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The 3.5% Rule (Market Monday)

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The 3.5% Rule (Market Monday)

How 11m passionate crypto users can change the world

Ryan Sean Adams
Sep 30, 2019
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The 3.5% Rule (Market Monday)

newsletter.banklesshq.com

Level up your open finance game three times a week. I’m releasing this Free for Everyone until November 1. Get the Bankless program by subscribing below.


Dear Crypto Natives,

It’s Market Monday! Every week I scan the open finance market to surface the best opportunities and insights for us.

—

Non-violent protests are twice as likely to succeed as armed conflicts. The ones that engaged 3.5% of the population never failed to bring about a change.

This is called the 3.5% rule.

Throughout history we’ve seen an intolerant minority gain the ability to impose their virtue on the majority through sheer willpower: civil rights movement in the U.S., Gandhi’s Quit India movement, the People Power movement in the Philippines—a determined minority can tilt the world.

Going bankless is form of non-violent protest.

Holding non-state currencies. Using an alternative financial system. Believing in self-sovereign money. It’s opting out of a system.

The separation of money from banks is our revolution.

And it’s a revolution in technology—too beneficial to be stopped. A society can’t afford to ignore it. They’ll fall too far behind. It’d be like ignoring the next internet.

But how long will it take—how many of us have to go bankless first?

The 3.5% rule shows that the few can tilt the world of the many:

  • 3.5% of the world is only 270m people

  • 3.5% of Africa is only 42m people

  • 3.5% of Argentina is only 1.5m people.

And 3.5% of the U.S. is only 11m people.

Can we get 11m passionate users of crypto finance?

We still have a ways to go. But maybe we’re closer than we thought.

- RSA


ETH and BTC prices were crushed last week—but fundamentals didn’t change so that means we just keep dollar cost averaging—steady hands, no blinking


MARKET MONDAY:

Scan this section and dig into anything interesting

Market numbers

  • ETH down to $174 from $209 last Monday

  • BTC down to $8,132 from $9,918 last Monday

  • Maker stability fees down to 10.5%—almost single digits

Market opportunities

  • (Borrow) Margin trade bonus 2x first 250 at Neo (just launched—have not used)

  • (Lend) Last day to get $50 for funding BlockFi account (6.2% BTC / 4.1% ETH)

  • (Lend) Compound is the best place to lend DAI now at 8.3%

  • (Trade) Dex.ag is aggregator w/ good rep (alt. to 1inch where guy lost $24k wk)

  • (Trade) using limit orders on Uniswap? Wow!

  • (Invest) in ENS short domain—few days left on auctions (google.eth at 16.75ETH)

  • (Trade) with Dex.blue (Bankless subscriber impressed w/ delegated key UX)

  • (Earn) BTC while you shop using Fold app (buy gift cards—earn BTC)

  • (Earn) also try Pei or Lolli to earn BTC while you shop (have not used)

  • (Borrow) Trinito claims lower rates than DyDx (3% DAI is too good—beware!)

  • (Give) $1 can fund $250 worth of ETH 2 grants on GitCoin (last day today!)

New stuff

  • Awesome money protocol visualizer called myDeFi (missed this last week)

  • Investing in Uniswap liquidity pools directly from Zerion is so 🔥

  • GodsUnchained game studio gets $15m (ppl i respect say this game mainstream)

  • Uniswap liquidity pool analyzer (more improvements coming Tuesday per Caleb)

  • Maker is going to re-release their beloved OasisDex soon

What’s hot

  • WBTC borrowing up to 7.36% (was on list at 3%—someone reading Bankless?

  • 60 DAI volatility at an all time low (that means it’s been stable at $1)

  • Connext means bankless payments and the world is asleep on its potential

Money reads

  • BTC and ETH will eat privacy chains (I mostly agree w/ this) - Ryan Gentry

  • A DAO credit union (missing pieces—but in 5 years I can see it) - Jacob Shiach

  • Learn why the Fed is pumping funds into the overnight rate - Epsilon Theory

  • Are trusted assets in multi-collateral DAI a good idea? - Hugh Karp

  • DeFi Aggregators (I partially agree) - Ash Egan

  • BTC price dropped last week but no change in fundamentals - Hans HODL

  • Amazon dropped 95% then become $1 trillion, like crypto? - Ted Seides


Last day to earn $40 by subscribing—you can get paid $40 for subscribing to Bankless & funding a BlockFi account—1. Subscribe to Bankless 2. Get access to Deal Sheet 3. Use BlockFi deal & get $50—net earnings—$40. Last day! 🔥

Get Paid to Subscribe


WHAT I’M DOING

Check out a few opportunities I’m capturing right now with my crypto money

Explored a DeFi credit card. Yes, I’m on a hunt to find the best crypto credit card. I’ve signed up for BlockCard, am taking a look a Nexo, Monolith, and Crypto.com. I’m finding each of them have quirks—for instance—BlockCard looks cool, but why on earth do they inject a token call Tern into their product? I hope to get back to you with some answers.


