BC FINANCE
Saved by @ThomassRichards

My Chads, institutions and retail are entering the DeFi space at unprecedented volume. One of the key primitives in DeFi will be the securitization and tranching of DeFi and is still massively undervalued. Enter https://t.co/Gx4H3hIzNg ( $SFI ).

Don't worry, let me ELI5.

 1/ Alright so securitization and tranching, that's a mouthful. 👅💦

Let's take a step back. If you look at any financial activity within DeFi, whether it is yield farming, lending or liquidity providing, there are risks involved.
2/ As an honest farmer / liquidity provider, the rewards are yield, and the risk is losing your funds due to e.g. smart contract risk and (potentially) IL.

As an honest lender, the rewards are interest, and risk is default of the borrower.
3/ 99% of the current retail participants don't use portfolio risk management in their DeFi activities. We farm a bit, IL a bit, loan and borrow a bit and hope we make gains at the end of the day. For institutions, portfolio management is much different.
4/ The problem for institutions to enter such DeFi activities as yield farming, liquidity providing and lending/borrowing, is that it's inherently risky and not quantifiable with variable rewards. We early adopters don't mind this risk, but this prevents adoption by institutions.
5/ So what is securitization and tranching?

Securitization means taking several assets and pooling these together to create a new fancy asset.

Tranching means cutting a security into two or more several pieces, where each piece carries a different level of risk.
6/ Easy enough right? Let's do an example.

Imagine a risky activity such as being a LP to SUSHI/ETH on Sushiswap.

Uncertainty about rewards:
1. What's the price of SUSHI?
2. How much are the fees I receive?

Uncertainty about risk:
1. Loss of funds (e.g. SC risk)
2. IL
7/ The methods of securitization and tranching allows you to create new assets from an original asset (i.e. the SUSHI/ETH LP tokens is the asset in this case). For example, let's say we create one tranche for the retail apes that want risk, and one tranche for the institutions.
8/ SUSHI/ETH LP tokens split into (hypothetical):

SUSHI/ETH retail tranche:
- x5 multiplier rewards.
- IL
- If smart contract exploit, funds first go to INSTITUTIONS tranche.

