Posted on

As the world burns

Thoughts on Weimar, meme coins and the end of bullshit jobs

So ETH broke $4200 as the world has lost its mind over meme coins. SHIB is some multi-billion dollar token now, and new competitors are springing up left and right. Gas on ETH is the lowest I’ve seen in days, 180 gwei as I write this, but I still have yet to make any moves on mainnet in roughly a week. It’s just too expensive. My OpenSea listings remain untouched, and likely won’t fill since it’s just too damn expensive to do anything.

I think we go up from here. Sell pressure on ETH is likely to be non-existent for some time, given all of the staking options that are happening. Bankless has gone into this whole ultra-sound money thesis a bunch so I’ll not repeat it here, but Cochran’s tweet below is likely correct. NGU technology indeed. And I love that he lumps his investments into EVM-compatible and Solana. Confirmation bias indeed.

My thesis for this cycle has been that ETH would outperform BTC. When ETH hit $2000 I put a good amount of my retirement portfolio ETH into the ETH 2x FLI token, at $123. Today it’s at $420, and I’m sitting pretty. I’ll likely hold this position until ETH breaks this line, then I’ll consider scaling it back a bit.

Messari’s Ryan Selkis made a comment a while back that we’re likely to see a lot of “idiots” making more money than us this cycle, and he cautioned that it was OK and not to follow the FOMO. There’s plenty of money to be made this cycle, one just needs to keep their cool, follow their plan, and execute. There’s just so many people flowing into crypto this time round, there’s no telling how crazy things can get from here.

One thing that does have me concerned is the broader casino quality that’s going on now. I don’t know how much of the broader population is entering the space right now, but I think we might be in for trouble long term if we start minting millionaires left and right. I don’t know how many low-wage workers are winning the lotto with Doge and SHIB and all these other meme coins, but I hate to see the fallback once this bubble busts. I remember the feeling of anxiety and excitement that I felt during the 2017 run as I watched my four figures become size, but I also remember the anxiety and doubt that occured as the market corrected eighty percent over following six months.

There’s been a bit of fear-mongering among some conservative and libertarian media about people making more money on unemployment benefits and stimulus than they would make working at most jobs, and we know we’ve been facing a skilled labor shortage here in the US for some time. A good number of my clients over the years have been struggling to find skilled labor. HVAC techs are just one example I can think of. Now I’m seeing reports on social media of fast food restaurants closing down with signs taped to the intercoms that “no one wants to work here” or “people don’t show up for the jobs they signed up for”.

And I can attest that certain types of tech roles are hard to fill these days. Take mine for example. I’m basically forfeiting my position to work for daos or protocols or yield farming or whatever the hell I’m going to call it. Is this the future of work? Is the rise of SHIB and meme tokens going to spawn an exodus from productive labor? in the past I’ve pushed back against the idea that stimulus and UBI would lead to the mass exodus of labor from the market, at least a detrimental one. Sure a lot of bullshit jobs are going to be really hard to fill moving forward. No one wants to work for a minimum wage job when it takes three or four hours of labor to feed a family of four from the same restaurant.

After reading When Money Dies I’ve got a few doubts. So much of what that book describes in 1920’s Germany seemed oddly familiar to me when I was reading it, and each day that goes by seems to be like deja vu. The rush to speculative assets for example, the realization that it’s not the assets themselves that are going up in value, but that our money itself is losing value. In this case it’s not just the dollar, but all fiat currencies that are losing value against Bitcoin and other cryptoassets. We’ve already seen asset inflation in stocks and the housing market; used cars experienced a bubble last summer as stocks of new cars fell off due to factory closures; the price of lumber is still exorbitantly high due to home-improvement and new construction demand. Now, as the economy returns post-COVID, we’re seeing the beginnings of a bubble in energy stocks as demand meets a year of underproduction. Not to mention the shutdown of the Colonial Pipeline due to a ransomware attack that has led to gas station shortages.

