BC CRYPTO
Saved by @Shubham51ngh

We're in the phase of the market where there's a lot of retail inbounds but not enough education about the Ethereum ecosystem and DeFi.

So, let's break down the basics of some of the top protocols.

First on deck: Aave (@AaveAave), an Ethereum-based money market protocol.

A 🧵

 TL;DR: Aave is a protocol through which any user anywhere in the world can take decentralized loans by collateralizing their assets.

Aave also allows those will idle assets to earn a relatively safe return on capital from lenders, whose rates are determined by a curve.
1/ For years, most crypto assets had no indirect or direct utility.

Users would hold BTC, ETH, and other assets (including many ERC-20 tokens) with no expectation of a native yield or dividends.

ETH, for instance, was long just an asset for transaction fees, as was Bitcoin.
2/ If users wanted to borrow against their assets, they were relegated to centralized platforms—which were few and far between years ago.
3/ Aave, formerly ETHLend, is a protocol allowing users the ability to lend and borrow on-chain, without KYC and untransparent fees.

Users can deposit a variety of assets as collateral, then use that collateral as ammo to borrow other assets to be used in DeFi or beyond.
4/ Today, Aave supports a handful of Ethereum-based assets, including but not limited to stablecoins (USDC, DAI, USDT), Ethereum itself, DeFi blue chips (UNI, YFI, SNX), Wrapped Bitcoin, and a number of other assets.

Loans are *overcollateralized*.
5/ There are two core buckets of users of Aave:

1. Those looking for steady, relatively safe yield on idle assets.

2. Those that want to leverage their assets by borrowing against their holdings, then trading and spending the loan to achieve utility beyond the rate they pay.
6/ For those in the first bucket, the user flow is:

- Find idle assets that can be lent out on Aave
- Deposit said assets
- Earn a per-block, pro-rata interest paid for by those that borrow your assets (assets are pooled, then used) from the protocol
7/ For those in the second bucket, the user flow is:

- Find inactive, useless asset
- Deposit it into Aave
- Enable it as collateral
- Borrow desired assets from protocol
- Use borrowed assets for trading, yield farming, spending, etc.
8/ There are a few use cases with borrowing on-chain. Let's explain a few.

Shorting:

A user can borrow an asset from Aave, sell it, buy it back when the price is lower, then pocket the delta.

This works because the loan is denominated in the asset(s) borrowed.
9/ Earning a yield on any asset:

ETH natively does not produce yield.

It can be used as collateral to borrow assets that *can* earn yield.

Assuming you can earn 15% on USDC and borrow @ 5%, borrowing USDC at a 200% collat. ratio will allow for an effective yield of 5% on ETH.
10/ Spending:

Say a user is holding Wrapped Bitcoin and wants something on-chain or IRL, though doesn't want to get rid of their WBTC exposure.

A user can collateralize their WBTC, buy what they want, then pay back the loan with income or other assets to reclaim their WBTC.
11/ Now that we have some use cases out of the way, let's take a look at flash loans.

Aave pioneered flash loans, a concept where anyone can borrow any amount of capital within a single block for a number of use cases.

Did a thread here in the past.

https://t.co/FRn5Pj2TFk
12/ Due to inefficiencies in the market, users can borrow large chunks of capital from Aave within a block, to balance the price of assets between different exchanges, along with other use cases.
In the above transaction:

- A user borrowed 2,048,000 USDC from dYdX

- Traded that USDC for 2,028,367 DAI in Curve's Y pool

- Traded that DAI for 2,064,182 USDC in Curve's sUSD pool

- Paid dYdX back + 2 wei

All in one block...

Profit: 16,182 USDC
Cost: $60 in gas
13/ Now, a look at a few of the mechanics of the protocol to help contextualize how Aave works.

I'll cover:

- Interest rates
- Terms
- Liquidations
- aTokens
14/ Interest rates: Aave's rates on the lender and borrower sides are determined by a curve.

The more an asset is utilized, the higher the rate lenders earn and borrowers pay.

The borrow rate is always above the deposit rate.

Here's the borrow rate model for USDC / USDT.
15/ Aave has the added component of a "stable" borrowing rate.

