My Two Satoshis

Volume VI: September 27th, 2021

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Market Cycles:

BTC:

Sep 27: Managed to fill bids aggresively at 42.9k following the cascading liquidations on Monday and Tuesday. Overwhelmingly bullish going into Q4 with talks of an ETF heating up.

ETH:

Sep 27: Nothing much has changed with ETH, it remains a higher beta (higher risk, higher reward) play than Bitcoin. It did bounce off the ~2785 support like we expected so filled some bids there too. Spot Long.

SOL:

Sep 27: Still in a good spot, if you're actively trading a good time to derisk and rotate into more lucrative narratives as the market seems to be going from L1 --> DEX. However long-term holders, between 130-140 is a good place to add.

Coin Analysis: Avalanche ($AVAX)

This week we’ll be talking about the hottest coin and hottest ecosystem on the market, Avalanche. So similar to Solana and Ethereum, Avalanche is another Layer 1, meaning it’s another unique blockchain architecture. It has its difference compared to those two and other chains that make it special, most notably it’s extremely high scalability and extremely low finality. Scalability refers to the fact that it can support making 4500 transactions on the network per second (tps), in comparison to 30 tps for ethereum. Whereas finality refers to the assurance or guarantee that cryptocurrency transactions cannot be altered, reversed, or canceled after they are completed. If this is too technical for you, no worries, the most important takeaway is: AVAX is good, we like AVAX. This is a really good article that explain the technical aspects in more detail if you are interested. As it has its own chain it also has its own fully fledgling ecosystem, that is being built out before our very eyes. For example, the money market equivalent to Aave is called Benqi ($QI), the decentralized exchange equivalent to Perp or Serum is called Trader Joe ($JOE), the yield aggreagator similar to Yearn or Sunny is called Yield Yak ($YAK). Similarly to ETH and SOL is that there’s also a flourishing NFT space - still very speculative but we wanted exposure to what we thought is the blue chip NFT collection on Avalanche - Avax Apes.

This is our Avax Ape, Ape #7410. We bought him for ~7 Avax when Avax was $50, now both the price of the NFT and the coin have risen so he’s now worth 12.5 Avax or ~$875.

Another amazing thing being part of crypto in general is the free airdrops, simply for using the protocol or the chain wallets are given free tokens in that specific project, some of which can lead to ridiculous amounts of money, like the dydx airdrop is worth over $100k right now (we’re totally not salty we didn’t get that by the way). Simply for using the bridge from Ethereum to Avalanche we got the $GB airdrop, which is worth approximately $2.5k at the time of writing.

Good Bridging Token @GoodBridging

GB!

In terms of ranking our exposure to the AVAX ecosystem it’s currently 1) $JOE 2) $AVAX 3) $QI 4) $GB and 5) Avax Apes.

We’re long-term bullish on Avalanche, however not as much as ETH or SOL, this has certainly been more of a speculative play but one that has turned out very well for us. 🐂

Blockchain 101: Liquidity Mining

Avalanche Rush was announced on August 18th and officially commenced on September 22nd, the price of $Avax was ~$20 prior to announcement, and is ~$70 at the time of writing. It pays very very well to keep up to date with announcements in crypto. In homage to the biggest liquidity mining incentive we have seen in the space so far we’ll be talking about Liquidity Mining in general for this 101. Liquidity Mining or Yield Farming, is a slightly complex concept so you’ll need to bear with us. There are 5 types of Liquidity Providing (LP) methods you can do to earn yield on your assets; Staking, Liquidity Providing, Stable LPs, Stables or Lending. A brief rundown, Staking is lending out your coins for a fixed amount (say 5%) and receiving more at the end of the staking period. LP’ing is providing equal amounts of two assets and earning a high yield on one of them, like we’re currently in the JOE-AVAX pool that is currently paying out 243% APY. Stable LP’s are safer as one of the coins is a stablecoin (pegged to the US), so it’s far less likely to crash, currently we’re the JOE-USDT pool that is paying out 426% APY. Stablefarms are really interesting because you’re providing equal amounts of two different stablecoins (essentially lending out USD) however instead of the fraction of a % you would get at a bank, we’re getting 21% depositing USDC & USDT. Finally lending is simply depositing actual USD but since it’s in the crypto ecosystem, you can get anywhere between 4% fixed or 8-12% variable yield, through places like Compound, Coinbase or FTX respectively.

On the crypto risk totem pole it’s between HODLing and actively trading. Similarly, its rewards are between those two as well, far far more profitable than HODLing, but also unlikely to 100x-1000x your portfolio size via farming.

Taiki Maeda is a yield farming Youtuber and a fantastic resource if you’re looking to learn more about farming and LP’ing