We are in the beginning of the euphoria phase of this bull cycle, I would say. One recurring theme from When Money Dies stands out to me, it was that through the multi-year collapse of the mark in Weimar, things kept getting worse in an unending catastrophe, again and again and again. Crypto, with its charts and cycles, might be giving us a better view of exactly what’s going on. As the market cap of these coins go parabolic, we can always wonder when the pullback will begin, when the correction will come.

What if it doesn’t?

Posted on

Tomorrow is another day

I’m starting to feel a bit of ennui lately. It’s starting with a hesitancy to sit down and write these posts in the morning. I feel like I’m running out of things to say and am just repeating myself day after day. So I’m waiting until later in the day to figure out what to write about. That’s causing me a bit of anxiety as the unfinished post is hanging over my head.

I think part of the problem is I made a commitment to the founder of a protocol to work on some docs for them, and I procrastinated on it and seemed to have burned that relationship. I haven’t followed up, or followed through, so it’s just taking up mental space in my head and likely will until it’s resolved. I suppose the proper thing to do is just do the work and try to salvage the relationship. I don’t want to be someone with a reputation for not following through. It also means that I’ve got to really focus on where I divert my attention.

I have this vision of my head of life after I quit my day job, that I’m going to be able to hunker down for two or three hours at a stretch and really dig into some project work. I think the reality in the near term is mostly going to be the same as it is now, househusband. Having Zombie, LLC is mostly a distraction right now, and having that off my plate is going to cut down on the interruptions, but as long as the kids are around, I’m subject to constant interruptions. Hashtag dad life. The only time I can get work done is if they’re out of the house or watching TV. The rest of the time it seems like they’re either making a mess, fighting, or trying to sneak into the pantry to sneak some snacks or treats. It’s like I’m on high alert all the damn time.

It’s actually pretty easy for me to knock out two hundred words on this blogmost days, it’s just sitting down that’s the hardest part. Most days I can easily knock out eight-hundred to a thousand words, no problem, so I have a issue just leaving after a couple hundred. I can usually find something to talk about. It’s just the fact that if I don’t wake up at six AM and knock out this page before anyone else wakes up, I will be interrupted two dozen times before I can finish the page.

And now it’s ten till nine, which means I have to stop and call in to check-in with Zombie…. brb.

SAIA Dao just started week three. I added up all of the dao funds, and along with the Gnosis vault and Solana wallet, we just passed twenty thousand dollars in funding! Today we start accepting $10,000 and under tributes. We’ve got enough funds to make it to tier three, but we’ll need another $110k from here in the next four weeks if we’re going to make it to T4. It’s going to be interesting. I’m spending a lot of time managing the proposals and doing technical support for people with their wallets. Now, we’re mostly going into a marketing and promotion phase; I’ve got a podcast that I’ve been promising to do.

I’ve been making good progress with Rust, moving through a section or two a day. I’m not sure if I’ll be ready for the hackathon or not at this pace, since I’m time-limited, but I’m trying to get people thinking of ideas for the Star Atlas Arcade. Converting MolochDAO would be my fallback position. I’ve got a whole bunch of random stuff that I want to figure out as soon as I can start diving into the Solana: yield harvesting/restaking my farm positions; multi-sig wallets, token holder analytics (for SA posters, of course), and maybe a couple other things.

And I’ve been a bit of a mess because of my dad’s surgery. He’s supposed to be dismissed from the hospital some time today or tomorrow and we don’t know what to do with him. He can’t go home by himself, and we’re just not prepared for him hear. I’m bringing him to a nursing home for a few days, but it’s just too damn expensive for him to stay there very long. And the kids have been really bad lately, I’ve been short-tempered and today was just a mess.

Posted on

Exit or Escape?

ETH broke $4000 early this morning, and with gas at 250-300 gwei, it has become painfully apparent how difficult it is going to be to continue to operate on Mainnet for the coming months. Yesterday a simple ERC20 transfer was about $180 in gas, and I’m pretty much putting a hold on all ETH activities unless I carefully consider exactly what I’m doing.

