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👀 Exclusive: Whale 0xb1 Reveals Best Trade & Big DeFi Vision
Also, BTC & ETH outperform crypto hedge funds, aTokens porting to Layer 2
Hello Defiers! Here’s what we’re covering today:
Exclusive interview with DeFi whale 0xb1
Crypto hedge funds underperformed hodling last year
Aave’s aTokens can now be ported to Matic’s Layer 2
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🙌 Together with Zerion, a simple interface to access and use decentralized finance, and Value DeFi Protocol, a suite of DeFi products including the Value Liquid AMM, which allows anyone to create trading pools with flexible ratio pairs.
DeFi Whale Speaks
TLDR 0x_B1, a pseudonymous trader or traders who holds at least 1% of assets in DeFi, isn’t just about cold, hard cash. In an exclusive interview with The Defiant, they revealed their long term vision for the space, and how their motivation goes beyond financial gain —though of course, they’re raking in profits too.
0x_B1, believes the world’s largest banks will adopt some of the characteristics of decentralized finance, yet designed for state-sanctioned digital currencies. The mysterious whale also revealed his best and worst trades, and what he considers before investing in a project.
DeFi “will bleed into the JPM [JPMorgan] Citi [Citibank] GSs (Goldman Sachs) of the world, as the rise of CBDBs [Central Bank Digital Currencies] will lead these scrambling for their own COMPs and AAVEs of their world,” they said in an interview.
BEST TRADE 0x_b1 provided insights into their investments, saying that, for the first few days of CREAM’s Cream Swap, the wallet was generating $75K to $150K an hour. And while CREAM was their best trade, Harvest Finance was their worst one, because of the project’s exploit.
Buy and Hodl
TLDR Sometimes “HODL” really is the best advice. Simply holding Bitcoin and Ether massively outperformed crypto hedge funds (along with the vast majority of non-crypto assets) in 2020.
Eurekahedge and Vision Hill Group indices tracking crypto hedge funds show returns for the portfolios are lower than gains for ETH and BTC
📈 Returns in 2020 through November (the latest date for which there’s data for all the indices):
SO WHAT? Investors pay about 2% management fees and 20% performance fees for crypto hedge funds to manage their assets, according to PwC’s 2020 Crypto Hedge Fund report. That’s not a good deal if managers aren’t beating the benchmark cryptocurrencies.
TLDR Aave’s aTokens, minted when users deposit digital assets into the lending protocol, can now be ported to the Matic Network, a version of the Layer 2 solution, Plasma.
“Once aTokens are transferred to Matic Network they can be transferred to any person on Matic Network and any systems on Matic Network,” Aave-Matic bridge’s creator, Nick Mudge, told The Defiant.
🏎 SO WHAT? Layer 2 takes transactions off the Ethereum main chain, making it cheaper and faster to use the network. Users will be able to acquire and trade interest-generating maTokens (aTokens which have moved to Matic), without the gas-guzzling fees.
AAVEGOTCHI DRIVES MOVE Mudge, the Lead Solidity developer for Aavegotchi, the non-fungible token (NFT) staking game, mentioned another reason for creating the bridge to Matic: he needs transactions to become cheaper for the game.
PAGING MARC CUBAN With the launch, it may be time for the Aave team to get Marc Cuban’s attention again, as the business mogul recently delighted DeFi with his knowledge of the sector, but also lamented that “the gas is always the issue. Just the cost of moving crypto to AAVE is crazy expensive.”
Ether, the second-largest cryptocurrency, could climb more than sevenfold to $10,500 after reaching a record this week, according to Fundstrat Global Advisors LLC, Bloomberg News reported. Strategist David Grider’s prediction is based in part on the popularity of the related Ethereum blockchain for so-called decentralized finance applications. Ethereum has also made progress toward a network upgrade would allow it to process a similar number of transactions as Mastercard Inc. and Visa Inc.
BlackRock is adding Bitcoin futures as an eligible investment to two funds, the first time the money manager is offering clients exposure to cryptocurrency, Bloomberg News reported. The world’s largest asset manager filed updated prospectuses for its BlackRock Strategic Income Opportunities and BlackRock Global Allocation Fund Inc. funds, including cash-settled Bitcoin futures among assets they’re permitted to buy. Derivatives using cash settlement do not require delivery of the underlying asset.
Janet Yellen, President-elect Joe Biden's nominee for treasury secretary, suggested on Tuesday that lawmakers "curtail" the use of cryptocurrencies such as bitcoin over concerns that they are "mainly" used for illegal activities, Business Insider reported. Yellen's comments suggested the incoming Biden administration could be hostile to cryptocurrencies and ramp up regulation.
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🧑💻 ✍️ Stories in this newsletter were written by Daniel Kahan and Owen Fernau, and edited by Camila Russo. Video was produced by Robin Schmidt and Alp Gasimov. The podcast was led by Camila Russo and edited by Alp Gasimov.
The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money. Sign up to learn more and keep up on the latest, most interesting developments. Subscribers get full access, while free signups get only part of the content. Click here to pay with DAI (for $100/yr) or sub with fiat by clicking on the button above ($10/mo, $100/yr).