More on Web3 & Crypto
Ryan Weeks
3 years ago
Terra fiasco raises TRON's stablecoin backstop
After Terra's algorithmic stablecoin collapsed in May, TRON announced a plan to increase the capital backing its own stablecoin.
USDD, a near-carbon copy of Terra's UST, arrived on the TRON blockchain on May 5. TRON founder Justin Sun says USDD will be overcollateralized after initially being pegged algorithmically to the US dollar.
A reserve of cryptocurrencies and stablecoins will be kept at 130 percent of total USDD issuance, he said. TRON described the collateral ratio as "guaranteed" and said it would begin publishing real-time updates on June 5.
Currently, the reserve contains 14,040 bitcoin (around $418 million), 140 million USDT, 1.9 billion TRX, and 8.29 billion TRX in a burning contract.
Sun: "We want to hybridize USDD." We have an algorithmic stablecoin and TRON DAO Reserve.
algorithmic failure
USDD was designed to incentivize arbitrageurs to keep its price pegged to the US dollar by trading TRX, TRON's token, and USDD. Like Terra, TRON signaled its intent to establish a bitcoin and cryptocurrency reserve to support USDD in extreme market conditions.
Still, Terra's UST failed despite these safeguards. The stablecoin veered sharply away from its dollar peg in mid-May, bringing down Terra's LUNA and wiping out $40 billion in value in days. In a frantic attempt to restore the peg, billions of dollars in bitcoin were sold and unprecedented volumes of LUNA were issued.
Sun believes USDD, which has a total circulating supply of $667 million, can be backed up.
"Our reserve backing is diversified." Bitcoin and stablecoins are included. USDC will be a small part of Circle's reserve, he said.
TRON's news release lists the reserve's assets as bitcoin, TRX, USDC, USDT, TUSD, and USDJ.
All Bitcoin addresses will be signed so everyone knows they belong to us, Sun said.
Not giving in
Sun told that the crypto industry needs "decentralized" stablecoins that regulators can't touch.
Sun said the Luna Foundation Guard, a Singapore-based non-profit that raised billions in cryptocurrency to buttress UST, mismanaged the situation by trying to sell to panicked investors.
He said, "We must be ahead of the market." We want to stabilize the market and reduce volatility.
Currently, TRON finances most of its reserve directly, but Sun says the company hopes to add external capital soon.
Before its demise, UST holders could park the stablecoin in Terra's lending platform Anchor Protocol to earn 20% interest, which many deemed unsustainable. TRON's JustLend is similar. Sun hopes to raise annual interest rates from 17.67% to "around 30%."
This post is a summary. Read full article here
OnChain Wizard
3 years ago
How to make a >800 million dollars in crypto attacking the once 3rd largest stablecoin, Soros style
Everyone is talking about the $UST attack right now, including Janet Yellen. But no one is talking about how much money the attacker made (or how brilliant it was). Lets dig in.
Our story starts in late March, when the Luna Foundation Guard (or LFG) starts buying BTC to help back $UST. LFG started accumulating BTC on 3/22, and by March 26th had a $1bn+ BTC position. This is leg #1 that made this trade (or attack) brilliant.
The second leg comes in the form of the 4pool Frax announcement for $UST on April 1st. This added the second leg needed to help execute the strategy in a capital efficient way (liquidity will be lower and then the attack is on).
We don't know when the attacker borrowed 100k BTC to start the position, other than that it was sold into Kwon's buying (still speculation). LFG bought 15k BTC between March 27th and April 11th, so lets just take the average price between these dates ($42k).
So you have a ~$4.2bn short position built. Over the same time, the attacker builds a $1bn OTC position in $UST. The stage is now set to create a run on the bank and get paid on your BTC short. In anticipation of the 4pool, LFG initially removes $150mm from 3pool liquidity.
The liquidity was pulled on 5/8 and then the attacker uses $350mm of UST to drain curve liquidity (and LFG pulls another $100mm of liquidity).