Everything under $400 in value is effectively dust for now. We may see some relief briefly once Optimism launches, but I think long term, if ETH is going to $5000-10,000, it’s going to price most participants out of the market. I’m almost there myself. I’m trying to triage my positions into several buckets.

  • Dust: shitcoins I bought as a crapshoot, that have no real value to justify swapping them back to ETH. I’m not sure what I can do to deal with the tax ramifications of this. I can’t merely mark them “abandoned” unless I burn them or the private keys for the wallet. The latter is unacceptable for a variety of reasons, I’m not sure what else can be done about this loss. It will need further research.
  • AMM only coins: Coins that are worth a couple hundred bucks, but don’t have any liquidity off-chain. I’ve got a couple things I can do here. One, if I believe in the project I can just hold on, which is the most risky option, or I can swap close the trade and take ETH/stablecoin profits. Alternatively, I could bridge them to a sidechain, Polygon, BSC, or Polygon. This might not be as expensive as an AMM trade, but it also depends on liquidity as well.
  • Majors: Most of the blue chips have plenty of options for trading, so it might make most sense to move these coins to Kraken or one of the other centralized exchanges. L2s are also an option, but migration is a bit more expensive than just an ERC20 transfer. It all depends on how comfortable I am with custodial risk. There are a couple ways to reduce cross-chain transfers fees. FTX has free transfers to Solana, and Binance can do the same for BEP20 tokens. It seems kind of ironic to set up to sell ETH on Solana, but no more so than doing wBTC on Ethereum.

Then there’s the whole what to do with my yield farms. Obviously, harvesting is going to slow down a lot, and there’s a lot of yields that aren’t going to be worth the gas to claim. I’m going to be thinking very hard about what I do in the coming months. And moving into new positions… well, that’s going to be a very hard decision to make.

I think there’s probably one project that I’m even remotely considering getting into. OlympusDAO seems almost too good to be true, like Alchemix, so I’m going to wait for an opportunity for gas to come down and then throw some funds into it.

Basically I’m looking for things that I’ll be comfortable staying in for the next three months. Or longer. I don’t know how the Ethereum community is going to deal with the prospect of five-figure ETH, and what that might mean for the network. If it’s going to continue to be the type of network that can run a node on a laptop, then they’re not going to be able to increase the blocksize too much bigger than they have now. Still, I’m not able to make a prediction as to what the long term effects on gas is going to be. Optimism and the upcoming EIP may reduce short-term gas issues, but if ETH continues to climb, then Ethereum will continue to price people out of the market, forcing participants onto side chains.

Posted on

Mother Day

Today is Mothers’ Day, and ETH is almost $3900. All I can think about is flipping Star Atlas posters and Solana. This will be a short post, as I want to get a workout in before the girls start waking up. Missus has said on occasion that all she wants is to sleep in and a clean house, so that’s all I’m giving her. I was totally preoccupied with my dad’s surgery and hospital stuff that I forgot to by my Mom a gift, but Missus did it for me. So I really need to make things special for her.

ETH’s progress from the $2000 level has been rather short of amazing. My mining rig continues to crank out gwei for my never ending degen activities, but we’re reaching a critical point. I need to dump the GPUs as I’m sure they’ll be fairly useless soon, from a mining perspective. I’ve already decided that they’re too much trouble to keep up with the occasional failure, as I’d rather concentrate on other activities. Last week’s low gas let me ignore the issue, but yesterday’s recent spike to 300 while I was scrambling to buy my allotment of Star Atlas posters reminded me just how expensive things are going to be in the future. I wanted to transfer USDC to my FTX account and it was … $150?!

https://twitter.com/onemanatatime/status/1391069080967290880

There is a lot of trash in my wallet, some degen coins that I bought for 0.05 ETH earlier in the year. They’re all effectively dust. Swap fees effectively means that anything less than $100 is dust, and that number is going to get progressively higher over the next two months. I’m not sure that the launch of Optimism is going to change that, long term. I’m going to start looking through my wallet, and anything that I can trade on a CEX is going there for transfer. I’ve got to dump things will I still can, and tighten up my wallets so that I’m in positions I don’t mind holding for months.

