BC CRYPTO
Saved by @ThomassRichards

1/ Welcome to #DeFi Wednesday.

Let's talk about how interest-bearing cash on a blockchain is going to revolutionise boring corporate treasury management that concerns every company is is a larger business than all crypto trading in the world.

Enter the thread

👇👇👇

 2/ Blockchain community is often seen as toxic maxis and redditors who shill other their weekly favourite shitcoin in the hope of getting Lambo.

Sometimes we also do things that progress humanity towards the better future and interest-bearing cash is one of those things.
3/ Less chad and more things that actually matter:

My incomplete theory of interest-bearing cash is also available also as a blog post:

https://t.co/uiG0fZiVyu

It is 15 pages. Pick your slow poison or die fast by continue reading here.
4/ First time in the history we have an ability to create interest-bearing cash-like instruments.

Interest-bearing cash ticks up dollar (euro) balance real-time in your wallet.

Here is a demonstration using @aaveaave aDAI, based on @makerdao DAI, and @TrustWalletApp
5/ Interest-bearing cash is not like your bank's saving account. Your money in a bank is not yours, but bank's. There are some flaws in the current banking system causing a headache for Chief Financial Officers (CFOs)
6/ Ability to have interest-bearing cash will crank the efficiency of revenue and receivable management to 11.

Treasury managers no longer need to move money between the portfolio accounts and cash in hand.
7/ This is especially handy in the time of asset inflation. Chief financial officers should value stored in assets that keep going up.

More about asset and other inflations in this newsletter from @LynAldenContact "Defining inflation"

https://t.co/FaDhO9hTYZ
8/ But let's start from the beginning.

Why this innovation could not have happened before? How interest-bearing cash is related to cryptocurrencies, but not being a cryptocurrency itself? What is the history that brought us here.

👇👇👇
9/ We can roughly classify payment and treasury management financial assets to two categories:

Money and securities (equities, bonds) and then non-liquid assets like real estate and your art collection.

Here is a full picture.
10/ From the point of information infrastructure (IT), money and securities run on different "rails". Below is how we ended up in this situation.

You cannot "send stocks and shares on PayPal"
11/ Money is traditionally called a "bearer instrument". Because anyone who carries paper bills can use them to make payment.

Whereas stocks and bonds are "registered" held on a broker and you pay your broker (and 100s of other middlemen) for this fantastic service.
12/ The divide between bearer and registered instruments isn't that black and white nowasdays.

Most of money is on registered bank accounts. Bearer bonds are a thing, because registered bonds are too expensive and investors prefer the freedom they give.

https://t.co/wW6nqjTZN0
13/ Distinction between money and securities rails is legal and regulatory.

For both online bank accounts and online broker accounts computers the same thing: when you buy something in a transaction computer debits one account and credits another.

Computer does not care.
14/ Your money is on a bank account. Checkings and savings account no longer give meaningful nominal interest, not to mention real interest. You lose value every day your money is in a bank.
15/ Negative interest is rarely pushed to retail bank accounts, but corporate accounts already suffer from it. Businesses, especially large ones, are bleeding that -0.35% plus tons of other corporate banking fees every month.

https://t.co/WSSLEV9o0Q
16/ Having money in a bank is also a risk. The financial crisis of 2008, Cyprus haircut, etc. near-history events show this. The fractional banking system is overleveraged.
17/ Because of the counterparty risk of having your assets in a bank, large capital seeks another medium of exchanges and store of value. Enter the bonds. Especially treasury bonds (T-bills in the US).
18/ With national treasury bonds the counterparty risk you have is only with a state. Granted, countries default now and then, but it is still an order of a magnitude improvement over having a counterparty risk with an overleveraged bank.
19/ Treasury bonds are used as collateral for trading. Large funds, like pension funds, store wealth in them.
20/ Granted, bonds are also going to negative % territory.