But this only starts the de-pegging (down to 0.972 at the lows). LFG begins selling $BTC to defend the peg, causing downward pressure on BTC while the run on $UST was just getting started.
With the Curve liquidity drained, the attacker used the remainder of their $1b OTC $UST position ($650mm or so) to start offloading on Binance. As withdrawals from Anchor turned from concern into panic, this caused a real de-peg as people fled for the exits
So LFG is selling $BTC to restore the peg while the attacker is selling $UST on Binance. Eventually the chain gets congested and the CEXs suspend withdrawals of $UST, fueling the bank run panic. $UST de-pegs to 60c at the bottom, while $BTC bleeds out.
The crypto community panics as they wonder how much $BTC will be sold to keep the peg. There are liquidations across the board and LUNA pukes because of its redemption mechanism (the attacker very well could have shorted LUNA as well). BTC fell 25% from $42k on 4/11 to $31.3k
So how much did our attacker make? There aren't details on where they covered obviously, but if they are able to cover (or buy back) the entire position at ~$32k, that means they made $952mm on the short.
On the $350mm of $UST curve dumps I don't think they took much of a loss, lets assume 3% or just $11m. And lets assume that all the Binance dumps were done at 80c, thats another $125mm cost of doing business. For a grand total profit of $815mm (bf borrow cost).
BTC was the perfect playground for the trade, as the liquidity was there to pull it off. While having LFG involved in BTC, and foreseeing they would sell to keep the peg (and prevent LUNA from dying) was the kicker.
Lastly, the liquidity being low on 3pool in advance of 4pool allowed the attacker to drain it with only $350mm, causing the broader panic in both BTC and $UST. Any shorts on LUNA would've added a lot of P&L here as well, with it falling -65% since 5/7.
And for the reply guys, yes I know a lot of this involves some speculation & assumptions. But a lot of money was made here either way, and I thought it would be cool to dive into how they did it.
Crypto Zen Monk
2 years ago
How to DYOR in the world of cryptocurrency
RESEARCH
We must create separate ideas and handle our own risks to be better investors. DYOR is crucial.
The only thing unsustainable is your cluelessness.
DYOR: Why
On social media, there is a lot of false information and divergent viewpoints. All of these facts might be accurate, but they might not be appropriate for your portfolio and investment preferences.
You become a more knowledgeable investor thanks to DYOR.
DYOR improves your portfolio's risk management.
My DYOR resources are below.
Messari: Major Blockchains' Activities
New York-based Messari provides cryptocurrency open data libraries.
Major blockchains offer 24-hour on-chain volume. https://messari.io/screener/most-active-chains-DB01F96B
What to do
Invest in stable cryptocurrencies. Sort Messari by Real Volume (24H) or Reported Market Cap.
Coingecko: Research on Ecosystems
Top 10 Ecosystems by Coingecko are good.
What to do
Invest in quality.
Leading ten Ecosystems by Market Cap
There are a lot of coins in the ecosystem (second last column of above chart)
CoinGecko's Market Cap Crypto Categories Market capitalization-based cryptocurrency categories. Ethereum Ecosystem www.coingecko.com
Fear & Greed Index for Bitcoin (FGI)
The Bitcoin market sentiment index ranges from 0 (extreme dread) to 100. (extreme greed).
How to Apply
See market sentiment:
Extreme fright = opportunity to buy
Extreme greed creates sales opportunity (market due for correction).
Glassnode
Glassnode gives facts, information, and confidence to make better Bitcoin, Ethereum, and cryptocurrency investments and trades.
Explore free and paid metrics.
Stock to Flow Ratio: Application
The popular Stock to Flow Ratio concept believes scarcity drives value. Stock to flow is the ratio of circulating Bitcoin supply to fresh production (i.e. newly mined bitcoins). The S/F Ratio has historically predicted Bitcoin prices. PlanB invented this metric.
Utilization: Ethereum Hash Rate
Ethereum miners produce an estimated number of hashes per second.
ycharts: Hash rate of the Bitcoin network
TradingView
TradingView is your go-to tool for investment analysis, watch lists, technical analysis, and recommendations from other traders/investors.