I probably need to up my game with the NFT sales, I need to flip a lot of week one and two posters so I can afford to buy more of this week’s. I figure that I should probably hold enough funds in reserve to secure the next tier, so that limits what I can buy today. I’ve got a lot of posters to flip. I basically need to dump my entire inventory this week to be able to buy enough week three posters to keep things moving. It’s going to be a bit more tricky than I thought, but a fun exercise. I have no fears about losing money, I’m just concerned that I’m not going to be able to flip things fast enough to make it to tier three, which is going to cost 3x my initial starting capital. The clock is ticking!

I’ve been contacted by someone about the Solana projects that I pitched for the hackathon. I’m not sure exactly what I can do. The Lattice hard wallet support is probably out until after the hackathon, and the Gnosis vault probably requires some serious integration work with existing wallets that might be too much to take on right now. Forking MolochDao/DaoHaus might be a good project, but with the StarAtlas arcade rewards, I’ve been thinking that’s where I’m going to be focusing.

I’ve had a couple ideas for games, mainly in-browser versions of retro arcade classics, stuff that we could fork and modify with some blockchain mechanics and throw on a web page. Nothing terribly original yet, I’m afraid. I still need to build a team, and I’ve got a week to do it.

Posted on

Business plan hack plan

Today has been a bit of a mess. I just finished putting the first application of putty over the hole I made in the bathroom wall months ago when I got mad at Elder. The girls are down the street at a birthday party, and I’ve been messing around with Solana trying to get the week’s Star Atlas poster on Serum and losing my mind.

Solana transactions are nothing like Ethereum’s EVM transactions. I’m at the point now where I can follow the transfers of tokens going in, out and every which way, but Solana is just a completely foreign beast. Seriously, what in the hell is this?

I must have tried five transactions on the Serum DEX before I figured out that I needed to pay for the posters at a higher price as there was an exchange fee in the transaction that wasn’t displayed on the site. Oh well.

I just sold another week one poster on OpenSea, bringing my total to five sold. I’ve managed to sell all of them for at least double the starting price, but I’m going to run out of capital in a week if I can’t move more of them. I’ve already got fifteen of week two, which ends sales any minute, and Ill be able to afford nine of next week’s posters with the starting capital and proceeds that I’ve got now. My business plan is below.

I’ve figured out that I can list on OpenSea without any gas, and allow others to scoop them up from me, covering the cost. Changing the price or cancelling is going to cost me, and then there’s the whole situation with moving them over to Solana when I’m done. I figured that the posters would be works of art in their own right, and non-gamers would be willing to pick them up on Ethereum at a premium, and it’s mostly been borne out. There is a pretty big price discrepancy between the networks, as gas is a huge consideration. So to that end, I bought five of this week’s poster on Solana. I’m not sure how I’m going to split things moving forward, so we’ll just have to see how the price moves.

I got my Ledger wallet yesterday, and moved my IRA funds to it. God, I hate it. Compared to the Trezor or Lattice it is obviously inferior device. Inputting the pin is a pain, and I couldn’t even get it to work on my Ubuntu workstation yesterday. It may have been operator error, but the Trezor’s ability to enter the pin via the keyboard’s number pad is so much better.

I actually started looking at what it would take to bring Solana support to the Lattice. They’re going to be opening up the device’s SDK a bit, so I may try to dig in with that. I signed up for the Solana hackathon, thinking that it might make a good project, but the hackathon starts in a week and ends on June 7th. I had thought it started on June 7, and the device won’t be ready for me. As alternatives, I considered joining up with someone to try to port the MolochDao or Gnosis Vault contracts, but then I saw this Tweet.

So, yea, I know what I’ll be working on during the hackathon! Now to come up with some arcade game ideas.

Posted on

Exit interview

I had a call with my boss.