COOLEST THING YOU DID LAST WEEK?

Bankless subscribers are leveling up like crazy—here are cool things you did last week

  1. Lend DAI, borrowed ETH, used Uniswap, bought Set - @slengas 🔥

  2. Lent DAI on Compound using an Aragon DAO - @lightcoin 🔥

  3. Helped 1k Venezuelans buy ETH using bolivars - @LocalEthereum 🔥

  4. Lent DAI on Compound and signed up for Bankless - @funnydesigner

  5. Contributed to gitcoin grant that matched 50x - @owocki

  6. Used OpenSea to bid on ENS short names - @R_Tyler_Smith

  7. Got paid in USDC and ETH - @lastmjs

  8. Explored Zerion, Multis, and InstaDapp - @neerajT4

  9. Running an ETH node on Avado hardware - @westcoatswalka

  10. Bought the Dip - @chainlinkgod

I love this community of doers!


WEEKLY ASSIGNMENT:

Make time to complete this assignment before next week

Go to a virtual DeFi Conference. (2-4 hours) You don’t have to travel anywhere or buy a ticket to go to a crypto conference. You can construct your own virtual conference and learn on your own schedule. I do this all of the time—it’s been pivotal in my path to leveling up. This week I want you to attend the DeFi Summit Conference virtually.

Here’s what you do:

  1. Look at the 50+ DeFi Summit videos that were just released

  2. Make playlist of 3-5 videos of interest (my recommendations below)

  3. Schedule 2-4 hours to watch videos (try 1.5x playback speed)

If you have followup questions—find the presenters on twitter and ping them.

DeFi Summit Videos I recommend
  • VIDEO: Keynote on Exponential Finance (can’t miss)

  • VIDEO: ConsenSys loan protocol risk scoring (i’ve written about this)

  • VIDEO: UMA Token Builder (connect some dots before watching)

  • VIDEO: Composability (fancy word for money legos)

  • VIDEO: Argent smart wallet (never miss a talk by these guys)

  • VIDEO: MakerDAO on DeFi regulation

Create an action list of things to try based on the videos.

That’s it! Doing this levels you up almost as much as going to the conference itself. 🔥


Extra Credit Learning

  • (Beginner) VIDEO: 5 Ways to Get Dai for Beginners by Chris Blec

  • (Beginner) VIDEO: Zero to DeFi on Argent in less than 90 seconds

  • (Intermediate) AMA on ENS names in Ethereum

  • (Intermediate) VIDEO: Whiteboard explanation of Set Protocol

  • (Advanced) Understanding Ethereum gas markets


MAIN TAKES:

Read my takes but draw your own conclusions

  • I’m convinced governments will try to kill cash in the decades to come and that means all currency transactions can be censored—we need crypto

  • Will makes the point that on-chain order books can’t possibly scale for the trading demands in a fully tokenized world—I’m glad multiple projects are working on different approaches

  • As millions in Maker loans were liquidated this week due to falling ETH prices DeFi Saver saved 20 loans but missed 2—obviously a problem but DeFi Saver has responded well and still seems loved by the community—$1.35m in loans managed today

  • Reminder: use DeFi products at your own risk especially newer, less tested ones—case in point: a bug in the trading aggregator 1Inch caused someone to lose $24k last wk (he’s gotten half back and the other half has been promised to him)

  • NBA player tokenizes his contract then the NBA says he can’t, then he responds that he can—remember: permissioned assets still remain…permissioned

  • Binance is launching a staking service and all exchanges will provide similar—but there’s a big difference between staking money and staking work tokens—the Binance listings are just work tokens

MINI TAKES:

  • Maker releases its primer on upgrading to multi-collateral DAI. There’ll be some friction in the upgrade, but it’s less bad than I was worried it might be. For instance, if you have a CDP you can seamlessly migrate it to the new system, you do not need to pay it off before migrating. Also, the migration window will be generous, 6 months or so. We’ll still need to deal with different DAIs and different rates on lending protocols in the short term though!

  • Also Rune from Maker is considering a ETH-only DAI which is cool. The coolest part, this idea came from Bankless members! Davoice321 started an initial thread here which sparked an idea from Rob Mose which became the basis for Rune’s comment—which all originated from their conversations in the Inner Circle. I’m beaming with pride right now.