Research for a cryptocurrency project
Two key questions every successful project must ask: Q1: What is this project trying to solve? Is it a big problem or minor? Q2: How does this project make money?
Each cryptocurrency:
Check out the white paper.
check out the project's internet presence on github, twitter, and medium.
the transparency of it
Verify the team structure and founders. Verify their LinkedIn profile, academic history, and other qualifications. Search for their names with scam.
Where to purchase and use cryptocurrencies Is it traded on trustworthy exchanges?
From CoinGecko and CoinMarketCap, we may learn about market cap, circulations, and other important data.
The project must solve a problem. Solving a problem is the goal of the founders.
Avoid projects that resemble multi-level marketing or ponzi schemes.
Your use of social media
Use social media carefully or ignore it: Twitter, TradingView, and YouTube
Someone said this before and there are some truth to it. Social media bullish => short.
Your Behavior
Investigate. Spend time. You decide. Worth it!
Only you have the best interest in your financial future.
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Isaiah McCall
3 years ago
Is TikTok slowly destroying a new generation?
It's kids' digital crack
TikTok is a destructive social media platform.
The interface shortens attention spans and dopamine receptors.
TikTok shares more data than other apps.
Seeing an endless stream of dancing teens on my glowing box makes me feel like a Blade Runner extra.
TikTok did in one year what MTV, Hollywood, and Warner Music tried to do in 20 years. TikTok has psychotized the two-thirds of society Aldous Huxley said were hypnotizable.
Millions of people, mostly kids, are addicted to learning a new dance, lip-sync, or prank, and those who best dramatize this collective improvisation get likes, comments, and shares.
TikTok is a great app. So what?
The Commercial Magnifying Glass TikTok made me realize my generation's time was up and the teenage Zoomers were the target.
I told my 14-year-old sister, "Enjoy your time under the commercial magnifying glass."
TikTok sells your every move, gesture, and thought. Data is the new oil. If you tell someone, they'll say, "Yeah, they collect data, but who cares? I have nothing to hide."
It's a George Orwell novel's beginning. Look up Big Brother Award winners to see if TikTok won.
TikTok shares your data more than any other social media app, and where it goes is unclear. TikTok uses third-party trackers to monitor your activity after you leave the app.
Consumers can't see what data is shared or how it will be used. — Genius URL
32.5 percent of Tiktok's users are 10 to 19 and 29.5% are 20 to 29.
TikTok is the greatest digital marketing opportunity in history, and they'll use it to sell you things, track you, and control your thoughts. Any of its users will tell you, "I don't care, I just want to be famous."
TikTok manufactures mental illness
TikTok's effect on dopamine and the brain is absurd. Dopamine controls the brain's pleasure and reward centers. It's like a switch that tells your brain "this feels good, repeat."
Dr. Julie Albright, a digital culture and communication sociologist, said TikTok users are "carried away by dopamine." It's hypnotic, you'll keep watching."
TikTok constantly releases dopamine. A guy on TikTok recently said he didn't like books because they were slow and boring.
The US didn't ban Tiktok.
Biden and Trump agree on bad things. Both agree that TikTok threatens national security and children's mental health.
The Chinese Communist Party owns and operates TikTok, but that's not its only problem.
There’s borderline child porn on TikTok
It's unsafe for children and violated COPPA.
It's also Chinese spyware. I'm not a Trump supporter, but I was glad he wanted TikTok regulated and disappointed when he failed.
Full-on internet censorship is rare outside of China, so banning it may be excessive. US should regulate TikTok more.
We must reject a low-quality present for a high-quality future.
TikTok vs YouTube
People got mad when I wrote about YouTube's death.
They didn't like when I said TikTok was YouTube's first real challenger.
Indeed. TikTok is the fastest-growing social network. In three years, the Chinese social media app TikTok has gained over 1 billion active users. In the first quarter of 2020, it had the most downloads of any app in a single quarter.
TikTok is the perfect social media app in many ways. It's brief and direct.
