Wednesday, April 14th, 2022. Audio starts at 07:18.

Highlights included:

• Market update (07:48)
• Flow blockchain (13:01)
• Ethereum merge (18:27)
• Maple (25:36)
• Notable NFT projects (33:16)
• Investigating price-to-earning ratios (41:21)
• GMX update (47:11)
• Diluting the value of NFTs through airdrops (52:30)
• Frax update (59:32)
• New token launches (01:06:36)

Transcript of Real Vision Bi-Weekly AMA with the Delphi Digital Team

April 14, 2022

07:18 · Kevin
Welcome back everybody to our biweekly AMA with the Delphi team. We’re excited to be here as always. We appreciate some of you staying up with us to talk about all things crypto. We’ve got a handful of great questions that were submitted by the community that we’re planning to go through. Any that we’re not able to get to, we’ll try to answer those either in some of the chats or send them to the Real Vision team to be able to share with all of you afterwards. Kicking things off, I think a good way to start this would be to get some quick market commentary on where things stand, what’s happened over the last couple of weeks, and a few things that we’re looking at before we dig into the weeds on some of these questions you all submitted.

08:00 · Kevin
I want to bring on our market’s analyst, Jason, just to give some high-level thoughts on what you are seeing and the current state of the market. Jason, if you’re on, if you want to kick us off, that would be, that’d be great.

08:16 · Jason
Hey everybody. Good evening or good morning, depending on where you are. The last week or so has been quite interesting after the fake breakout of the 2022 range with Bitcoin trying to go positive on the year, but it couldn’t really hold those gains as it’s faded back into the $10,000 range that we’ve been watching for the last several months. With that said, what are some interesting things or some trends we’re currently watching?  One thing that is starting to stand out is liquidity conditions aren’t excellent at the moment. If you look at Bitcoin and you plot volume across time, and then take it a moving average just to smooth it out and see a line of it, so to speak, it’s been decreasing, and depending on what exchange you look at, but on aggregate, it’s lower than the summer 2021 lows.

09:22 · Jason
That isn’t a great sign. Price is significantly above those lows but volume is lower indicating a lack of participation in the market, which you could say is a sign of market uncertainty given the global situation unfolding now. If you look at spot Bitcoin liquidity conditions, a metric you can look at is slippage to determine how liquidity conditions are in the market. Some things we’ve noticed is that it’s taken less and less size for Bitcoin slippage parameters to be met. So, what do I mean by that? If you look at something like a 10-basis point slippage on a Bitcoin order, historically you need size around a hundred Bitcoin to see those slippage parameters met. We’ve started to see that come in a bit, meaning it takes less size to create a bigger market impact, which again is a sign of deteriorating liquidity conditions.

10:32 · Jason
Until we start to see liquidity come back into the market with willing buyers and sellers, it’s just something to keep note of. Right now, like I said, Bitcoin’s hovering in the middle of the 2022 range, which is not exactly the greatest risk reward for shorts or longs. It’s prudent to let the dust settle after the last week of carnage.

10:58 · Kevin
Yeah. Thanks, Jason. Just really quickly while we got you, just curious to hear any thoughts you have on the maturation of this space. What I mean by that is you have a lot more sophisticated players coming in, taking advantage of yield opportunities like the carry on basis trades, for example, or even delta neutral strategies around things like perpetuals. I’m just curious if you think derivatives will continue to be the place for price discovery for Bitcoin and potentially even ETH and some of these mega caps going forward. Are there any interesting trends there that you’re watching?

11:39 · Jason
Yeah, absolutely. I think that’s a great point. I think it’s generally correct. I think you’ll see derivative products in general continue to take the lead on things like price discovery as the space matures. You see it in traditional markets like the E-mini futures market contracts and things like that. Yes, you’d expect as the same institutions start to take interest in these markets, you’d expect similar behavior to unfold.

12:22 · Kevin
Really appreciate that. I’m sure we might have some follow-up questions for you. One of the top questions that we got as we just dug into some of these was on the concept of social tokens. The question was, “What early projects with potential does Delphi have on the radar? How do you see products like Flow, Rally, or Chiliz? I want to bring one of our analysts, Alex, who’s been following Flow for quite a while now. I would love to hear any thoughts you have on Flow and what’s going on there.

13:01 · Alex
Yeah. Thanks Kevin. I’m happy to jump in and talk about Flow. As you may know, Flow is a proof of stake, smart contract platform. They had the initial run a while back when NFTs first got very popular with TopShot. Since then, it’s been quiet on that front. The token hasn’t performed too well, but I want to dive into what’s the latest status in the ecosystem. What are they working on? What does the token econ look like? Regarding its architecture, you could think of it as having a multi-node architecture where they have different node types that are responsible for doing different actions with the network.You have consensus, execution, collection, and verification. Comparing it to other chains, Flow has been criticized in the past and to date for having the centralization factor, where if you go into the Etherscan logs, you’ll see a lot of the nodes are run by the Flow team.

13:59 · Alex
That’s something that they want to work on decentralizing over time and adding other validators to the network. Now let’s touch on: what are some of the initiatives that they’re working on? What’s the core focus? You may notice that with other Layer1 blockchains, there’s a lot more bridges that are coming to play. This allows for liquidity to flow easily across chains and users to join. Flow historically has been more closed off and permissioned. This is one of the reasons why you haven’t seen as much interest in new users joining the network and liquidity moving around. That being said, that is one of the things that they’re targeting going forward. Recently, they had an integration with the Celer, which is another bridging solution. Touching on some of the other things at a high level, you could think of their core initiatives being NFTs, DAOs, DeFi, and similar to how a lot of the Layer1s have the ecosystem funds,…

14:54 · Alex
…and how a lot of the DeFi primitives were funded in prior years, we’re beginning to see a lot more activity on that side. Flow has a pretty good presence on the NFT side, but in order to complement users in other areas and keep them on the home base, you really need to get those applications funded (like DEXs). Flow still has maintained a strong presence on the IP side. You’re going to see them working with a lot of strong brands coming in from the Web2 space. You may be wondering as well: what does the token econ look like in relation to other projects? How could things change going forward? As with a lot of tokens, it’s primarily a function of usage driving demand. Jumping into what specifically the token will be used for going forward -…

15:44 · Alex
…The validators are currently staking Flow tokens, but as more and more integrations come about, Flow tokens can be used as collateral, as a medium of exchange, and also for payment for the validators. Other things that are different regarding Flow itself is for every account, there needs to be storage that the accounts pay for. You could imagine that these different accounts need to have continuous Flow balances, and