Morning pages

Yesterday I spent most of my time trying to migrate a production WordPress site to my development environment. Normally, I’ve used Infinite WordPress’s site migration tools to move them, which does the trick of moving all the files and updating the database references to the site URL, but I don’t think it works when the site’s not public. I’m doing a lot of hacks with my Docker setup, importing databases, messing with file permissions, and duplicating a lot of my work since I like to sit downstairs at my desk during the day, and upstairs at night. So part of my challenge is trying to find a setup that works well for me.

I might have to make some sacrifices. JetBrains IDEs don’t like to work over the network, so I’ve got to add a directory sync if I want to keep the files on my network server and work from both workstations. At least I can run Docker from the remote machine, but it’s not supported by the IDE, so I’ll have to figure out how to fit that into my workflow.

The girls were good. Elder did everything I asked her, and got her extra screen time. She did Typing, piano, and two sessions of math in Khan’s, and we managed to keep the house tidy. So that’s a big parenting win. She’s already up and on her laptop right now, ostensibly doing typing, but I don’t hear too much of it going on over there. Maybe she’s doing math.

We had a bit of excitement yesterday when bitcoin went on a little bit of a tear. I noticed it shot up to touch ten thousand and got excited. Elder came over and said “it went UP,” excitedly. We watched the fight for a few minutes, before it dumped, and then went on a bike ride.

I moved my entire Ethereum stash over to BlockFi. There’s always a moment of horror after publishing a large transaction to the blockchain when the doubt sets in. Wondering whether the address was copied correctly or if my opsec failed and some hacker changed the receiving address while it was in my clipboard. Did I check the address. I usually do a small test transaction before sending over the big one, but it still makes me nervous. Especially after reading about the mining firm that said someone sent a $144 Eth transaction with $131 million in gas fees.

So now I have a fair chunk of my assets up on BlockFi. I haven’t touched but a fraction of my BTC; it’s just too much risk for me to do that. I’ve got a roughly even spit on there between BTC, ETH, and USD stablecoins, and I’m considering whether to put more USD there. I’ve still got the girl’s BTC accounts, but I don’t want to mix them with mine, and I’m not yet sure if I can open an account in their name or if I’ll have to do like I did for lending club and make multiple ones in my name.

Due to the coronavirus, the IRS is allowing 2019 IRA contributions up until July 1. I’m considering whether I want to do this, or throw some more cash into BlockFi. My IRA is on fire right now, I calculated 70% realized gains off of this market rally, and my unrealized gains for the year are much higher than when I calculated them a couple of weeks ago. I’ve still got active value average positions that are in play, and I’m probably going to be short on cash before they complete, so I need some powder. I just doing know whether I should sell some of my other positions, or put more cash into play. All of my current plays are under risk-adjusted position sizes, but my long term holdings are just sitting without any stops on them. With everyone going crazy on RobinHood these days, I should probably put some protections in place in case there’s another lockdown related pullback.

Yesterday, a client’s laptop failed, and I’m waiting on a vendor to go out there and swap a motherboard or something. The drive is encrypted, and while I’m certain I have the keys, I felt a shot of adrenaline course through my body when I remembered that I neglected to reinstall a backup program on her machine after replacing it. So I know what I’m doing today. What I don’t know is what I’m posting tomorrow for my newsletter. This post has been the type of rambling morning pages post that’s of no use to anyone but myself, and which is not the type of quality content that I want to be sending out to my LinkedIn network, or to the email list which I just salvaged from an old CSV file.

I’m going to let that one mull in my head today, and let it stew.

Stablecoin lending interest with DeFi

So there’s been a bit of life in the crypto markets the past day or two. Bitcoin has been trending in a range. Cryptotwitter is debating whether it’s a descending triangle or a wedge, trying to predict whether a breakout up or down is coming. It looks to me that it’s in a consolidation zone. I have been holding off on purchasing much fiat to BTC, since I have other financial responsibilities that are taking precedence. Plus I have too much exposure, in general.

I have begun plans to phase out my use of Lending Club for investment purposes. I had started separate accounts for both of my kids, and was happy with the $25-50/month that I had been setting in there for them, with three to five percent interest. But around the time of the bull run, October 2017, I decided to start putting those funds into BTC, giving both of them their own wallets. I let Lending Club continue to reinvest the returned payments. Until recently.

The big talk in the cryptoasset space right now is in decentralized finance, or DeFi. Most of the major apps in the space rely on Ethereum smart contracts, stable coins like Dai being the most prominent. I became aware of platforms like Compound, which allow lending and borrowing of several assets, like Dai, Ether, and others. The basic premise behind Compound is that people deposit their assets with the smart contract, and can then use those assets as collateral to which they can borrow other assets. The reasons why is something I really can’t explain. I assume most of it is speculative trading; a bit to risky for me given the borrrower APR.

Now with Dai, which tries to maintain a 1:1 parity with USD, has had a 20% stability fee assessed against it. Which is why it had a nearly twelve percent lending interest rate on Compound a few weeks ago. I had to try it out. I had some change on Coinbase, so I bought twenty bucks worth of Dai, transferred it to a Metamask wallet, and had it deposited at Compound in no time.

Supply (lending) interest rates on Compound for Dai and USD coin are much higher than traditional finance (for now).

Now, this is not financial advice, and there is a risk with DeFi and smart contracts. There is the possibility that there is a flaw in either the Compound or Dai contracts, and something could go horribly wrong. But I’ve decided to stop reinvesting the kid’s funds on Lending Club, and will start moving their funds over to Compound as the loans are paid out. There’s no sense in lending USD at less than three percent, given that it’s hardly better than inflation. Now the rates on Compound and other DeFi applications can fluctuate daily as well, so I’ll need to keep an eye on things and make sure nothing crazy happens.

Given that I want to take advantage of this new opportunity, without increasing exposure to BTC directly, gaining high interest on stablecoins pegged to USD seems like a no brainer.