musings - part 1 - galore
Last night there was an attempt by a Decentralized Autonomous Organization (DAO) to bid & buy the copy of US Constitution at the Sotheby's auction. The DAO raised $45 million from folks across the crypto space within 72 hours. Its most likely the largest crowdfund for a physical object and a first for Sotheby's. DAO didn't manage to win the auction but its another example of how active the crypto world is and how it craves for opportunities to interact back with the physical world.
In parallel world, in case you heard about MtGox distribution in the media (some professional research firms & media outlets have unfortunately confused themselves). There is no distribution on 20th Nov (tomorrow). Only thing that occurred was that the rehabilitation plan became final & binding after a 4 week cooling off (wait) period. I don't foresee any distribution until summer 2022 if not later. Moreover, following things need to take place:
- Fiat distribution - trustee has no official bank details of creditors for distribution
- BTC distribution - trustee needs to select crypto exchanges that he will liaise with + creditors will need to have themselves onboarded to one of the said exchanges once the list is made public
- Fork distribution - trustee will need to determine a manner in which he will auction the forks of BTC
- Best of all; the trustee's MtGox website needs to be updated for all these data input needs. I wonder if trustee may even ask crypto exchanges to only distribute the assets to the creditors at a certain time & date - if he wishes to be fair across all creditors (although not entirely sure if Japanese law stipulates that). Now that might well be time for a BTC short of life time to front-run all the panic hype.
Lastly, continuing with the thought experiment of last week to real-life example. OmiseGo (OMG) is another L2 layer on top of ETH. A protocol / network on top of OMG known as BOBA decided to airdrop (distribute) to OMG holders the BOBA tokens as long as they held a token once upon a time until a publicly disclosed date & time (around 7pm EST 4 Nov in this instance). This led to a spike in OMG spot price. This also led to a spike in borrow rate of OMG to go from relatively 0% to 300% (per annum) - people wanted to borrow & hold in their wallet so they could
"earn" the airdrop. In an interesting show of how various actors (speculators vs yield chasers vs professional) perceived this opportunity the spot & perpetual swaps markets diverged. Spot spiked whilst the perpetual swaps dropped. Upon snapshot, the spot marked nose-dived towards the perpetual swap price. The borrow rate started to return towards effectively 0%.
Conclusion: sometimes the best way to trade the crypto markets is to stay out until the craze/hype event is over because supply & demand gets extremely distorted in crypto world due to such artificial time sensitive factors. Majority of buyers of spot; borrowers; and shorters of perpetual swaps lost even if token holders "earned" a new token.
Interesting Reads / Listens:
Bloomberg's new economy forum's interview with Binance's Founder & CEO,
Changpeng Zhao (CZ) is one to watch. Even though in my past notes I have been strict with Binance, and yes they have a long way to go. However, CZ controls large swathe of crypto exchange market share. He also is up-front usually in his responses and controls a major fork of ETH network known as BSC which has been very active over the year.
Joanna Ossinger
Below is the overt indication of what I was referring to earlier in the year with regards to the push by crypto firms to attempt to leverage the DeFi world for their liquidity needs instead of coming back to TradFi.