There are still ways to get profit margins out of them. You can e.g. trade the negative yield bond with "roll downs" for profit.

https://t.co/nJGVHG1rnc
21/ But one thing you cannot do with a bond is to pay your cup of latte. The IT rails for securities are optimised for large transactions. The fixed overhead per transaction is too high to use them as a medium of exchange for good and services.
22/ Here is the summary of "drivers" for interest-bearing cash

- An account in a bank is not good store of value

- Having assets in a bank poses a counterparty risk

- Bonds are already used as MoE a SoV in large transactions

- Computers do not care what you use for a payment
23/ What is interest-bearing cash and how it is created?

Let's look at the example running on @aaveaave protocol

👇👇👇
24/ What if we can combine good medium-of-exchange and store-of-value properties in the same financial instrument?
25/ The original promise of Bitcoin was this: "peer-to-peer" cash.

Unfortunately, #Bitcoin and other cryptocurrencies proved too volatile to be used as a medium of exchange. The coffee shop small business owner is in troubles if his December revenue received -33% haircut.
26/ We need something with the stability of bonds, decent yield and the cheap, efficient way to transact as we have with cash.
27/ Aave is a money-market protocol that matches lenders are borrowers.

Although Aave supports interest-bearing aTokens for every possible token, US dollar-based markets are the most popular ones.
28/ When you put 100 USD into Aave lending pool as a lender, you receive 100 aUSD "aTokens" back.

Here is an example using tokenised GUSD dollar from @Gemini exchange, from @tyler and @cameron Winklewoss fame.
29/ The underlying lending pool receives interest. The corresponding aUSD amount in your wallet goes up in real-time.

Here is @aaveaave aDAI balance ticking up real-time in @trustwallet

(Animation sped up for the effect)
30/ When you make a payment with aUSD, you will debit the dollar amount from your account as normal. The trick here is that the receiver who gets aUSD starts gaining interest on the moment of payment.
31/ If transacting payer and receiver in are happy with the (low) risk profile of Aave USD pools, they never need to do "downshift" to money money, making smaller number of transactions and having yield generating capability maximised.
32/ Aave aTokens are not only interest-bearing cash tokens in #Ethereum. As far as I know, the concept was originally piloted by rDAI (redeemable DAI, @rDAI_dao)

https://t.co/SSPFd746Fy
33/ What is the innovation that makes interest-bearing cash possible now?

"Ethereum of course!" would be a nice shilly answer, but there is more into it.

Here is a breakdown of the last 7 years of blockchain development.

👇👇👇
34/ Stablecoins were created in 2014. The first one was @officialnubits, soon followed by Tether. They predate smart contracts.

You need to have something pegged to USD or EUR to call it stable.
35/ Then we have smart contracts that were created with #Ethereum

Smart contracts enable non-custodial, counterparty risk-free transactions, like ones with a lending pool.

No bank manager can mismanage your funds.
36/ Blockchain has #opensource ecosystem and a public ledger.

It is almost zero cost for third parties to integrate with.

Whereas Visa/Mastercard, etc. are behind proprietary protocols where you pay up just to read the documentation.
37/ To have yield, you need demand (borrowers)

#DeFi protocols, in development since 2017, demand in stablecoin borrowing started 2020: reached a maturity level they really took off.

https://t.co/QJNzRKYzCN
38/ Currently DeFi lending is mostly used by crypto traders, but this does not need to be the case.

5% - 15% interest is in a range of a Western credit card or developing nation business loan.
39/ We really are there - the only problem to figure out is blockchain scaling.

I am happy to see @NEARProtocol and @ElrondNetwork doing excellent work here.
40/ But how about the risk?

That's the first question from every CFO.

👇👇👇
41/ Historically, March 2020 was the first real life stress test for #DeFi

Cryptocurrency, most prevalent collateral in lending pools, crashed down billions of dollars in value.
42/ DeFi still held.

