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Derisking II: Halfway there

The de-risking continues. Badger dropped just enough past the last major support lines last night that I felt compelled to pull a quarter of my funds out. I completely liquidated my Sushi LP, keeping the wBTC but converting the Badger to USDC via Binance. I spent a lot of gas. I haven’t even added it up: unstake bSLP, withdraw SLP (twice, as vfat mis-calculated the gas,) approve SLP on Sushiswap, withdraw liquidity, send Badger to Binance, trade Badger for tether, trade tether for USDC, withdraw USDC to wallet. My god, what a mess. Here’s hoping I can get the cost basis right on that one.

I’m not really sure what’s precipitating the selloff, maybe it’s people like me who are just profit-taking. There’s a lot of bBadger moving to Pancakeswap on BinanceChain, but that doesn’t require selling Badger, so I’m not sure what’s going on. I’m still keeping an eye on things. BTC is up today, which means that Badger is falling against BTC, but as long as it can hold in USD here I may hold on. If not, I’ll have to dump the remaining Badger LP. That belongs to commingled pool of funds that belongs to the “family business”, so I’d have to split the wBTC proceeds with them — USDC profits would be held for taxes and “management” fees.

I’m feeling pretty good about it even considering the heights from which it’s fallen, down about twenty percent overall, based on my eyeball figures, which mainly consists of a series of daily screenshots saved in a notebook. I’m now just over halfway to my retirement goal. I started going over the Curve vaults yesterday, trying to put some sort of risk matrix together based on the underlying tokens. I’m thinking some linear algebraic matrix to weigh each token might work, but I have no idea how I’d even lay something out like that in Excel. I’m probably overthinking it way to much as well.

I might as well just pick a Yearn vault and call it a day, but my brain is locked on the problem and won’t let go. The reporting end of it is probably what I’m going to be focusing on most. Once deployed, how to I monitor the funds that I have and the interest being generated? How do the web front ends for Curve and Badger work, and how can I build my own dashboards to track performance over time? Can I do something with TheGraph, or do I need to use web3 to write to a database or spreadsheet? Figuring out how to do that would be a valuable skill.

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De-risking

I’ve written about IDEX here on several occasions. Yesterday, I sold my entire stash.

It’s probably most telling that despite owning their tokens, I never once used the market. On-chain exchanges are gas heavy and slow, and IDEX never got anywhere near their goal of being a fully decentralized product. They had on-chain orderbook nodes, which I ran (at a loss) for about a year. They finally got rid of that a few months ago in favor of a lightweight staking node. The truth is though, despite having about ten times the minimum stake requirement, I never got more than a few dollars in ETH rewards. The tokens did accumulate, but despite everything going on in the markets I felt like my money was better put to use elsewhere. Time will tell.

So I’m currently sitting at a little over one third of my “retirement fund”. I’ve still got over two months left to get the other two thirds. It’s going to involve some hard decisions. The majority of my funds are locked up in Badger DAO, so I’ve got to figure out how I want to pull funds from there. It’s going to be a difficult decision, although I did wake up this morning ready to pull the trigger after this latest dump. I’m still up significantly, but don’t want to risk losing capital.

So it’s quite fortuitous that I ran across this Badger Improvement Proposal on putting the USDC treasury to use. Basically, it would have eighteen months of runway set aside (with a growth multiplier, at that,) and the rest of the funds would be put to use. The author, Mason, proposed a three tiered tranche system, based on risk ratings, which would rate the various USDC vaults and projects, such as Curve, Yearn, Maker, as well as riskier ones like Float and Dollar protocol.

I thought it was a brilliant solution to the problem that I’m not facing. How to preserve funds in a stablecoin while still maintaining yield and returns. I immediately copied the spreadsheet and put my numbers in it.

As you can see, allocation 1 and 3 provide nearly identical returns with less risk. I’m actually quite comfortable with allocation 4, but decided to go with 1 to be conservative. Another Bager commented that no more than 40% of any tranche should go to one project, but after some consideration of gas costs, I think it would be too much trouble to need to manage nine positions compared to six, so we’ll say that no more than half of a position should be deployed in any one vault.