Can you believe they had a YouTube vs TikTok boxing match? We are doomed as a species.
YouTube hosts my favorite videos. That’s why I use it. That’s why you use it. New users expect more. They want something quicker, more addictive.
TikTok's impact on other social media platforms frustrates me. YouTube copied TikTok to compete.
It's all about short, addictive content.
I'll admit I'm probably wrong about TikTok. My friend says his feed is full of videos about food, cute animals, book recommendations, and hot lesbians.
Whatever.
TikTok makes us bad
TikTok is the opposite of what the Ancient Greeks believed about wisdom.
It encourages people to be fake. It's like a never-ending costume party where everyone competes.
It does not mean that Gen Z is doomed.
They could be the saviors of the world for all I know.
TikTok feels like a step towards Mike Judge's "Idiocracy," where the average person is a pleasure-seeking moron.
Maddie Wang
3 years ago
Easiest and fastest way to test your startup idea!
Here's the fastest way to validate company concepts.
I squandered a year after dropping out of Stanford designing a product nobody wanted.
But today, I’m at 100k!
Differences:
I was designing a consumer product when I dropped out.
I coded MVP, got 1k users, and got YC interview.
Nice, huh?
WRONG!
Still coding and getting users 12 months later
WOULD PEOPLE PAY FOR IT? was the riskiest assumption I hadn't tested.
When asked why I didn't verify payment, I said,
Not-ready products. Now, nobody cares. The website needs work. Include this. Increase usage…
I feared people would say no.
After 1 year of pushing it off, my team told me they were really worried about the Business Model. Then I asked my audience if they'd buy my product.
So?
No, overwhelmingly.
I felt like I wasted a year building a product no one would buy.
Founders Cafe was the opposite.
Before building anything, I requested payment.
40 founders were interviewed.
Then we emailed Stanford, YC, and other top founders, asking them to join our community.
BOOM! 10/12 paid!
Without building anything, in 1 day I validated my startup's riskiest assumption. NOT 1 year.
Asking people to pay is one of the scariest things.
I understand.
I asked Stanford queer women to pay before joining my gay sorority.
I was afraid I'd turn them off or no one would pay.
Gay women, like those founders, were in such excruciating pain that they were willing to pay me upfront to help.
You can ask for payment (before you build) to see if people have the burning pain. Then they'll pay!
Examples from Founders Cafe members:
😮 Using a fake landing page, a college dropout tested a product. Paying! He built it and made $3m!
😮 YC solo founder faked a Powerpoint demo. 5 Enterprise paid LOIs. $1.5m raised, built, and in YC!
😮 A Harvard founder can convert Figma to React. 1 day, 10 customers. Built a tool to automate Figma -> React after manually fulfilling requests. 1m+
Bad example:
😭 Stanford Dropout Spends 1 Year Building Product Without Payment Validation
Some people build for a year and then get paying customers.
What I'm sharing is my experience and what Founders Cafe members have told me about validating startup ideas.
Don't waste a year like I did.
After my first startup failed, I planned to re-enroll at Stanford/work at Facebook.
After people paid, I quit for good.
I've hit $100k!
Hope this inspires you to request upfront payment! It'll change your life
obimy.app
3 years ago
How TikTok helped us grow to 6 million users
This resulted to obimy's new audience.
Hi! obimy's official account. Here, we'll teach app developers and marketers. In 2022, our downloads increased dramatically, so we'll share what we learned.
obimy is what we call a ‘senseger’. It's a new method to communicate digitally. Instead of text, obimy users connect through senses and moods. Feeling playful? Flirt with your partner, pat a pal, or dump water on a classmate. Each feeling is an interactive animation with vibration. It's a wordless app. App Store and Google Play have obimy.
We had 20,000 users in 2022. Two to five thousand of them opened the app monthly. Our DAU metric was 500.
We have 6 million users after 6 months. 500,000 individuals use obimy daily. obimy was the top lifestyle app this week in the U.S.
And TikTok helped.