SUSHI/ETH institution tranche:
- Low (potentially fixed) rewards
- Funds SAFU
- No (or reduced) IL
9/ Astute readers will realize that the SUSHI/ETH Institution LP tokens actually look more like a loan (low (fixed) rewards, and no/low smart contract risk). This is the power of securitization and tranching. It allows transformations of DeFi activities with set risk boundaries.
10/ The sky's the limit with securitization and tranching. Instead of splitting up one asset like SUSHI/ETH LP tokens, one could first pool certain assets together (securitization) and then divide those assets into distinct tranches (often called “junior” and “senior” tranches).
11/ But Chad, if securitization is so cool, is it used in the traditional Finance world? A picture says more than a thousand words. The derivatives market completely dwarfs the other global markets. Securitization (Credit Default Swaps anyone?) is HUGE. And for good reason.
12/ Now that we understand the power of securitization and tranching. Let's talk about one of the few projects in the crypto market that has a real shot of being the gateway for institutions to enter DeFi through securitization and tranching:
13/ Saffron Finance ( $SFI ) started in October 2020 with a fair launch. It launched through an epoch system, with rewards provided to farmers. Currently about 80% of the SFI is circulating, with hard cap of 100K SFI. The last epoch will finish 6 February 2021. TVL 50M USD.
14/ Besides the insane use-case, what intrigues me about $SFI are:
1. Its focus on the tech (no over-hype), which is needed for a complex product such as securitization and tranching. Also rumors about core dev being ex-CMC founder.
2. Strong community.
15/. 3. Though not the focus atm, interest from various projects and integrations are happening.
* Chainlink reached out (props to the amazing $LINK team).
* Talks with $ALPHA and rumored upon V2 releases there will be a collaboration.
*Cream integrations in v2
* $COMP tranches
16/ 4. Saffron Finance is going to be cross-chain compatibility initiative (e.g. Polkadot and Binance Smart Chain). Based on an AMA, more information will be released when development is in a further stage.
17/ The beauty about Saffron Finance is that it is not a competitor to existing DeFi projects, but empowers these projects. This allows for many interesting partnerships to happen, e.g. $YFI Yearn ecosystem farming tranches, $AAVE tranched loans, $SNX staking tranches.
18/ The above also embodies the power of decentralized finance. Securitization is typically done with loans in the traditional world. But the DeFi world has many yield bearing assets that are verifiable on-chain, and can be pooled together permissionless to create new assets.
19/ Currently Saffron Finance v1 platform has tranches for Compound / stablecoin farms divided into A, AA, and S tranches. A tranches bear the smart contract risk of the Compound platform and in exchange get a x10 yield, while the AA and S tranches do not incur such risk.
20/ The real innovation will happen in v2 of the Saffron platform. V2 will be in beta in the upcoming weeks, and will a.o. have:
- Lower gas costs
- Roll-over system (deposit once and forget, no more epoch system)
- Include more asset tranches
- Customizable risk params
21/ The end-goal of V2 is a complete customization, aggregation and/or splitting of risk factors of any DeFi activity. I expect major integrations to happen with various platforms in the upcoming weeks/months.
22/ As I said there are thousands of use-cases for Saffron, but some of the ones I am looking forward to:
A. Customizable risk yield farming / liquidity providing. Already partly in V1 of Saffron, but V2 will allow for much more customization in risk level.
23/
B. Fixed-interest delta-neutral yield farming / lp / loans.
Based on the risk customization, V2 will have fixed-interest/APY yield farming. The impact of this cannot be understated. Besides institutions, many crypto projects have huge unused treasuries (some 100M USD+).
24/ Why? Because projects do not want to deploy these funds when there's a risk of losing funds, or there is a variable APY. Variable APY's require management of funds, which crypto projects do not want to actively do. They want fixed rates for a long period of time.
25/ Any good (investable) project requires a clear use-case for its token. $SFI use-case will be:
1) Staking in the SFI staking pool to earn SFI.
2) Accrue fees regenerated from the protocol
3) Requirement for joining some tranches for enhanced yield
4) Governance
26/ I expect Saffron Finance to be a main pillar in the DeFi world in the upcoming months. It’s one of the sole projects in securitization. The integrations and coding will take some time, but that's the cost of being early in a project. You'll also reap the x100 gains though😉.
27/ As you can tell, I'm incredibly bullish on SFI. It's the % in my portfolio. So that should tell you something. Besides it being an incredible project, it also has a clear catalyst of V2 in the upcoming weeks. And we all saw what $ALPHA did in their run leading to V2.
28/ Oh and one more thing. Saffron Finance had a fair launch and therefore didn’t receive any funding. Currently 25% of the SFI are rewarded to the dev team.

This SFI has been used to secure a funding round by leading VC’s. These VC’s will be locked up. More announced soon.
29/ For more information I refer to:

Great interview by Psykeeper for Delphi:
https://t.co/77ZH9le7Lb

AMA + how to join liquidity pool video:
https://t.co/aHqd84VLvi
Medium posts:
https://t.co/VEi6b8SuDc

Great article from Messari about the scope of fixed income protocols: https://t.co/jLc8gNBssg

More from Finance

10-K Diver
10-K Diver
@10kdiver
Get a cup of coffee.

Let's kickstart 2022!

To that end, here are 22 key concepts to help you appreciate and achieve Financial Independence.

Concept #1.

What is Financial Independence?

It's a state of *self-sufficiency*. It's when you have enough money, and enough income-producing assets, that you and your family can live comfortably for the rest of your lives -- WITHOUT needing a job.

Concept #2.

Financial Independence is not really about spending MONEY how we like -- although, to an extent, that becomes possible.

It's about being FREE to spend our TIME how we like.


Concept #3.

Financial Independence is not really about quitting our jobs and retiring from work -- although that's possible.

It's about being FREE to pursue *whatever* kind of work we find most fulfilling. Things we love to do. Things the world benefits from. Etc.


Concept #4.

For most of us, the path to Financial Independence consists of:

- Starting Early,
- Saving Diligently, and
- Investing Responsibly.

Here's an inspiring story of a janitor who amassed an $8M fortune by following this very playbook:
FINANCE
@AdamSmithWorks
@AdamSmithWorks
@adamsmithworks
Today we're gonna talk about profits. They come from stock! #AdamSmith reminds us that stock is any resource paid for in advance when doing business. In general, profits and wages don't move together. (I.ix.1–2) #WealthOfTweets #SmithTweets

As stock goes up, there's more of it to employ more workers (by paying them or providing machines for them to work or both). This raises wages! But new stock competes with existing stock, which tends to lower profit. (I.ix.2) #WealthOfTweets #SmithTweets