We were supposed to have lunch/brunch this last week, but in a perfect example of the type of disfunction that our working relationship has become, we were unable to get our schedules lined up. Friday, my mom came to town, and I had an interview with a VC in the afternoon, and the only time that would have been doable for us was undone by bad traffic. Sunday, we were unable to meet up as well, but for different reasons.

So he called me yesterday and we talked for half an hour. Eight and a half years working together. Elder was only three months old when I started working with him, freshly fired from my last MSP job, and desperately needed something to put food on the table with. He had just retired from the Air Force and wanted to try his hand as business. It was either a 7-11 or this, he had told me years ago.

He told me that he was faced with rebuilding the team from scratch. I was his first hire, and with me leaving was just the capstone on several losses over the past few years that had seemingly defeated him. Or phone technician, never reliable to begin with, had seemingly disappeared, and the only other person on our team, an office manager who had been with us for several months, was moving out of the area shortly after my departure.

We had had no discussions about my possible replacement, and with less than a month to go, I had grown curious as to what his plan was. There essentially wasn’t one, just defeat. The prospect of rebuilding his team, at this stage in the game, was a non starter for him. The only problem was his contractual obligation to the franchise home office, to which he was still bound to for eighteen months, or some two hundred thousand dollars. He was seeking a buyout or merger with another franchise, or group.

I told him that he shouldn’t consider this experience a failure. To have made it eight years was a considerable achievement. I tried to take responsibility for my part in the failure, I just wasn’t the right person to lead a team at the time, basically, and we had missed our window of opportunity several years before, causing some self-owns that had interrupted our trajectory and crippled us mortally. We had just been bleeding out since then. We had a moment, trying to recall all of the people who had worked with us over the years.

There were of course external reasons at work as well. Our area is heavily saturated with competition, and the market has become exceedingly commoditized over the years. Ultimately, I don’t think the system that the home office franchise provided was scalable for a small office. I became burned out several years ago, having to manage the intricacies of some half dozen vendors and systems: RMM, PSA, backups, AV, M365, more and more with varying degrees of interoperability and APIs. I’ve written ad nauseum about it here on this page in the past. It boiled down to something that was cumbersome and hard to replicate. I had come to the conclusion that the only way to survive was by conglomeration, but we were unable to make that work.

And I am done. I’ve given him two months already since I declared my retirement, and I have today and four more Fridays to go. He said he was going to try and merge with a group based out of St. Louis, to pool resources, and I agreed that it was his best option, but he needed to act quickly as I wasn’t looking forward to any awkward support calls to my cell phone in June.

Before we ended I thanked him for the opportunity, and told him that if he ever changed his mind about crypto and wanted to get in, that I would be more than happy to help him. I think I went on trying to explain what I had been doing the last few months with SAIADao. He mentioned that we had recently gotten on some military contractor list that would give us the opportunity to do some blockchain work. I couldn’t help myself and shot it down, which is probably another perfect distillation of our working relationship these past years. No, I told him, that’s going to be private blockchain work and there’s just no reason for me to focus on anything like that, it’s probably IBM, and blah blah blah I went on.

And that was that.

Posted on

Stick to the routine

The week has been flying by. Missus’s birthday was Tuesday, and I don’t think we’ve quite recovered yet. The entire house is a wreck, I do not think there is a single room in the house that is clean. I’m not sure who’s been doing the litter box. It’s all I can do to tear myself away from the computer to put dinner on the table. I managed to cut the grass last night, but there’s so many other things that need doing around here that are just getting ignored. I’m sure my dad’s surgery didn’t help either.

I’m slowly working my way through the Rustlings tutorials. I’m actually further along than I was when I first tried to do these on summer vacation last year, so that’s progress. I think number one on my project list right now is a yield farming autocompounder. I just went through my STEP-USDC pool on Raydium: claim rewards, swap half, all liquidity, stake. Rinse, repeat every day as long as the pool is active. I need to automate it.