TikTok fuels obimys' growth. It's why our app exploded. How and what did we learn? Our Head of Marketing, Anastasia Avramenko, knows.
our actions prior to TikTok
We wanted to achieve product-market fit through organic expansion. Quora, Reddit, Facebook Groups, Facebook Ads, Google Ads, Apple Search Ads, and social media activity were tested. Nothing worked. Our CPI was sometimes $4, so unit economics didn't work.
We studied our markets and made audience hypotheses. We promoted our goods and studied our audience through social media quizzes. Our target demographic was Americans in long-distance relationships. I designed quizzes like Test the Strength of Your Relationship to better understand the user base. After each quiz, we encouraged users to download the app to enhance their connection and bridge the distance.
We got 1,000 responses for $50. This helped us comprehend the audience's grief and coping strategies (aka our rivals). I based action items on answers given. If you can't embrace a loved one, use obimy.
We also tried Facebook and Google ads. From the start, we knew it wouldn't work.
We were desperate to discover a free way to get more users.
Our journey to TikTok
TikTok is a great venue for emerging creators. It also helped reach people. Before obimy, my TikTok videos garnered 12 million views without sponsored promotion.
We had to act. TikTok was required.
I wasn't a TikTok user before obimy. Initially, I uploaded promotional content. Call-to-actions appear strange next to dancing challenges and my money don't jiggle jiggle. I learned TikTok. Watch TikTok for an hour was on my to-do list. What a dream job!
Our most popular movies presented the app alongside text outlining what it does. We started promoting them in Europe and the U.S. and got a 16% CTR and $1 CPI, an improvement over our previous efforts.
Somehow, we were expanding. So we came up with new hypotheses, calls to action, and content.
Four months passed, yet we saw no organic growth.
Russia attacked Ukraine.
Our app aimed to be helpful. For now, we're focusing on our Ukrainian audience. I posted sloppy TikToks illustrating how obimy can help during shelling or air raids.
In two hours, Kostia sent me our visitor count. Our servers crashed.
Initially, we had several thousand daily users. Over 200,000 users joined obimy in a week. They posted obimy videos on TikTok, drawing additional users. We've also resumed U.S. video promotion.
We gained 2,000,000 new members with less than $100 in ads, primarily in the U.S. and U.K.
TikTok helped.
The figures
We were confident we'd chosen the ideal tool for organic growth.
Over 45 million people have viewed our own videos plus a ton of user-generated content with the hashtag #obimy.
About 375 thousand people have liked all of our individual videos.
The number of downloads and the virality of videos are directly correlated.
Where are we now?
TikTok fuels our organic growth. We post 56 videos every week and pay to promote viral content.
We use UGC and influencers. We worked with Universal Music Italy on Eurovision. They offered to promote us through their million-follower TikTok influencers. We thought their followers would improve our audience, but it didn't matter. Integration didn't help us. Users that share obimy videos with their followers can reach several million views, which affects our download rate.
After the dust settled, we determined our key audience was 13-18-year-olds. They want to express themselves, but it's sometimes difficult. We're searching for methods to better engage with our users. We opened a Discord server to discuss anime and video games and gather app and content feedback.
TikTok helps us test product updates and hypotheses. Example: I once thought we might raise MAU by prompting users to add strangers as friends. Instead of asking our team to construct it, I made a TikTok urging users to share invite URLs. Users share links under every video we upload, embracing people worldwide.
Key lessons
Don't direct-sell. TikTok isn't for Instagram, Facebook, or YouTube promo videos. Conventional advertisements don't fit. Most users will swipe up and watch humorous doggos.
More product videos are better. Finally. So what?
Encourage interaction. Tagging friends in comments or making videos with the app promotes it more than any marketing spend.
Be odd and risqué. A user mistakenly sent a French kiss to their mom in one of our most popular videos.
TikTok helps test hypotheses and build your user base. It also helps develop apps. In our upcoming blog, we'll guide you through obimy's design revisions based on TikTok. Follow us on Twitter, Instagram, and TikTok.