This is a quarterly update on the Crypto Macro series. The last post was from June 2022 and can be found here.
I have added a Definitions page which will include all of the terms and abbreviations that I use from now on and will be referred to on every post.
Substack has launched an iOS app for those of you using apple devices. I am an android peasant and can’t tell you if its good or not yet, but I will know soon. Substack has announced a waitlist for their android app, which they claim is nearly ready. I’ve signed up for the waitlist and the link is here in case you wish to do so.
Table of Contents
Trends and Developments (Aptos, lol)
Interoperability Update
ATOM (Cosmos)
DOT (Polkadot)
ICX (Icon)
LINK (Chainlink)
Regulatory Update
Conclusion
1. Trends and Developments (Aptos, lol)
As usual we’ll start this off by talking about the major trends and developments that have emerged since the last macro update.
The biggest change that occurred was the Eth 2.0 update. We’ve had 2 posts dedicated to the Merge, and several sections of the prior weekly posts covering the merge as well. Part 1 and Part 2 are both linked here. Looking back at those posts today and they still stand well in terms of forward looking market predictions as well as the basic facts regarding changes to tokenomics and how other market competitors will have to react during the next bull market. Most EVM chains competing with ETH that do not carve out their own unique market niche will likely die. Their purpose no longer exists. While other chains like Polygon ($MATIC) and possibly Avalanche ($AVAX) will likely continue to thrive during the next bull market as they establish themselves as homes for blockchain games.
Before you look through this thread, please consider that his assessment of game-fi and markets is backwards looking. There is an undercurrent in the crypto space regarding money. The more you are motivated by money in small side projects and alt-chains, the worse they will likely do. If you are primarily in it for the money, then just follow the macro with DCA’s into bitcoin and ETH during the bear cycle, and rotations into alt’s at the top of each bull cycle. If you join side-projects for money, they will disappoint you. Don’t pursue a game-fi investment unless you like to play games. Then simply invest in the ones you have the most fun playing. If you’re having fun and new people can join and have fun too, then do your thing. The money in BTC and ETH will handle itself in time. I don’t share examples and trends with the intention of pulling you around by the nose and having you stare at a new thing every 15 seconds. I instead do this to show you potential rabbit holes you can go down if something matches your passions and interests. No matter how lucrative it may seem, if it doesn’t fit your interests, don’t bother with it.
Maybe Game-fi turns into a big industry, or maybe it fizzles out. But if you can at least have fun with it, you won’t feel like your time was in vain if it amounts to nothing.
A lot of investment trends driving crypto are coming from a pursuit of quick money at the moment, and it is ironically what is hindering many portions of crypto from generating massive returns. The formula for good crypto is simple. Fair access, low inflation, and a long token release timeline. Bitcoin had to be out for 6 years before it started generating what would be considered lifechanging returns for early investors. And whoever Satoshi Nakomoto is, never made a dime from his wallet. There were no pre-seed investors, no VC partners, nobody who needed exit liquidity to buy their bags so they could post a profit.
Enter Aptos
Aptos is endemic of everything that’s wrong with the crypto space at the moment. I can already tell you that this project will not last. Too many VC’s in crypto are just trying to pump out 1-2 new projects a year, new L1’s, or new scammy high APY projects with little to no actual sources of profit. I rarely ever see projects with a 100 year vision to build or be something new in the space. Aptos investors get a fairly clear picture here of when the VC’s will start looking for exit liquidity. By April 2024, if you own Aptos, you should be looking for the door. One could even argue the same for October 2023 as well, in order to front run the obvious VC selling.
Consider that when Aptos was listed on several centralized exchanges right when the airdrops went live, the tokenomics weren’t even public. All we had was an accidental leak in Korean from the Upbit Exchange.
It’s very clear that the centralized exchanges listed this token purely due to VC hype (or because they had invested in it themselves) and not due to any due diligence they performed on the network, as the token was listed on the exchanges on the day of the main-net launch. Personally I can’t really assess the token yet. There is a chance it might make you some money depending on how many dApps they have launching on the chain in the first few weeks. These dApps will likely all be centralized, and as you’ll recall the Aptos airdrop required KYC, so I didn’t participate but I did let you know how to do so if you wanted. If you did participate, and you didn’t sell the airdrop within the first second, I would actually recommend sitting on it, maybe participating in the DeFi on chain, growing your bag, etc. and exiting in September or October 2023 before the VC unlocks begin.