If you thought figuring out the average wages of labor was complicated, don't even think about trying to figure out the average profit of stock. Basically impossible. Luckily, the rate of interest tends to vary with the profits of stock. (I.ix.3–4) #WealthOfTweets #SmithTweets

Lots of laws have tried to control interest rates and stop usury. They've all failed to do either. (I.ix.5–9) #WealthOfTweets #SmithTweets

Profits and wages rising together is unusual, but it happens. In particular, in new colonies. (I.ix.11) #WealthOfTweets #SmithTweets
TRADING , FINANCE
Advertisement
Neil Bananas Bharadwa \U0001f44a\U0001f3fd
Neil Bananas Bharadwa ...
@MrNeilB
Having made over 1000 boxes for vulnerable families in Cambridge via @RedHenCambridge (thanks to our customers 🙏🏽) My thoughts on the £30 box thing. Lots of factors at play here. 1/

If the pics in this @BootstrapCook thread are true and correct then the Govt/taxpayers & families in need are getting absolutely SHAFTED 👇🏽 2/


There are some mitigating circumstances. A £30 box won’t ever contain £30 (retail) worth of food - people aren’t factoring in
-the cost of the box
-paying someone to fill it
-rent & rates
-& most expensive the *transport/distribution*

3/

If you’re doing the above at scale. Delivering *across the UK* it’s not cheap BUT IMHO there should be at LEAST £20 worth of groceries in a £30 box. To get more value they need more fresh produce. Just carrots & apples is terrible. 4/

I’m gonna put my rep on the line here & say something about these big national catering companies whose names I’ve seen mentioned. They are an ASSHOLE to deal with & completely shaft small businesses like mine with their terms which is why I won’t deal with them. 5/
FINANCE
Joe Du Bey
Joe Du Bey
@joedubeytldr
🧵: The 10 Metrics for SaaS Startups (an Operator's Guide)

Focusing on the wrong things can kill your startup.

Based on founding and scaling @edenworkplace, here are the metrics that matter most:

Metric 1: ARR (Annualized Recurring Revenue)

You will need to know this number each day, so you'll focus on Contracted ARR in your CRM tool (as opposed to accounting ARR).

Big ARR milestones are $100K (Signal), $1 million (PMF), $10 million (Growth), $100 million (IPO Scale)

Metric 2: ARR Growth

Once you get past the Signal stage, your ARR growth is the primary determinant of future success (and valuation).

Strong annual growth rate from Signal to PMF is 4x+ and from PMF to Growth is 2.5x+.

@edenofficemagic grew 11x between Signal and PMF stages.


Metric 3: ACV (Average Customer Value)

ACV often starts low for a SaaS company (as your product is not featureful enough for large enterprises) and grows as the company moves upmarket.

ACV is calculated by taking total revenue and dividing it by your number of customer logos.

Metric 4: ACV Growth

Most SaaS companies will make ACV growth a focus.

It is fair to increase revenue per customer as you add more value to users in new features, integrations, and products.

@edenofficemagic grew ACV 2.3x last year, mostly through cross-selling new products.
FINANCE
The Better India
The Better India
@thebetterindia
(1/14) The World Bank’s 2017 report titled ‘Precarious Drop’ pointed out how nearly 20 million Indian women were ‘missing’ from the workforce during 2004-2012.


(2/14) While media reports and headlines might have put the onus on women themselves, it is hard to ignore that there are many challenges that hinder women from rejoining the workforce post a career-break taken for several reasons, including childbirth.

(3/14) Out of those who manage to rejoin the workforce, many women eventually drop out in less than 6 months. This was due to “lack of awareness about inclusivity” in corporate offices in the ’90s, points out Dr Saundarya, someone who chose to be the solution to this problem.

(4/14) Having experienced all the challenges of a returning female professional, she founded Avtar in 2000, as a diversity and inclusion platform that helps women get a second shot at building their careers.

(5/14) And, recently, in November 2020, she expanded her focus through MyAvtar — a job portal for people from marginalised backgrounds, to include the LGBTQ+ community as well.
FINANCE

You May Also Like

Techno Funda Investing
Techno Funda Investing
@TechnoFunda6
Thread 🧵explaining #ROE & #ROCE and its use in #FundamentalAnalysis

(Must read for #FA learners)

🙏Like & RT to spread learning with all 🙏

Views Welcome 👉 @dmuthuk @Vivek_Investor @datta_arvind @caniravkaria @FI_InvestIndia @AdityaD_Shah

#FundamentalAnalysis #StockMarket


1⃣

Return on Equity (#ROE) and Return on Capital Employed (#ROCE) are two important Financial Ratios used in #FundamentalAnalysis of Stocks.