I wish I had something to automate proposals on DaoHaus. I think I finally got people to help me out, it seemed like I was the only one doing anything. I’d like a custom front end to make tribute proposals easier to calculate, and something that can automatically process ones that need processing. I wish I had a lot of things.

There’s really just too much to work on, and I think I’m close to capacity. Work, i.e. Zombie, LLC, is taking a negligible amount of my time, but it’s one of those things that I have to address as soon as it comes up. Seventeen more days. I’m going to have to say ‘no’ to more things if I’m going to get anything done around here. There’s so much I need to do that I can’t keep up with.

So what’s my first priority around here? Running the house, I suppose. Keeping the kids fed, making sure that they’re cleaning up after themselves and not spending all day eating candy and watching TV. Making sure Younger is getting her lessons in during the afternoon.

Number two? Keeping the fires out for my Zombie clients. I’m avoiding starting any new projects, which seems to be easy as there aren’t really any. I’m not sure what my boss is going to do. I don’t think he’s found a tech to replace me, and I don’t know what he plans on doing after June 1. He sure as hell isn’t going to convince me to stay on. I’ll let him pay my LLC a $1000 retainer plus $150/hr if he needs to pick my brain, but I am so ready to put this behind me.

Everything else? Oh gee, let me make a list… don’t lose money, make money, get new windows for the house, fix our hot tub pump even though no one will service our brand, plan a trip out home, enroll Elder in Galileo XP this summer, sell my mining rig, learn Rust, Solana, and front end development; make enough money trading/farming to avoid dipping into the reFIREment fund. Is that enough for now? I don’t even know what’s on the Trello board for house stuff, let see: repair two holes in the walls and paint, stain the deck, clean up the no-mans-land in the backyard, put house numbers on the mailbox; numerous tiny items.

It’s overwhelming when I think about it, which is why I suppose it’s better to not think about it and just focus on the next big task. I say family is the most important, but it’s easy to get wrapped up in what I’m doing and only give the kids half my attention when they come interrupt me or I hear them bickering in the next room. All I can do is focus on what’s in front of me, today’s task, and try to make sure that I’m not taking on more responsibilities. It’s no use agonizing over the things I’m not getting done, even the ones that I said I’d do. My priorities shift so fast, it’s the same flightiness that I’ve always struggled with. Is it ADHD, or is it something different. Regardless, there’s always more to do, so I better get to it.

Posted on

Uniswap V3

Launch notes and other updates

I procrastinated writing this morning’s post as I didn’t know what I was going to do today, and it seems like it was a good idea because today was Uniswap V3 launch day. And it was a bit of a mess. The main problem came down to the same EIP-712 signature issue with Metamask and hardware wallets. You just couldn’t use the V2->V3 migrator, as it relied on a signature to approve the conversion. Opps. The entire Uniswap Discord was full of people with LP tokens on their hardware wallets that they couldn’t migrate! Myself included. I wound up moving my UNI/ETH LP over to my Metamask softwallet address and migrating it there. It’s not safe, so I’m moving it back to my hardware wallet right after I finish posting this.

I had some other tokens on my Lattice1, and ran into the same problem, even though they had just pushed out EIP-712 support a few days ago. There was a slight problem with the Metamask plugin that the team was able to patch, and I was able to confirm it right away. This means that the Lattice is currently the only hardware wallet on the market that supports this important signature scheme.

I’m a bit miffed by Uniswap’s lack of communication on this lack of hardware wallet support in their migration process. They must have known about it, but just decided not to mention it on their docs? Granted, it is the fault of Metamask and the hardware wallet providers that this hasn’t been fixed in the last several months, but Uniswap could have at least given people a heads up.

The migration is expensive, it cost me $150-160 for the two I did, and you have to know what you’re doing. You can’t just use the old zero-to-infinity LP provisioning that underlied Uni-V2, you actually have to look at a chart and figure out what sort of range you want to do. With my UNI/ETH LP, I opted for this range, which I figure should good for a while.