The risk rating of each project is going to take some though. I’ll need to do some research to see if anyone has put a framework together already that I can build off of. For example, there are about a dozen or more Curve vaults with various stablecoin assets and returns up to forty percent. Some have one, three or four underlying tokens such as DAI, USDC, USDT, as well as other newcomers like USDP, GUSD and so forth. Each one will need some sort of risk rating. Then we have Yearn vaults which build on top of those Curve pools. Could a Yearn vault still be “safer” than one of the newer Curve vaults? How to we rate the Yearn V2 vaults versus V1?

Then there’s the matter of these newer projects like Vesper, Float Protocol, Fei, and Dollar Protocol. Those are going to require serious consideration. Normally I’m willing to stake funds in practically any single-asset vault for liquidity mining, but when you’re talking about an elastic rebasing token or sienorage token things are a bit different.

As of right now, I’ve got funds staked in the Curve USDP vault, considered tranche B (med. risk) by Mason, and I’ve got enough ready to stake for one of my tranche A low risk vaults. I’m leaning toward the yCRV vault with 34% APY. I’ve also been checking out these other projects closely to assess risk.

More research will be done.

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More insomnia

Yesterday I had a board meeting with Elder. It’s another idea I got from the Business of Family podcast to maintain a connection with her. Once a quarter, you basically take a half day to spend some time together. We went out to do some shopping and to to a trampoline park. We stopped by a couple of discount stores to purchase some housewares, and she went a bit crazy in the dollar store buying candy. I let her pig out. Then we went to the trampoline park to bounce for ninety minutes. It was, according to her, the best day ever.

I however, was less than thrilled, we were both overdressed for the strenuous activity, and our facemasks made it even worse. By the time we left we were both exhausted. And it really served to remind me how out of shape I am. I managed to make it to the top of one of the climbing walls, but my upper body has really atrophied lately. I’m feeling it this morning.

I went to bed at a decent hour last night, and was punished for it when I woke or was woken at 3:30AM and couldn’t fall back asleep. I tried meditating, listened to a podcast and tossed on the couch for the past two hours or so, but I finally gave up. My mind couldn’t stop thinking about crypto, OFC, and trying to figure out what to do next.

I’ve still got to wire seven thousand dollars to close our mortgage refi. Most of it is closing costs, but part of me just wants to cancel it and pay the whole thing off, but the problem is I can’t figure out what I want to divest myself of to do it. So much of my investments are heavily weighted toward a few large assets: bitcoin, both spot and GBTC; Voyager, in my IRA; and BadgerDAO, three different LPs for Badger and Digg, as well as staked versions of both. So I won’t be paying the house off, at least not this week.

My short term goal remains stocking up on USDC in my trading accounts, while rolling over my IRA funds to a crypto wallet. It remains slow going. I’ve only got access to $5k ACH transactions via FTX because they haven’t completed my verification, so I’ll have to bug them to get that lifted, or submit a wire request to them or Kraken. It’ll take me ten weeks at the rate I’m going, which isn’t necessarily a bad thing, but I don’t want to take a year to roll funds over.

I’m having a real hard time exiting my larger positions. I’m even finding it hard to sell five figures of a relatively obscure DEX token that I’ve been holding for a year and a half. Maybe it’s all the work I put into it years ago, but part of me is waiting for it to have another run. If I can bring myself to sell it I’ll be about one-third of the way to my June 1st goal.

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Spring Cleaning Day

It takes a village to clean my house

Pre-COVID, we hired a woman to come and clean our house twice a month. She or her daughter-in-law would come out as a group or by themselves and spend about four hours vacuuming, dusting, sweeping and mopping, cleaning clutter, changing the beds and that kind of general housework that we couldn’t keep up with because we were too “busy”. We paid them $130 every time they came out which was much cheaper than hiring one of the professional franchise companies.

