I actually have a lot of stuff to talk about right about that has nothing to do with FOMO or FUD or stable-coins or crashing markets or doubling curves or market cycles or... but the market just keeps being crazy and volatile so it's hard to focus on things that actually matter.
It's always hilarious when I link back to posts that have evergreen content mixed with the speculation of the day. Half because my speculation is always wrong, and the other half because the speculation is totally worthless 2 years later and the evergreen content is still totally valid.
And now... for more speculation!
https://leofinance.io/@edicted/market-watch-bottom-barrel-support-levels
We are testing our bottom of the barrel support levels!
Thirteen days ago I gave support levels that we all need to lookout for. They are upon us much sooner than I'm comfortable with, but that's how crypto works so whatever.
- Hive has support from 50-80 cents.
- Ethereum has support from $2000-$2500.
- BNB has support from $250-$300.
- RUNE has support from $3.50-$4.
- Monero has support from $125-$150.
- ETC ETC.
Looks like all those death-crosses are playing out predictably.
Hive already flash-crashed to 45 cents and we are now grinding on that hardcore 50 cent support line. ETH is at $2,360 which is also within the range given. BNB just spiked back up to $300 after being at $270 so again that support seems to be playing out well. Rune is at $3.70... another amazing opportunity to buy and I'm once again short on stables. Surprisingly Monero is out-pre forming at $168 and is still above the hardcore support level.
LUNA REKT
I saw Luna sub $1 today. UST was trading at 34 cents; pure insanity. Essentially a 99% loss in a matter of days. So brutal. Glad I didn't own any but at this point I feel bad for the people who did. That's like a full 2-year crypto-winter's worth of losses in a single day. Pretty insane.
That being said they kind of deserved it. Everyone knew that a debt ratio higher than 100% was a really stupid idea. Everyone saw how LUNA climbed the market cap and no one questioned it. Infinite greed is infinite. This is what you get.
That's the thing about algo stable coins. Crypto is already totally unstable and volatile. By linking a stable coin to crypto collateral, that makes the collateral even more unstable and volatile in both directions. Yikes. There's got to be a better way!
How do we make less volatile assets?
The answer is and always has been and always will be: ELASTICITY. The ability for a market to expand and contract based on supply and demand is the mainstay of currency, and so far not a single crypto seems to understand this. There isn't a single cryptocurrency developer out there who's been like, "You know what? We need the price to go down right now, this market is overbought and we need to stabilize it." Nope, we never ever ever see that. It's always MOAR MOAR MOAR infinite greed lets see how high we can pump this thing. How's that working out thus far?
How can we achieve elasticity?
Well, how does the FED do it? They tighten policy when they need to bring the market down and they loosen it when they need to pump it back up. The way they do things is archaic and absurd. Crypto has so many more options, and none of them are being explored.
I've spoken a bit about this.
In it's most basic form: if we want to increase demand of an asset we can increase yield. This is akin to lowering interest rates, because crypto and fiat are opposites. Lowering interest rates is basically the same thing as increasing yields, because in crypto the user is actually the central bank. Want people to buy and hold your stable coin?
Then you need to INCREASE the yield that people get for holding the stable coin. But oh wait, LUNA/TERRA can't do that because they already had a ridiculously high static yield of 20%. Obviously during the good times they should have been reducing that 20% to as low as 1%-5%. If they were at say 3% rates right now they could jack up yields to 20%-30% right now to try and get people to buy into the system when they need it them most. Instead they are totally overblown with no more runway. Idiots.
Again, this is counterintuitive.
The idea that we need to increase inflation to increase the price and reduce inflation to reduce the price is the thing that nobody seems to understand. That's probably why no one is doing this correctly yet, because it's very hard to wrap our brains around the delayed reaction of economy over time.
What else?
The main way to stabilize the value of an asset is for products and services to actually be bought and sold in the currency. That's more of a long term goal and we can't really make that happen except by waiting for the infrastructure and vendors to appear. This will take a while, but if the market is oversold when this becomes more of a thing it will be very easy to go long.
Employees.
Another 'easy' way to stabilize a currency is for users to be paid a living wage for their work. Hive kinda does this with the whole blogging thing, and the top earners like myself make a good chunk of money, but the rewards are very subjective. We need more non-subjective jobs but this is a very difficult thing to achieve. More on this some other time.
20% on HBD
Do I think the 20% yield on HBD is stupid? No, not really. There's less than 10M HBD in circulation. Check out this cool site by @ausbitbank
https://hive.ausbit.dev/hbd
Hive basically needs to crash another 70% for the HBD haircut to even come into affect. Compared to UST, our debt ratio is very healthy, and Hive is comically oversold at the rank #200 level on the market cap. It makes sense that we would continue offering 20% during these hard times. With UST crashing into the dirt we might be able to pick up a little adoption. This is especially true with people like @khaleelkazi running around creating a liquidity pool on Polygon with the pHBD/USDC wrapped solution. Pretty cool.
But should the debt ratio start going up and if Hive did something like a 10x, then yes, the interest rate should be reduced to promote selling and conversions to create elasticity and stability for the network. Talk to me at $5 Hive and I'll change my tune.