  • As trade wars between China and U.S. ratchet up there’s talk of blocking Chinese companies from listing on U.S. exchanges. This is exactly why the internet of assets will be built on an open, neutral platform that can’t be controlled by state actors—a platform like Ethereum.


TWEET-A-QUESTION

Tweet me your question—I reply to one per week

I tweeted a question from the Inner Circle this week:

Twitter avatar for @RyanSAdams
Ryan Sean Adams @RyanSAdams
What's your best advice for someone getting started in crypto?
7:38 PM ∙ Sep 26, 2019
70Likes7Retweets

My answer:

Twitter avatar for @RyanSAdams
Ryan Sean Adams @RyanSAdams
New to crypto? Buy ETH/BTC and nothing else until you spend the next 6 months figuring out why they were worth buying
1:00 AM ∙ Sep 26, 2019
129Likes16Retweets


My top dozen favorite answers from you:

  1. Buy now. Be Patient. Never Sell.

  2. Get a job that pays salary and dollar-cost average every two weeks

  3. Do not invest more than your willing to lose

  4. Read, read, read, but also give things a try and start small

  5. You’re early ... be patient

  6. Think in terms of years, measure action by quarters (and more)

  7. Learn to think for yourself

  8. Avoid Maximalism

  9. Learn about monetary theory

  10. Learn how to operate

  11. Learn why the developer network effect is the #1 thing

  12. 45% BTC and 30% ETH and 15% stablecoins

I can boil it down to three words for you: buy, try, & abide.

- RSA

P.S. You also might like my 1 & 32 plan for beginners…

Twitter avatar for @RyanSAdams
Ryan Sean Adams @RyanSAdams
1 & 32 If you're starting in crypto acquiring 1 BTC & 32 ETH is a good goal 1 BTC to be one of only 21m ppl max that can own a full BTC 32 ETH so you can run your own Ethereum staking node for rewards Sometimes a good psychological schelling point is the best ways to invest
2:12 PM ∙ Jun 29, 2019
275Likes55Retweets

Some recent tweets…

Twitter avatar for @RyanSAdams
Ryan Sean Adams @RyanSAdams
Anytime you hear the term “Accredited Investors” replace it with “rich people” It means the same thing
1:24 AM ∙ Sep 30, 2019
106Likes16Retweets
Twitter avatar for @RyanSAdams
Ryan Sean Adams @RyanSAdams
The success of BTC means there’s no longer a way to launch a money by proof-of-work The success of ETH means there’s no longer a way to launch a money by initial coin offering Competing with BTC or ETH as money requires a new path to conception The old paths are sullied
1:48 PM ∙ Sep 28, 2019
83Likes11Retweets
Twitter avatar for @RyanSAdams
Ryan Sean Adams @RyanSAdams
Days like this are why you don't buy crypto on margin Build crypto wealth slowly 1. Buy ETH and BTC 2. Dollar-cost avg paychecks 3. Don't use margin 4. Don't trade 5. Stick to the plan This strategy works best for 98% of the population
8:14 PM ∙ Sep 24, 2019
252Likes39Retweets
Twitter avatar for @RyanSAdams
Ryan Sean Adams @RyanSAdams
Connext is Lightning for Ethereum Will be integrated in every wallet Uncensorable, non-custodial, stable, non-sovereign money w/ instant transactions on every single Ethereum wallet Bankless payments 🔥🔥🔥 The world is asleep on this Not for long medium.com/connext/connex…
medium.comConnext v2.0 is on MainnetHere’s why we built it
8:29 PM ∙ Sep 23, 2019
212Likes55Retweets

Actions

  • Execute any good market opportunities you saw

  • Complete the weekly assignment: attend DeFi conference virtually


Level up—no interruption. $12 per mo. 20% off includes Inner Circle & Deal Sheet.

Get 20% off forever


Let’s onboard 1 billion people to open finance…

If you believe in what we’re doing don’t keep it to yourself—share Bankless with as many people as possible.

Post. Tweet. Tell. That’s how we take back our money system.

Need the words? Bruno may have said it best….Bankless is not your daily brainfart

Twitter avatar for @bitfalls
Bruno Skvorc @bitfalls
Subbed to @RyanSAdams' Bankless at bankless.substack.com It really is a good newsletter with a surprising level of quality and thought put into it. It's really not your typical "here's my daily brainfart, pay for it" people try to pull off with Substack. Up your #defi game 💸
bankless.substack.comBanklessThe ultimate guide to crypto finance
8:37 PM ∙ Sep 6, 2019
13Likes5Retweets

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.


Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. I’ll always disclose when this is the case.

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The 3.5% Rule (Market Monday)

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