When lockdown came we weren’t comfortable having them come to our home anymore, so Missus gave them a couple months pay as severance and let them go. So for the past year we’ve gotten into a bit of a system where I would take the kids out of the house for a couple hours each weekend and Missus would do as much decluttering as possible, cleaning bathrooms and the like. No one is really happy with the arrangement, Missus because she does most of the work, and me as I think the girls should be doing more for their part to help out. Myself, I do most of the kitchen work and cooking, so I guess I feel like it’s an upstair/downstairs kind of thing.

All this talk of my early retirement has rubbed a sore spot with my wife. If we’re so rich why can’t we afford a maid, she’s remarked to me several times. So I’ve been mulling over the decision to bring back our cleaning lady.

However, I’ve been listening to the Business of Family podcast, and one of the guests was talking about allowances. Now, for the last year or two, I’ve been giving the girls an allowance, one dollar a week times their age. I read a book at the time which recommended splitting the allowance into three pots: spend, save and give. The give pot was originally for charity, but I modified it for birthday and Christmas gifts instead. I found an inexpensive app called RoosterMoney that allows me to automate the process, and I can even offer interest on the save pot. The money gets deposited in their accounts on Friday, and I give them mostly free reign with the spend money. The save pots were supposed to be for big-ticket items that I would let them choose on their birthday, but as we’ve gotten more into downsizing and financial independence, I’ve decided to show the girls the value of compound interest. The money stays in the save pot, but I’ll let them disburse the interest gained once a month if they want. Elder has over three hundred in her account, which is giving her about a dollar and a half each month.

My plan is to stop giving them allowances when they turn thirteen, and allow them to start managing the save money, but I haven’t quite figured out what I’m going to do yet. I’ve also been saving up $50/month for their “education” fund, which through my investing success has grown to around five figures. I figured by the time they turn thirteen I would start getting them involved in the management of the funds, and I would hand it over to them when they turn eighteen. But if bitcoin continues compounding at two hundred percent a year like it’s been doing for the next decade, then that might be a serious amount of money, and I’ll have to reconsider how I hand it off.

So the guest on this podcast said that instead of giving kids an allowance and falling into the entitlement trap, that one allows them to earn it. He didn’t advocate paying kids to keep their rooms clean, but instead give them the opportunity to earn money doing something that you were going to pay someone else to do anyways, like yard work. Now I had originally experimented with doing DadPoints through the Rooster app, but it was too cumbersome to do daily chores in it. I used it one time to make the girls earn a trampoline for the backyard, but that was the end of the DadPoints system.

So I got it into my head yesterday that I was going to pay Elder to help clean the house. She’d been begging me for some money for whatever, and I told her that she could earn up to $130 to clean the house, top-to-bottom for four hours. She got very excited, and we decided to go for it. So around 11:30 yesterday morning we got started. I made a list of every room in the house, as well as all of the tasks that need to be done. It was about three pages long. Then we got started, and set a four hour timer on the kitchen stove. She went upstairs to start on the bedrooms, and I set to work in the kitchen.

I had sent Younger out of the house to play with her adoptive family. The kids came to ask if Elder could play but I told them she was working. After a while they came back to ask, but I sent them away again. I furiously cleaned the kitchen, doing some much overdue deep cleaning. One of the girls, Younger’s age, asked if they could come in and play. No, I said, we are cleaning in here, and if you come in here you have to clean also. Okay, she said.

I wasn’t ready to have a house-full of little ones running around, so I gave them a test. Clean up the back deck and yard, and then they could come in and start on the living room. It took them a while to get that done, and by the time our timer was down to ninety minutes, I let them in.

That last hour and a half was a blur. I was trying to clean, keep Elder and my three other kids busy cleaning. Missus puttered about but mostly kept herself locked in her office watching Netflix. I threw out so much trash and pulled stuff out from under furniture that hadn’t seen the light of day in months. I even found my car keys, that had been missing for weeks, underneath he upholstered chair next to my desk. (I blame the cats.)

When the timer went off I pulled all the dollar bills out of my money jar and set down with everyone to divvied the spoils. We weren’t able to conqueror the dining room table or our main office, so we knocked the total amount down to a hundred dollars. I wound up giving the younger kids five dollars for the help they did, and gave Elder twenty-five. The rest was mine, since I did most of the work anyways.