MakerDAO took $4M haircut, but it is peanuts compared to the total value of DeFi lending pools.

https://t.co/jHNUMhDt8f
43/ The systematic risk in smart contract-based lending pools is smaller than in traditional banking.

- Positions are always collateralised

- Asset baskets are 100% transparent

- No insider fraud

- No credit card
44/ Granted there is technology risk.

What if smart contracts have bugs in them?

However this risk is a fixed cost and relative to the size of Assets Under Management (AUM)
45/ Also, being conservative with collateral also means that crypto margin trading, longing/shorting, is less capital efficient than professional stock markets.

Wall Street and London City traders complain they cannot do 100x kek kek.
46/ How about the future?

Here is the part where I tell you banks will die.

👇👇👇
47/ I see the future of treasury management as a web page dashboard.

CFOs to adjust the treasury risk/reward ratio based on their corporate needs. Underlying positions are automatically updated.
48/ Whenever a payment is made, it goes out in an interest-bearing instrument. In business-to-business payments, there is no need to exchange instruments forth and back to money on a checking account if both parties are happy with the underlying risk parameters which are low.
49/ A “downshift” back to legacy money rails is only needed when a payer conducts payments requiring a legal tender, like taxes.
50/ When there is less need for parties to go back and forth to actual money and cash, there is less need for banks.

The whole banking machinery can be replaced by a smart contract having money inflows, outflows and risk parameters.
51/ Automated smart contracts are vastly more efficient than banks that tend to high-cost structure and management bonuses.
52/ There is also less need for eMoney companies (PayPal) and card companies (Visa/Mastercard) because blockchain rails are open and operate payments more efficiently with less staff.
53/ Due to the open and global reach of blockchains, it is easier for people to opt into different payment instruments instead of a national bank account. People’s savings in interest-bearing cash are less punishable by monetary policy screw-ups
53/ Screw ups like Lebanon

https://t.co/2l5xjUe3Ja
54/ Screw ups like Turkey

https://t.co/Q7ixK0tY7u
55/ Raise of flexible interest-bearing cash-like instruments mean national central banks, and Federal Reserve and European Central Bank, have less room to manipulate monetary policy to cover issues with over-indebtedness, both government and financial system in general.
56/ Why would you accept bad government money, when there is an easy way to accept sound Internet money?

FIN.
57/ Ps. The link to the full blog post again - please share to your CFO

https://t.co/uiG0fZiVyu

More from Crypto

I'm just a doggie boi
I'm just a doggie boi
@fubuloubu
I'm sure someone else has explained this, but it is just so cool and I want to explain how this works.


So Curve is awesome for swaps between similar assets, right? The fact that they trade very close to each other is a key part about how Curve works, using it's custom swap invariant function.

That's step 1

Step 2 is that Synthetix is awesome for creating "synthetic assets" (aka synths) which are assets that trade like other assets, that are backed by another, entirely different asset. Basically, a plastic banana that I can buy and sell like a real banana.

Synthetix has a feature that lets you swap between any two synths with zero slippage and a flat fee. That's because it is simply converting the sythentic asset into another synthetic asset, the backing for the synth doesn't change it just uses a different price oracle now.

This is important. Absolutely no slippage, at any size

Swap $1m sUSD for $1m sBTC? flat 0.3% fee

Swap $10m sUSD for $10m sBTC? flat 0.3% fee

swap $100m sUSD for $100m sBTC? Well, there isn't that many synths in Curve, yet but you get the point. The only limit is the pool depth
CRYPTO
Jin
Jin
@Jin_8315
A primer on how to use @coingecko for your crypto data/research/trading needs.

Share it with a friend who needs it!

1/ Getting started with crypto and want to check prices/projects? https://t.co/LFnk4vukxj has info on just about every crypto you'll need :)


2/ Search over 6000+ cryptocurrencies available on the market. You can see what's trending in the space as well.

Researching by categories? Filter (left side) -> Select categories -> DeFi, DOT ecosystem, Exchange-based tokens, NFTs - anything!