To mitigate unexpected spikes in utilization affecting the rate one pays on their loan, users can lock in a fixed rate, so they can manage risk properly.

This rate can readjust based on market conditions.
16/ Terms:

Aave has a number of loan terms that dictate how much one can borrow, at what point they are liquidated, and how much they pay when they are liquidated.

These terms are determined by a risk team, who assess market conditions to minimize risk to protocol collateral.
17/ Liquidations:

Unlike traditional loans, Aave loans are liquidated autonomously when a user's loan-to-value ratio falls below certain values.

A large enough drop in the value of one's collateral will allow users to bid the collateral, sell it, then pocket a bonus.
18/ aTokens: Users that deposit assets into Aave are granted an aToken representing their deposit (USDC -> aUSDC).

aTokens are yield-bearing assets that accrue interest in real time, allowing one to watch their deposited assets grow by block.
19/ These basics aside, Aave, at the end of the day, is a core money lego.

It can be used by other developers to build interesting applications and use cases.

For instance...
20/ @BasketDAOOrg: BasketDAO deposits assets under management into Aave, which creates a yield-bearing index

@APWineFinance: APWine allows users to trade unrealized yield

etc.

aTokens, flash loans, etc. can all be used in tandem with other contracts to create use cases.
Fini/ As always, none of this is investment advice. Please take caution when interacting with protocols on-chain and understand all risks before doing so.

As I said at the start of the thread, this is the first of many.

More to come.

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Prepare For The Biggest Bull Run In Crypto EVER.

I made some charts explaining the long term trend of #Ethereum and how identical it is to the early #Bitcoin cycles.

It's very obvious what's happening and has been in the charts for months.

I call this pattern the, "4 Year Bowl."

New years are a time of market shifts both bullish and bearish. Each cycle goes through 4 years of this rounded accumulation pattern. After year 4 we start 1 year of parabolic rise.


When you take a look at the same principle with the last #Bitcoin cycle you get almost the exact same outcome. Only difference is Bitcoin usually tops at the first of December and not January.

The 4 Year Bowl is identical with Ethereum and Bitcoin


When you lay them side by side you get a pretty insane correlation. The fact $ETH accumulated for 2 years at that range low makes me feel as if the parabolic rise will happen faster than everyone thought.

Look how identical it is to the last $BTC cycle. Who could argue against?


S/O to @BobLoukas for teaching me how cycles work. I was one of the first members on @BitcoinLive1 and Bob was the only person I listened to. True Legend.

So... How does "4 Year Cycle Theory" work?

Measure from peak low to peak low. Each cycle equals 4 years in distance.
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Simon DeDeo
Simon DeDeo
@SimonDeDeo
Someone tosses a coin ten times; it comes up heads every time. What's the probability it comes up heads on the next toss? (Pretty darn high—part of @nntaleb's work is unprogramming you from your high-school rules of thumb.) Now consider the (related) Gambler's fallacy...

In this case, it's a theory about compensation: the worse one's luck is, the more likely it is to see a reversal. On the surface, it's irrational. The more bad luck you have, the more you accumulate evidence that the system is rigged.

But there's also an anthropic component. If the luck is bad enough, it starts to become inconsistent with your survival. You've accumulated evidence for correlations in the environment, but these correlations (may be) inconsistent with (people like you) being in this environment.

An example. You're in a city where everyone takes public transport. You encounter a string of bad delays. It's reasonable to conclude they'll end—otherwise people wouldn't take public transport. It's unlikely that you happened to show up right when the network collapses.

Of course, that's a bad heuristic in a casino, which relies on a constant influx of losers. But in other environments, particularly with persistent populations and no evidence for sudden changes in the underlying laws, it makes sense.
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Seq
Seq
@CryptoSeq
1/ @MIT discussing the need for blockchain gateways to achieve interoperability across different blockchain networks, and to support the cross-blockchain mobility of virtual assets

https://t.co/PbjQkSlTT3

@quant_network are collaborating with MIT in the creation of ODAP

$QNT

2/ "In order for blockchain-based services to scale globally, blockchain networks must be able to interoperate with one another following a standardized protocol and interfaces (APIs)"

Gilbert founded ISO TC307 which 60 countries are working towards standardizing the interfaces


3/ "We believe that a blockchain gateway is needed for blockchain networks to interoperate in a manner similar
to border gateway routers in IP networks. Just as border gateway routers use the BGPv4 protocol to interact with one another in a peered fashion we believe that a...