I was actually quite impressed with how things turned out. We got most of the house clean, no small feat, Missus didn’t have to do all the work, I didn’t have to pay for a maid, and the kids got to earn a bit of extra cash. It was such a success that I went and marked the third Saturday of each month on our calendar cleaning day. I figure I’ll let them do it again in April, and see if they get better at it and can get the house even more clean.

Fantastic.

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Aping New Uniswap Pools

I had a bit of a brainstorm earlier today.

Uniswap’s factory contract emits a pairCreated event whenever a new pool is established, so it’s fairly trivial to find the pool and purchase tokens right after the pool is launched, potentially before the project has even announced it. Dark Forest indeed. I’ve been watching a few of these to watch what happens after during these post event launches, and trying to figure out a way to build a bot that can exploit these launches.

Here’s one such transaction.

You can see here that someone is seeding a Uniswap pool with 1 ETH and 441 billion of these KONG tokens.

So a word about KONG. All I can find about it is kongdefi.finance. Just a basic website. No social anywhere, nothing on Twitter other than a single tweet mentioning it, and a reply back to that has failed to garner a response yet.

Anyways, looking at the actual contract log event:

The first Hex value returned is the address of the Uniswap pair, and you can paste it into the Uni search box or into the address bar to find it. Just remove the leading zeroes and add ‘0x’ to it. So you can see the KONG-ETH pair here. You can also watch the chart on DexTools as well.

I did a bit of digging into the contract code and the holders to try and evaluate the likelihood of a rugpull. The contract creator made 1 trillion tokens, burned less than half of them, then deposited about eighty percent of what’s left into the Uni pool with the single ETH. They’re still holding about five percent of the supply. Much of the Uni LP tokens seem to have been put into a token lock contract, but not all of them.

I threw a little bit of ETH at KONG just for kicks, and saw my funds go up about double, so I threw five times that at it, hoping it would do the same, but there was a dump and it’s been chopping around since then. One of the first buyers got in for 0.4ETH and was able to sell less than half the position back for over seven ETH. Not bad for an hours work. They’ve sold another smaller portion off again. What a profit.

I aped into another token again, a few minutes ago, with disastrous results. I basically turned 0.1ETH into 0.003 in about twenty minutes. No website, no Coingecko listing, probably just someone taking advantage of idiots like me, trying to play the DarkForest game.

Some backtesting is going to be needed. There’s probably dozens of LPs created each day, so spraying and praying probably isn’t going to be the best option. These low liquidity pools are probably all scams, so it’s probably best to stay away from them. I’ll have to spend some time looking over the higher value pools and figuring out which projects are quality.

I’ve been brainstorming on how to automate this process. There’s a Uniswap Token Listing bot on Twitter, but I’ve noticed that it’s slow to catch things. There may be a way to do it using Nansen, if I can afford the monthly fee, but I can probably build something myself using Python and Alchemy. Catch the events, figure out what tokens they are, look up Coingecko to find the website, then set an alert if there’s a match. I might even be able to deploy funds if those criteria are met.

More research is needed, but I’ll probably experiment with a few more of these over the next couple days to see if it’s a viable strategy.

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Insomnia

Yesterday Elder woke me up at 4:30AM after an accident. I had only been to bed since midnight but my ADHD-addled brain wouldn’t let me go back to sleep afterward. I spent the next couple hours on the verge of sleep before getting up and meditating. I managed to fall asleep for another hour but by eight I was completely awake and mostly useless. Thankfully I went to bed before ten last night and slept like a baby. So here I am. My

My project work at Zombie, LLC is winding down. I have a couple of things I need to wrap up on Friday, but then I think the way is pretty much clear for my departure. I still need to complete my resignation letter, and there’s a lot of things that I need to do elsewhere to make sure everything happens on track.

Missus and I just signed our closing documents for our refi. It seems kinda stupid to me to be paying twenty-five hundred in costs when I plan on paying the whole thing off in a few months, but it was for Missus’s peace of mind, not mine. It’ll take a couple months for us to get our escrow back from our current lender, then we’ll be getting new windows here at the house. Our stimulus and tax returns will be paying most of that.