3/ Lets say you're looking at #Bitcoin https://t.co/g205lj03pG

At a glance you get:
- Price
- Mkt Capitalization (valuation)
- Circulating/Total supply
- 24h trading volume
- Links to websites, social media, block explorers
- Calculator

Next - check valuation?


4/ Market cap is used to rank coins, and we'll show you how its calculated - Hover over Circulating Supply (?) for breakdown.

Note: used @chainlink as example here - https://t.co/Jc46fe79Ag

While MC is important also consider product fit, narrative, team, community etc.


5/ If you're trading on AMMs like @Uniswap or @SushiSwap, you can copy the contract address directly to your clipboard.

Using @metamask_io? Add the token directly so it shows as one of the "Assets" that you own in the wallet.

See: https://t.co/94XihMf5oz
CRYPTO
Advertisement
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
Finshots
Finshots
@finshots
What happens to your cryptocurrency when you die??

A thread...

Did you know it’s illegal to log into a dead person’s crypto account?

So if you're a crypto investor and you died today, who reaps your fortune?

No one, technically, unless you name a beneficiary in your will. And it's a big deal as ~3.7M bitcoins, $140B is unrecoverable (excluding the 10k+ other cryptocurrencies) since the investor either lost their password or died intestate.

And you can’t just “reset” the password. This is because, when the cryptocurrency network confirms passwords to allow transactions, it does not see or know the password itself!

This complex algorithm keeps the system decentralized. So a lost password is lost money.
CRYPTO
Nick Chong
Nick Chong
@n2ckchong
If you've been following DeFi or Ethereum over the past few months, you've likely heard the term "flash loan" mentioned again and again.

This new DeFi primitive has been at the core of a number of economic exploits and arbitrages.

A thread on the basics of flash loans - 👇


Most DeFi loans take place across days, weeks, or even months.

You can deposit Ethereum into Aave, then withdraw stablecoins for yield farming in Yearn, for instance.

On-chain loans have garnered much traction, with total debt outstanding moving toward $2.5 billion.

While popular, DeFi loans are not capital efficient: to account for custodial risk and volatility risk, you need to put up 130-150% of the value of your loan in collateral.

If your collateral slips below the threshold, you're liquidated, resulting in a fee anywhere from 5-13%.

Flash loans are much different than longer-term DeFi loans.

Flash loans are non-custodial, take place over the course of one block, and require no collateralization.

That's to say, the coins you borrow never appear in your wallet.

When taking a flash loan, you can direct the coins to any protocol and function, as long as you pay back the loan + interest fee within the same transaction.

So what the hell? What are flash loans used for?

More often than not, arbitrage.
CRYPTO

You May Also Like

Groww
Groww
@_groww
You want to buy a house.

You take a loan from the bank.

The bank asks you, “what if you don’t pay back?”

You say, “take my home and sell it”.

(Thread)

That makes sense. The bank gives you a loan and in case you don’t pay, the bank will take over your house and sell it and recover its money.

That’s collateral.

Banks also lend money to big corporations. With them, banks don’t always have collateral.

So a loan where the bank has collateral is considered safer for the bank.

In the early 2000s, the banks in the USA were giving out loans to people for buying houses.

The economy had just recovered from the tech bubble in 2000 where many banks had given out loans to businesses that had shut down.

In that backdrop, the banks found giving home loans safer.
ALL , 2008 CRASH , 2008 RECESSION
Sumit Grrg
Sumit Grrg
@sumitgrrg
These 10 threads will teach you more than reading 100 books

Five billionaires share their top lessons on startups, life and entrepreneurship (1/10)


10 competitive advantages that will trump talent (2/10)


Some harsh truths you probably don’t want to hear (3/10)