4/ blockchain gateway protocol will be needed to permit the movement of virtual assets and related information across blockchain networks in a secure and privacy-preserving manner"

You can read more about the gateway protocol ODAP in this 21 tweet


5/
"We motivate the need for blockchain gateways and blockchain gateway protocols in the following summary:

✅Enables blockchain interoperability:
Blockchain gateways provide an interface for the interoperability between blockchain/DLT systems that operate distinct consensus...
CRYPTO
Subhadip Nandy
Subhadip Nandy
@SubhadipNandy16
Will start this thread with a disclaimer. I have never invested a rupee in cryptos 😀

But I have studied bull and bear cycles and financial bubbles extensively. Saw 1992, 2000, 2008 with own eyes. The first one as a novice, the next two when I knew to analyze

The amount of chatter I am seeing in friends, family and social media about cryptos has gone through the roof. For everyone, it's a dream to make 100x or even 1000x easily. Basically, become stinking rich easily
( it never happens )

In any financial bubble, the top is made in extreme speed and violence. The distribution happens on the way down. Unless one saw the rates of 65k on bitcoin, one wouldn't buy at 30-35k or 20k. That 65k is an anchor point which leads to greed

During the tulipmania, a single piece of tulip reached a price of $750,000 in today's money. When we see that history, we think "what idiots". But consider this, as of now meme coins generated by someone in their garage are being traded at absurd prices


Then there is this joke called NFT. A piece of "digital art" basically made by someone on their computer ( who is not even a known artist) are being sold for millions of dollars
CRYPTO
XRPatience
XRPatience
@xrpartisan
1/22 Why XRP will beat Bitcoin.

(Video version @ https://t.co/VIHEoHLYpN)

A thread. 👇


2/22 Despite last night's major Bitcoin correction, it still sits at $33k, well above the last bull run's all time high. With XRP currently at $0.28, it may seem rather ridiculous to think XRP will ever become #1.


3/22 However, it's important to compare Bitcoin and XRP not in terms of price, but market cap. That's because there are 100 billion XRP (and will never be more) and 19 million circulating Bitcoin (21 million max). So comparing the price of individual tokens doesn't work.


4/22 XRP's market cap is $12.6 billion. Bitcoin's is $623 (roughly 50x more, 55x if you factor in the 2 million Bitcoin not yet mined). That's a huge lead, but not as big as the 119,000x lead if you compare token price!


5/22 Bitcoin's primary advantage is its early adoption. It caught on earlier and became the front runner of crypto. Don't underestimate the power of being first. It gives a massive advantage. But it doesn't GUARANTEE being the winner long-term.
CRYPTO

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The first ever world map was sketched thousands of years ago by Indian saint
“Ramanujacharya” who simply translated the following verse from Mahabharat and gave the world its real face

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Dhritarashtra's charioteer so that he could describe him the events of the upcoming war.

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सुदर्शनं प्रवक्ष्यामि द्वीपं तु कुरुनन्दन। परिमण्डलो महाराज द्वीपोऽसौ चक्रसंस्थितः॥
यथा हि पुरुषः पश्येदादर्शे मुखमात्मनः। एवं सुदर्शनद्वीपो दृश्यते चन्द्रमण्डले॥ द्विरंशे पिप्पलस्तत्र द्विरंशे च शशो महान्।

—वेद व्यास, भीष्म पर्व, महाभारत


Meaning:-

हे कुरुनन्दन ! सुदर्शन नामक यह द्वीप चक्र की भाँति गोलाकार स्थित है, जैसे पुरुष दर्पण में अपना मुख देखता है, उसी प्रकार यह द्वीप चन्द्रमण्डल में दिखायी देता है। इसके दो अंशो मे पीपल और दो अंशो मे विशाल शश (खरगोश) दिखायी देता है।


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Based on this shloka, Saint Ramanujacharya sketched out the map, but the world laughed
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