I’ve got a lot of funds in play right now. My 60-day IRA rollover is on the way to the LLC bank, once it clears it’s on to FTX, and eventually to my new hardware wallet, which is coming Thursday night. I’m not quite sure what I’m doing with it quite yet, but I’m pretty sure it’s all going straight into ETH and DeFi. I’m starting to liquidate my personal holdings and am doing yield farming with my USDC. There’s a lot going on with BadgerDAO right now, so I’m keeping a close eye on things and trying to decide what to do. DIGG is hemorrhaging capital right now, and Badger itself is holding somewhat steady in USD terms, but falling slowly against BTC. Other than that, I’m trying to bring myself to sell my IDEX funds. It’s still up 10x from where I purchased, but it’s not really doing much of anything. Apparently I’m earning drops on BSC and some other chain, but I don’t have time to keep up with it and would rather just sell it and farm the proceeds. I brought up the transaction on Zapper several times yesterday, but couldn’t bring myself to pull the trigger. Maybe today.

There’s a lot going on with Homebrew.Finance and MUG this weekend. TokenSet/SetProtocol now allow editing the Set page, so I’ll be able to update it with the Homebrew website and Twitter. We’re supposed to be doing our first reissue and rebalance this weekend. So far the plan is to move forward with liquidation, but I’m looking for a way out of doing that, cause it’s going to be expensive. I might just need to put tokens up on Uniswap or try to sell them OTC to raise some funds first. I’ll probably need to think this through a bit more, and should focus on getting the snapshot.page deployed. There’s a lot of work to do.

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Information overload

Today was “busy”, but not in a productive way. I didn’t get nearly as much done as I wanted to for work, but the last 24 hours have been pretty effective in a spring-cleaning way. I blame Daylight Savings. Yesterday the entire fam washed the car and cleaned the yard, did a bunch of cleaning around the house. I even did our books. Today I cooked dinner for the fam and the kids’ friends down the street, and they played outside with such joy that Missus and I couldn’t help but smile.

I also made my way down to my bank to start a wire transfer for my 60-day IRA rollover. This process has been so excruciatingly slow. And I just had to go down there the first weekday after everyone got their stimulus checks. I noted today that they were calling it the “Rescue America Act”. I’m amazed that it took so long for this bit of trivia to become known to me. Anyways, it should take two days for the wire to complete, another four days to transfer to the LLC bank, then another ACH to FTX and I’ll be able to load up. Just in time for my new Lattice1 wallet to arrive.

I sat down last night with my spreadsheet and tried to make sense of all the things I’ve been doing with Badger. I was trying to prep myself to take some profits. Since most of my capital is locked up in LP, I’m very concerned about impermanent loss. And the rewards are starting to get to the point where it’s not worth it for me to hold. This last weekly “harvest” was rather underwhelming, considering gas prices. I was working my way to a plan to exit my liquidity pools so that I’d have just wBTC and Badger, but then I saw a Tweet that the $CLAWS product will be released soon.

I can’t find the YouTube video which describes it, but basically we’ll be able to mint some sort of derivative using out BadgerDAO LPs. These will be 60-day tokens that will expire in 60-days, so we may be able to sell them for stablecoins, then farm these tokens. I’m not really sure I understand it quite yet, but if they launch by April 1st then I may decide to hang onto my LP tokens and try to take advantage of some stablecoin yields.

I’ve been liquidating positions to USDC and wBTC. USDC is going toward my one-year “retirement” runway, and the wBTC is going toward the “pay off the mortgage” funds. I’m looking at ways to stake them for yield, which I consider safer than altcoin plays right now. I may risk some of my IRA funds on some potential altcoin plays if it looks like altseason is still in play, but for the most part I’m just going to be farming tokens. Staking wBTC or USDC for liquidity mining is relatively safe, but I’m going to need a lot to make it worthwhile.

There’s so much I want to do. I literally can’t think of much else beyond crypto these days. In addition to keeping up with what’s going on with bitcoin and macro, there’s Ethereum and DeFi. I really want to take a look at what’s going on with Polkadot, and what’s going on with Rune and Avalanche seems really interesting as well.