As long as the price stays in this range, I’ll be providing LP, if it moves out, I’ll have either 100% ETH or 100% UNI. This is a lot different from the impermanent loss that we’ve become used to. If the price drops to the bottom of my range, my position is all UNI. If it goes higher, it’s all ETH. This is a much different risk model that what we’re used to.

The other big thing here is the collect fees button. Before, fees were rolled up into the protocol directly into the LP, but now it’s a separate button that can be claimed separately. I’m not quite sure what the design decision was behind this, but it seems curious. I suppose one could just wait until they remove liquidity, hopefully the fees will roll out with it, but I can’t see myself using that feature too often. Not until when Optimism launches and it won’t cost me $40 to claim it.

This is an interesting system, and it’s going to be interesting to see how things play out in the coming weeks. Liquidity mining is going to be very interesting to watch, to see how teams who have been relying on V2 LP tokens deal with these new NTFs. It’s going to require a completely different paradigm for project launches. Staking contracts will have to be re-written completely. So far, it doesn’t look like anyone has tried to provide V3 liquidity for Klondike’s kBTC/wBTC pairs, but I wonder if it would be possible to provide concentrated liquidity on V3 that would essentially absorb all of the fees on V2. Perhaps. There does seem to be some arbitrage opportunities between the V2 and V3 pools now, but I’m not likely to have time to mess around much with that for now.

Other updates: The SAIA Dao continues to grow, we’re getting a constant stream of contributors, and it’s become a lot of work to keep pushing these proposals through. I’m trying to get people to help me a bit, as it’s taking a lot of time to flush these proposals through every day. I’ll probably just shift down the amount of time I check them, and just stick to sponsoring and enacting them.

I aped into the Step.Finance token on Raydium today, right before it dumped — of course. The APY is ridiculously high and I haven’t lost 2% yet so I’m going to hold and compound these rewards daily. It is quite ridiculous right now, even if it is only supposed to continue for a few weeks. Step basically wants to be the Zapper of Solana, and it could be very lucrative.

My Impermax IMX/ETH leverage is still sitting pretty. 1.8x or so, even though I need to check it right after this. I’m wondering what Uni V3 is going to do to the V2 fees. It may destroy their entire operating model. We’ll know more after we have some volume data. This may be a very dangerous position to hold right now, but I’m playing with airdrop money so I’m not really concerned. Might wind it down if gas costs come down. We’ll see.

Bankless has a DAO! I’m really looking forward to this, and am considering a small stake.

The World Computer launches on Friday. After several years, of development, Dfinity is going live. I have not been paying enough attention to this one over the years. I took a look over some docs earlier, but I don’t want to distract myself from the work I’m doing in Rust right now, but I’m going to listen to the launch event and maybe buy some tokens. They’re apparently only going to be on Coinbase Pro, which may limit my options. We’ll see.

Posted on

What else?

What a day. My father had open heart surgery yesterday, and I was his primary contact so I’ve been keeping the rest of the family appraised with updates. I went to see him this morning. He looked like he had been hit by a truck of course. It’s a bit surreal, actually. His sister passed away unexpectedly after New Years, so my grandmother and surviving aunt have been worried about him. They live eight hundred miles away, my brother is across the Atlantic, and his wife doesn’t drive, so I’m the responsible one. It’s nuts.

Also today was my wife’s birthday. I took the kids out shopping for decorations Sunday to buy a bunch of decorations, and I picked up a cake with the groceries today. Ordered her favorite pizza joint, and basically binged-watched all of WandaVision this afternoon. I also got her a Kindle Paperwhite and loaded it up with a couple hundred books from my pirate collection. That’ll keep her busy!

Work? What’s that?

I did have one phone call for a support ticket that I’d been putting off for a few days, called the vendor and had it resolved in an hour. More like ten minutes after I got through the call queue, but that’s billable time these days.

SAIA Dao is open to $1000 contributions now, and we had maybe five proposals including my own today. I’m also have been making a nice little profit flipping posters on OpenSea. Only four so far, but I’m still doubling my money, even considering gas fees.

