Ready Player One - Market Monday LITE (08/16)
How Ethereum is a platform for permissionless money games
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Dear Bankless Nation,
In November we talked about the concept of Money Games in Ethereum: The Money-Game Landscape. In short, Ethereum is a platform for wealth-maximizing games.
Ethereum is a State-Machine. It has rules and turns in which players are allowed to execute moves. Every block, players are allowed to make moves. The rules of the game they are playing are created by Ethereum’s smart-contracts and enforced by Ethereum’s EVM.
As we speak, there are games being constructed, deployed, and played on Ethereum.
I’m talking about Money Games.
Applications on Ethereum offer financial rewards to their players, and there’s a rapidly growing set of possible moves to achieve these rewards.
As we recently saw with YAM, and earlier with YFI, Ethereum has embarked upon a new domain of MMO Money Games. Massive Multiplayer Online games where the goal is to win money. These new MMO Money Games offer opportunities to make money, and some money-making strategies are better than others. They also offer risk, both in smart-contract risk but also the risk of its players misreading the next moves of all the other players (aka, the market).
Money games are a speculators paradise. Money games are inherently addicting because winning the game makes you money. Money games are enticing because they create the possibility of making moves that can carry a player from rags-to-riches.
Like all games, some players are better than others. If it is your first time playing such a game, you may be someones else’s easy prey.
Like all games, it takes time to understand the game and improve your play.
New Valid Moves
2020 so far has been defined by the emergence of many different valid moves in the Ethereum and DeFi space.
Compound and COMP: Token distribution via supplying assets & governance.
Synthetix and SNX: Yield farming and protocol-issued rewards
Ampleforth and AMPL: ‘Rebasing’ reflexive supply adjustments
Yearn and YFI: Yield farming and governance over cash flows & treasury
All these different protocols and their respective mechanisms add something new to the library of available mechanisms known to the DeFi universe.
Rule #1: Keep Yourself in the Game
As in life, winning Ethereum’s money games depend on how the player defines victory. Only you can decide what constitutes ‘winning’. Your win-condition may be different than someone else’s. If you see an ETH whale on Crypto-Twitter making a specific move in the DeFi landscape, it is likely because it fits their playstyle and their ability to play both offensively and defensively.
Your own playstyle is only best suited for you, and it’s highly correlated with how experienced you are at the game. You shouldn’t try and copy someone else’s strategy, because you don’t know what their specific goals are. Their moves may not be appropriate for your win-condition.
If you want to be good at the game, you first need to learn how to play it. When you discover a new game, you don’t put it on ‘expert’. You start with ‘easy’ or ‘normal’ until you feel ready to move on.
The best part about Ethereum is that it is an infinite game. So long as Ethereum produces new blocks, new moves are able to be made. However, you as a player can lose your resources and end up having your viable moves severely limited.
The number 1 rule is that you always position yourself in such a way that keeps you in the game. Breaking this rule can end the game. So long as you do not break this rule, you will always have the opportunity to accumulate wealth.
Avoid the GAME OVER screen at all costs
As you accumulate wealth, you unlock more possible moves. Having more capital and more knowledge makes both of those things come easier, so long as though you don’t get out in front of your skis.
Having all the moves unlocked is how you win the game.
I personally haven’t unlocked all possible moves yet. I’m still learning like everyone else! Ethereum developers have only discovered a very small percentage of the total valid moves there are.
Bitcoin was the world’s first MMO Money Game, and its game was simple: accumulate all the bitcoins! Its simplicity makes it very compelling and easy for people to learn how to play. Just buy BTC and hold it!
Ethereum now offers a platform for all possible money games. As gamers grow up, they want more complex and challenging games. The current explosion of Money Games on Ethereum is an attempt to serve that need.
I’m looking forward to the different moves that Ethereum enables over this next wave usage and experimentation.
🎙️NEW EPISODE—AMA #1: Kain Warwick of Synthetix
Our regular podcast episode (#26) will be released tomorrow.
Scan this section and dig into anything interesting
Market numbers 📊
ETH rises 11.3% to $440 from $395 last Monday
BTC ticks up 3.9% to $12,375 from $11,901 last Monday
TVL surges 33.6% to $6.35B from $4.75B last Monday 🔥
DAI stability fee steady at 0.00% with savings rate still at 0.00%
Market opportunities 🤑
Trade tokens w/ Loopring for instant & low-cost txs (use BANKLESS for 6 bps fees)
Lend USDC on dYdX for 10.28% APY (highest on the market + get 10% off fees)
Trade DeFi tokens at the best price using DeBank Swap tool (new!)
Deposit wBTC on Compound for 3.19% APY + COMP tokens
(get a higher rate in the yield farming 🌾section!)
Yield Farming 🌾
What’s new 🗞️, what’s hot 🔥, & money reads 📚
WHAT I’M & WHAT YOU’RE DOING
Make time to complete this assignment before next week
Weekly assignment is dropping tomorrow!
DeFi Dad is going show you how to leverage one of the best yield farming plays in the game today. Meanwhile, here’s a good pre-requisite for tomorrow’s assignment.
How to farm yield with stablecoins on Curve
Make sure to check out tomorrow’s Tactic to level up on Curve!
Extra Credit Learning
Some recent tweets…
Execute any good market opportunities you saw
Complete weekly assignment: Dropping tomorrow!
Listen to our AMA with Kain Warick of Synthetix(Weekly episode drops tomorrow!)
🙏Thanks to our sponsor
Aave is an open source and non-custodial protocol for money market creation. Originally launched with the Aave Market, it now supports Uniswap and TokenSet markets and enables users and developers to earn interest and leverage their assets. Aave also pioneered Flash Loans, an innovative DeFi building block for developers to build self-liquidations, collateral swaps, and more. Check it out here.
Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.
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