TokenSets is taking a lot of my time as well. I just had two people reach out to me who jumped into creating a set without understanding how it works. My contact on the team has promised me that some goodies are coming, so we’ll see how that plays out. It’s just so sad to see people jumping into wasting the gas to make this protocol without understanding how it works.

For now, all I can do is keep my head down and keep grinding. There’s lots of work to do.

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Sixty one thousand

About a year ago, when I first started writing about reFIREment, I added up my debt on a whiteboard, mortgage and student loan debt. I divided that debt by the number of bitcoin in my hardware wallet and wrote the price BTC would need to hit in order for the value of that bitcoin to zero out that debt. It didn’t really hit me yesterday, but we hit that number.

But I’m not selling. In fact, I went in the kitchen and erased that old number and wrote a new one. One-hundred twenty thousand.

In addition to my bitcoin, I’ve got BlockFi accounts for all four of us in the house, plus I’m holding some funds for my dad through our spec mining partnership. In addition to that, I’ve got ethereum wallets that contain even more funds. All said, it’s a stupid amount of money, considering where we were a year ago.

I’ll be reassessing some things later this morning, but I’ll probably be pulling my BadgerDAO LP stake out of at least one or more pools this morning, starting with the Badger-wBTC Sushiswap pool, since it’s the only one that I can positively claim is mine, and doesn’t have any co-mingled funds in it. The rewards I’m getting aren’t enough to justify the impermanent loss that I expect on this next leg up for BTC. It will trigger a, shall we say, taxable event, so I’m still not sure how I want to deal with it. wBTC will probably stay as it is, but I may need to liquidate my Badger to USDC. I’m still bullish on the DAO, but the goal right now is at least a year’s salary in stablecoins by June 1st, my official “retirement” date.

I’ve got a new hardware wallet on the way, I’ll be restructuring how I handle funds to keep things easier to manage. Separate ETH addresses for everyone will have to be the way moving forward, cause calculating NAV manually in a mixed wallet is just to challenging for me. Crypkit looks like it might have the features that I want, but at $300/month, it’s a bit too pricey for me right now. Once I hit my goal I can put a business plan into action, and can justify the cost of fancy accounting software and other subscriptions.

Elder drew a really nice leprechaun for St. Patrick’s day, and I started looking into what I need to do to mint it as an NFT. I was playing around with MurAll ($PAINT) last night, trying to figure it out. I estimated for about $300 PAINT tokens based on the size of the picture, but the gas to mint it is several hundred dollars more. I also spent some time messing around with Rarible as well, but didn’t get around to finishing it before it was Elder’s bedtime. I’m going to investigate some more this morning, and see if there are better options available.

I also showed her Printful, and gave her some ideas about making some customised items. She’s got ideas. Just-in-time shops are much cheaper to set up than minting NFTs, that’s for sure.

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Sixty thousand

In three weeks, the price of bitcoin has gone from fifty-eight thousand dollars on February 21st, down to forty-three a week later, and has now breached sixty on some exchanges.

I hope you bought the dip, friend.

Yesterday was hectic for me. Bossmang decided that he wanted to do a router and UPS installation the day before, which would have been a simple task, but quickly turned into a panic job. I had forgotten that we had scheduled a visit to the passport office to get passports updated or issued for everyone. So while I’m on the phone trying to coordinate new IPs and remote router configuration with him, the kids are screaming at each other while I try to get them to make lunch. On top of that, Friday was supposed to be my “public announcement” of my retirement, but by the time I got back and finished up the day, it was too late to get it out by my original 4PM Friday deadline. I did manage a thousand words or so, a nice start.

Yesterday was beautiful, the weather reached seventy and sunny. It got hot in the house, but rather than put on the AC I just opened all the windows before bed. Friday evening was tame, we let the girls have their friends over for TV and pajama party. I actually wound up going to bed at a decent hour, read a chapter of Shantaram and When Money Dies before passing out. I woke up this morning with cool air coming in the window along with the sounds of birds chirping, so I got out of bed very early and checked the price. Retirement is back on.