#StockMarket #Investing

2⃣

Return on Equity (ROE) is the ratio of Net Income (Net Profit) of a company and it’s Total Equity (Shareholder's Equity).

Here - Shareholders Equity = Share Capital + Reserves & Surplus.

#StockMarket #Investing #FundamentalAnalysis


3⃣

#ROE is a measure of how much net profit a company is making for every rupee invested by its shareholders in the company.

It can be said that higher the ROE, better it is for the equity shareholders. It tells shareholders about how effectively their money is being used.

4⃣

However, you should not trust high ROE blindly. Biggest drawbacks or weaknesses of ROE is that it completely ignores debt.

Hence for companies having high levels of debt, ROE will give a higher but misleading value & therefore we need to look at #ROCE along with #ROE.
ACCOUNTING , FUNDAMENTAL ANALYSIS , ROE VS ROCE ANALYSIS
Abigail See
Abigail See
@abigail_e_see
Can we control the output of neural generation systems?
Can we build a better chatbot using this control?
And what makes a good conversation anyway?

Check out the blog post for our NAACL paper:

https://t.co/UAAUxSeA0L

#AI #NLProc #DeepLearning #ConversationalAI @facebookai

This post got a little delayed since the paper's publication, but the intervening time has given me an opportunity to reflect.

So this post has some extra thoughts regarding more recent NLG developments - e.g., pretrained models like GPT(2), and the suitability of beam search.
ALL
Advertisement
Zen Black
Zen Black
@z3nblack
1/ Thread: "A Silicon Valley Ponzi Scheme"

Thanks to @chamath for laying this out in Social Capital's 2018 annual letter.

I've always appreciated his outspokenness.

2/ The hardest thing for most startups today is the path to market: first finding product-market fit & a way to reach customers, then building a ruthless machine to acquire, monetize & retain them.

3/ Because of this, when the VC industry invests capital into fast growing startups today, the plurality (if not majority) of invested capital will go into user acquisition and ad spending, for better or worse— usually worse.

4/ Todays massive venture-backed advertising, sales, and user acquisition playbook has morphed into one that champions growth at any cost.

This is creating a big bill that will soon come due...

5/ Ad impressions and click-throughs are bid up to outrageous prices by startups flush with venture money, and prospective users demand more and more subsidized products to gain their initial attention.
TECH , STARTUPS , {TEST FOLDER}
Buzz Chronicles
Buzz Chronicles
@buzz_chronicles
@SaveToBookmarks Namaste! You can find it here. Original tweet by @AchuthArora: "@OllieEmberson @buzz_chronicles @rattibha @SaveToBookmarks save as Workouts". Thanks! ✌

Hi! Pleasure is mine. Original tweet by @SaveToBookmarks: "@AchuthArora @OllieEmberson @buzz_chronicles @rattibha Cool mate!

I saved this ...". See You soon! 👌
ALL
Lakshminarayan G
Lakshminarayan G
@narayanagl
The Chanting of following names of Bhagwan Vishnu, immensely helps us in overcoming the obstacles in our daily life.
These names are from Sri Vishnu Sahasranama!
|. "Om Vashatkaaraaya Namaha" : For Success in Business.
||. "Om Aksharaaya Namaha" : For Success in Studies.


|||. "Om Bhuthabhavanaya Namaha" : For Good Health.
|V. "Om Paramaathmane Namaha" : For Self Confidence.

Src: VAK magazine from Chilkur Balaji Temple, Hyderabad - Sri @csranga
#SanatanaDharma #SanatanaSanskriti #Sattology

One needs to chant the following slokas 28 times to get rid of certain problems in life.
Om Hrushikesaya Namah - For Overcoming Bad habits
Om Vashatkaaraya Namah - For Success in Business, Interviews, visa interviews, building relationships


Om Srimate Namah - For Handsome appearance & wealth
Om Aksharaya Namah - For Education & better financial strength
Om Paramatmane Namah - For self employed people, for promotions and success in games.
Om Putatmane Namah - To remove mental stress & for mental peace


Om Sarmane Namah - For Job Satisfaction
Om Bhutadaye Namah -To amend soured friendship or any personal relationship
Om Dhatre Namah - For issueless couple
Om vidhatre Namah - Pregnant Ladies to Chant for healthy babies.
Chant the following 108 times :
ALL