Too many of the participants in Aptos are mainly aligned around turning a profit, and not aligned around making a good product that can withstand the test of time and outlive it’s creators.
The death of architecture began with the creation of an excel spreadsheet. Aesthetics could never be captured and quantified, but we tried to anyways. You can see it if you look really close.
No one building a cathedral ever stopped to think that they could fit double the parishioners per mass if they got rid of the vaulted ceiling and instead created multiple levels of seating. They knew to do so would be ugly and profane, and defeated the purpose of the Cathedral. It wasn’t to maximize tithing (donations), it was to maximize your sense of awe, wonder, and the religious sense of the divine.
Give a man a spreadsheet with the goal of maximizing square footage while still trying to convey something and you get the monstrosities of brutalism. There is nothing more profane than this. You can tell just what was being worshipped here by the shape of the building. An inverted pyramid. A panopticon with every eye pointed down at you. Such a building attempts to loom over you and make you feel small and insignificant, pay your taxes. It says nothing good about you as you walk into it’s belly to be digested, once inside it spares no warmth for those within. Low ceilings, little natural light and a maze of cubicles mimicking the intestines and interior offices with no windows. The employees are just as much prisoners as the citizens forced to come in. You can forget yourself, your purpose, your life, and your very being inside of such a beast. You could work here for 20 years and only realize the time had passed and been wasted once you leave. This place was haunted the moment they cut the ribbon on it. I have no doubt that the dead will soon walk it’s halls if they don’t already.
You can tell a lot about a person by the things they build.
Bitcoin is the cathedral of crypto. The last bitcoin will be mined in the year 2140. It is a multi-generational project whose aesthetics can’t be quantified or compared. When it comes to the heights of beauty that western society has created in architecture, few things stand above a proper Cathedral, or Basilica. Most of those workers who spent time building those cathedrals never got to see them complete in their final forms. The product superseded the people making it. There is no greater act of faith than to contribute to something that will certainly not complete until after your death. It is no coincidence that the longest construction projects by far are all Cathedrals, Basilica’s, and Temples, with a handful of exceptions. Yet, there is a certain kind of man who is incapable of working towards such projects, nor recognizing their value until it is too late and his vital years have passed him by.
There is a parable that is awfully fitting here. It’s about 3 bricklayers. One day the architect of the project approached and asked the three what they were doing. The first said; “I’m laying bricks to feed my family.” The second said; “I’m laying bricks to build a wall.” And the third said “I’m a cathedral builder. I’m building a great cathedral to The Almighty.” The parable is about vision and how the third bricklayer was promoted, blah blah blah. Wrong. The parable is not about rewards, promotions, the benefits of vision, nor anything else. It’s about not wasting time. The people building aptos are just trying to feed their families, nothing more. They are wasting time in that they could just as much have started a company selling dirt to Arabs building islands in the sea. What they are doing is meaningless and will only last for as long as they desire to feed their families. It is purposeless work. They are advancing nothing in this space. Not only are they merely laying bricks, but the project has likely been spreadsheeted (yes, it’s a new word) to oblivion. Any aesthetics that may have been part of it’s original design have been watered down to a Brutalist imitation of crypto. What problem is it solving? To be more secure from hacks and exploits? Lol. Lmao. Like everything it is only a matter of time for those with nefarious ends to figure out how to exploit the fallible humans behind the code. When Aptos suffers it’s first, second, third, and fourth exploit, what will they be telling us their purpose is? I imagine their purpose is KYCed access to DeFi, as that is the only way to guarantee what they want other than spending a lot of time and processing power to identify patterns in exploits and letting code run for decades while human behavior is watched and code optimized. Rather than building that cathedral, they choose instead to build the Boston City Hall. I could not imagine a greater waste of a life than to do that.
The hard way is the only way that works, and the only way that lasts. But these VC’s are not in it to build something lasting. They are just trying to lay a few bricks and feed their families. So you can already tell where this project will go. If you want to know how to identify a good project? You look at their investors and the track record they have. The only cathedrals these VC’s are building is their reputation for dumping and searching out exit liquidity. This is their true legacy.
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