I’m still no closer to figuring out how to pay off the mortgage. I’m hoping it will be an easier decision in the next few weeks. For now, I’ve got about twenty pounds of pork sitting on the counter, waiting for me to fire up the smoker. Today will be chill, nothing to do but cook and write, and plan for the future.

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Exit plan, revised

I spoke to a wealth management expert yesterday. It was an interesting conversation, to say the least. They had reached out to me via LinkedIn because we share the same alma mater, and I figured it was good timing, given my current interest in wealth management, and generational businesses.

They were actually fairly familiar with crypto, they had a background in information systems. He had heard of DeFi, but I think I lost him explaining that and when the subject turned to the work we were doing with MUG token. He wasn’t judgy at all, either.

We spoke for about an hour, I asked him to describe his professional career, and then I launched into my story of running a business (into the ground) in my mid-twenties, and getting started in investing shortly there after. I got into spec mining in 2014, bought ETH when it was pennies, then cashed out my brokerage account for crypto during the 2017 run, and watched my modest four-figure stack turn into six figures over that winter. The sudden success caught me by surprise, and, lacking an exit strategy, I held all the way down through the 2018 correction till my holdings were only 80% of what they had peaked by the start of 2019.

I spent the next two years continuing to invest in bitcoin, and doing spec mining and basically learning everything I could about the industry, and positioning my investments within my IRA among crypto-related equities like $GBTC, $MARA and $RIOT. Q420 was a blast.

As the bitcoin bull-market resumed in the latter half of 2020, crypto-related equities actually outperformed BTC by an order of magnitude. So while my crypto portfolio gained 10x, my IRA actually outperformed BTC, despite GBTC and the others only representing a modest portion of my original cost basis.

I talked about the FIRE movement, and how we came up with out magic number using the four percent rule. That, my new friend understand. I told him basically how we had set our FIRE by 2024 plan last year, (halving to halving), and how we were already hit our goal in one year. Well, almost.

We’re close, but not close enough for me to just call it quits and cash out. The difference between this cycle and the last is that we have plenty of lending platform that can provide a significant yield income on crypto and stablecoin deposits. Obviously there’s no telling how long it will last, but if things keep up we may have to rewrite the four percent rule to the twenty percent rule.

My wife has put some qualifications on my upcoming so-called retirement: no debt. So I’ve got to pay off our mortgage if I want to avoid separation. The question is, how to go about that? I’ve already decided that I’ll need a significant cash cushion, equal to a years salary, and I’ve started taking claimed profits from my highest generating project and selling that to stable coins. That’s not gonna get me all the way there, so I’m looking to liquidate some of my smaller, more speculative assets that have done well to cash as well. That may get me closer, but my plan is really dependent on a run to six-figure BTC — and beyond. Somewhere between $100-120k should do the trick.

I told my new acquantaince that if I can double my IRA, I’d have enough money to pay the income tax, early withdrawal penalty, pay off the mortgage, and still have enough left over to provide interest income to satisfy our new, lower magic number. More than half of our monthly expenses are our mortgage, so paying this off would lower our capital requirements significantly.

They pointed out a couple points that I had misunderstood. First off, I was under the impression that any pre-retirement distribution from an IRA would cause the entire IRA to be considered as income. He corrected me, that only the distribution itself would be, the rest of the IRA would be still be protected. He also pointed out that selling my long-term BTC holdings would only be taxed at fifteen percent, instead of the forty percent that an early IRA withdrawal would cost.

I’ve been running the numbers back and forth all day, trying to figure out what’s the right thing to do. I am more emotionally attached to the bitcoin I own, I’ve got a hodler’s mentality and have been telling myself that I’ll never sell them — although that’s not quite true. Right now my moving target, (3.6*200-day moving average) is around $87k and rising, so it may be a while before we get there.

Thankfully, I don’t have to make any decisions right now. I’ll just keep taking profits on the smaller positions and yield generating protocols every week or so, and revisit where we’re at in a month.

And here we are now, with BTC edging $80k and toying with new ATH. Things are looking very nice indeed.