I had another bout of insomnia last night, and decided to open another leveraged position on Impermax. The internet died right after I placed the order, so I had a little bit of anxiety trying to go back to sleep. I woke up and found that my liquidation prices were not anywhere near where I thought they should have been, so I had to scale the leverage back. I found out later there was a “graph error” that was causing problems, but I seem to be holding steady right now. I still haven’t committed any further funds other than a few DPI, but that’s mainly because gas costs were high earlier and lending rates came down a bit.

Usually when I get overwhelmed and can’t decide what to do, the best option is to do nothing. I’ve got a ton of LINK from the ICO that I don’t know what to do with… Bancor or Integral or a CEX, I’m not sure. Maybe at some point I’ll figure out how to stake it. But I’ve got wBTC and stables that I want to farm on Impermax, but not sure I trust it yet. I’ve got no idea what my BTC is doing in the new Badger Yearn vault cause the APY isn’t being displayed. I’ve got native BTC that I want to put to use on the RUNE DEX, but don’t have enough RUNE to do that. I just finished buying the last off my SOL allocation and put half of it to use in the Raydium RAY/SOL farm. What else?

God, what else? I’ll probably have a lot more to say in the morning.

Posted on

Uniswap LP collateralized leverage with Impermax

So I’ve been somewhat occupied with a new lending protocol for the last day or so. It’s called Impermax, and it allows one to use Uniswap liquidity tokens as collateral for a leveraged position. You can also supply one or two of the borrowed assets in each pool for a nice APY, with no risk of impermanent loss. I’m just testing it out after getting an airdrop, and it advertises as the first DeFi protocol that allows you to use LP tokens as collateral.

A few of the APYs available on Impermax (4/3/21)

I read the whitepaper last night, it was written last year, and has a lot of math detailing the liquidation system. The system seems pretty well put together. There’s a core system, that holds all of the user state, and upgradable proxy contracts for the rest of the implementation. This design also allows for third parties to interact with the core system as well, meaning that it could be put to use in third-party protocols at some point.

Each Uniswap LP token gets its own pool, so a liquidation in one pool does not affect the others. For each pool there are three smart contracts, the LP collateral contract, and one each for the components of that LP, borrow A and borrow B. Lenders can provide either of borrow A and B, or both, and borrowers deposit LP tokens, and leverage their position by borrowing both tokens and staking on Uniswap. Here’s what it looks like after I took my IMX airdrop and opened a 5x long last night.

You’ll noticed the liquidation prices, there are two, representing an upper and lower band. The reason for this is that if the ratio of token A to token B gets out of whack, then impermanent loss can make it difficult to repay the loan. Here’s a chart of the band a couple hours after I opened my position last night.

Now there still seems to be some problems with the system, especially with regard to the liquidations. I got liquidated on the above position, which clearly shouldn’t have happened. I was only playing with a small stack and lost a small portion of my LP collateral, so it wasn’t too bad. Generally speaking, you want a leverage position that you won’t have to actively manage. The USDT/USDC pool seems like an obvious play here.

Borrowing is expensive, and is supposed to be offset by farming emissions via the IMX token, but there appear to be some issues with whether this is actually working properly right now. Supplying assets seems very lucrative, and it’s taking every bit of self control I have right now to keep from staking every single stablecoin, ETH and wBTC token that I have into the pools right now. And since the asset in each pair is in a separate contract, you can provide both assets and earn yield without worrying about IL.

On the topic of security, the protocol has several audits available, but with TVL only at $20 million right now, I’m not sure that IMX has been battle tested enough to warrant anything more than a small position, but I’m definitely looking at allocating some C tranche funds from the BCM reFIREment fund. In all, I’m very excited about Impermax’s potential. It’s got some kinks and improvements that need to be made, but it’s appears to be very lucrative for anyone willing to ape into it. Managing a leveraged position can be costly, but yield farming seems like a no-brainer.