10 significant lies you’re told about the world (4/10)
ALL , MOTIVATION , BOOKS
Advertisement
\u0936\u094d\u0930\u0940\u092e\u093e\u0932\u0940 \u0939\u093f\u0924\u0947\u0936 \u0905\u0935\u0938\u094d\u0925\u0940 \U0001f1ee\U0001f1f3
श्रीमाली हितेश अवस्थी ...
@HiteshAwasthi89
#Thread
An interesting story of Kamala Devi hazarika for all Sanatanis...🙏

A Xtian missionary was sent to Assam for the promotion of religion. His name was Cruz. He came across to one the boys from an influential family in Assam to teach him English.
@noconversion

Cont 👇


The p@stor slowly began to study the house and he learned that the boy's grandmother was the most influential person in the house. So he thought 'Corrupting the grandmother's mind can make the whole family Xtian as well as the whole village.

Cont 👇


The p@stor began to tell Grandma the stories of how J€$u$ cured leprosy of lepers, how He gave sight to the blind, etc..But after listening to him, the strong Sanatani grandmother said. A stone turned into a living woman (Ahalya) for our Rama when he touched the stone.

Cont 👇


She spoke of Rama setu where stones floated in sea just by writing his name on the stones and that they are still floating today.
The p@stor continued his efforts but all his tricks went in vain.

Cont 👇


One day he had brought a cake from the church and he thought of offering it to grandmother but he was doubtful that she would eat it. But contrary to his expectation, she took the cake and ate it.

Cont 👇
ALL
Will Buxton
Will Buxton
@wbuxtonofficial
The Haas / Force India argument is fascinating, and the decision of the stewards may still have consequences. The first key finding is that the stewards ruled Racing Point Force India to be a valid constructor. That means that it builds its own cars.

Haas had argued that the cars had been designed by Force India, but as Haas knows only too well, "outsourcing" is legal. The stewards decided that "there is no regulatory support for the argument that Outsourcing of Listed Parts cannot come from a former or excluded team."

In determining this, the stewards also came to the following conclusion: "In relation to the submission by the Racing Point Force India F1 Team that it is not a new team, the Stewards decide that the Racing Point Force India F1 Team is indeed a new team."

This will have a big knock on effect for Haas in its continued arguments over the rights of RPFI as relates to its eligibility and rights under the complex payments structure. Haas has argued all along that RPFI should be treated as a new team and tread the same path that it did.

TLDR? Haas lost the fight but may have won the war. In having its argument that Racing Point hadn't designed their own car thrown out, they gained clarification that RPFI was a new team.
SPORT
JayneshKasliwal
JayneshKasliwal
@JayneshKasliwal
ULTIMATE GUIDE TO 21 and 200 Moving Average
SUNDAY THREAD 🔖
A trend Following System That will Help You Improve Trading immensely.

RETWEET AND SHARE 🔄
@kuttrapali26 @AmitabhJha3
#stocks #StockMarket
1/n

Moving averages
EMA and SMA
1. Exponential Moving Average (EMA) is similar to Simple Moving Average (SMA), measuring trend direction over a period of time.
2. However, whereas SMA simply calculates an average of price data, EMA applies more weight to data that is more current
2/


21 EMA : SHORT TERM TREND
1. Calculates the Average Price of past 21 days
2. A stock above 21 ema is in strong momentum , which will give pullbacks to 21 ema again and again.
3. Stock above 21 ema should never be shorted so as to stay with the trend
3/n

3. A stock which moves 10-15% above 21 ema will be too extended and hence will generally pullback
Stocks take dynamic support on 21 ema
4. You can Short only if its too extended like 15 to 20% from 21 ema ( Not advised )
#ADANIPOWER:
#pnbhousing
4/n


1. Whenever 21 ema is sloping upwards its called uptrend
2. Whenever 21 ema is sloping downwards its called dowtrend
3. Whenever 21 ema is sideways its called consolidation
⏫Buy in uptrend
⏬Sell in downtrend
Examples:
5/n
MOVINGAVERAGES , MOVING AVERAGE 20021 , ALL


Category Partner: Enkryptopedia