Conclusion
The market is in a great spot right now. It's possible (however improbable) that crypto will outperform the market during a recession because crypto is already oversold before the recession happened. More likely we get another flash-crash and then we outperform the market, but whatever. Crypto is going to win out eventually just like it always does. I'm not worried.
However, the real issue is elasticity and stability. We need to be coming up with more innovative ways to make people feel safe in a escalating climate of uncertainty. That's the secret sauce that will pump crypto to the moon. Ironically pumping crypto to the moon is exactly what we don't want for stability, so the real issue is dealing with greed and lowing the price and yields back down to the ground when they get too high. Easier said than done I'm afraid.
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market in one pic
Yeah Dai rock stable, none tucks anything with 100$ per transaction in fees, it's a great protection layer vs wave formed dips.
Such stressful market conditions. In a way it's like when a big player like Enron or other large failures in the stock market and the fear and ripples goes through the entire market.
I also feel a lot of empathy for the Luna holders, especially their dedicated community.
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I don't know much about the Luna community or projects, but from what I am reading it looks like they are toast. I wonder how we could pick up some of those broken pieces and bring them here. Seems like a great time to release HAF for migrating projects if I understand everything correctly.
I love it that you are thinking about that. It really hadn't occurred to me, but excellent I wish we were better at capitalizing on opportunities.
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Now that the shadow ban may have been lifted on Twitter, it might allow us to get the word out as opposed to constantly screaming inside our own echo chamber.
Twitter isn't the only way to get the word out, though it's quite effective. Even word of mouth can be powerful 🙌 Honestly, I think we need to also focus on encouraging more engagement (the right kind, not comment farming). When Hive becomes alive with conversation, that will make the difference between being a blog focused site to being an all inclusive site. Blogging is popular, but definitely not something that the masses do well, or would even want to do consistently. Chatting, interacting, reading, those are things most people do for many hours a day.
Another facet of course is games, and I must say Hive is doing amazing in that area ♥️
In most markets, this is where the shorters come in - they see an anomaly and short.
Why doyou suppose the shorters didn't bring down the LUNA price to more realistic levels before now?
"The Shorters"?
Are they all working together in harmony to get max gains and then profit share after the deed is done?
Sharks in the water do indeed smell blood.
20% yield mathematically is unsustainable unless you run a ponzi with massive user growth to channel in new money. Even so at some point it has to stop, or devalue against other assets, thus lowering the real return to a number that is more in line with the market
Yeah I bet that sounds totally correct until we take into account that Bitcoin has been making 100% gains year over year since 2013. And before 2013 it performed even better than that. Obviously 20% is completely sustainable given the correct incentives, and the yield that was offered by UST had absolutely nothing to do with the crash.
MakerDAO does this thing where they give DAI as loan in exchange for staking ETH and other tokens. Isn't that a similar pattern Luna's taking or was taking? Read somewhere that their goal was to kick MarkerDAO in the ass or something like that.
I don't entirely understand a lot about their promised APR and how that doesn't work out in their favour.
Does this mean that all this is a possible correction rather than an outright crash? Or just a little bit of both. I'm trying really hard to understand (in simple terms) why all this is happening but I don't get it.
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MakerDAO and DAI are a little different because ETH collateral gets liquidated at 150%.
DAI has a lot more buffer and uses multiple tokens to collateralize. DAI also has nuclear option cutoff switches and can print Maker to pay off bad debt. In comparison, UST was very basic and prone to attack.
Okay. That makes sense. DAI has a lot more backup than UST. I read recently that Travala started accepting Payments in UST, so how's that gonna work out?
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This is the first time I have bought Luna. I paid just over $2. I had a small amount of other crypto that I just sold on kucoin. At least I can say I have Luna in my Portfolio !
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Thanks for clarify these. 20% HBD is not stupid and I think so.
I actually gave it a try trading Luna and I got 100% in like 5 min.... wow
haha amazing
That's what the edit button is there for!
Hive has been incentivising low quality, throwaway content for too long.
We talk shit, get instantly rewarded and never think about what we said again.
But the real money is in long term, evergreen content that drives ongoing traffic.
Something I'm excited that the LeoFinance front-end seems to have realised.
Once the ad money integration (just the start of what's possible) is completed, optimising your evergreen content should be even more important for you as someone staking LEO.
You're now financially incentivised to think about driving long term traffic to your blog and not just create the throw away.
Over the long term, not only will doing this increase the value of your LEO stake, but also the value of your future payouts.
Win/win!
For your blog going forward, are you somewhat thinking along these lines?
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Sometimes I stumble onto your posts and think, what the ...
But today I strolled through here and actually saw some good sense into your post.
Thanks man.
Your link to @ausbitbank's website was very handy.
Your content has been voted as a part of Encouragement program. Keep up the good work!
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Buying and selling in the currency has proven to help stabilize an asset and its almost impossible for such activity not to go on, it just have to step... There should be more of the activity.
This should work really and Hive has paid me so much even though it's just little compared to those at the higher ups... The circulation is great!
More innovations are coming for sure... People are thinking! 😅
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There's alot of bear market. Just that the introduction of this HBD 20% will really help to tackle this bear market.
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I think there will always be some volatility. You can program elasticity all you want, but unless you tweak it on a daily basis like Google does its algorithms, you're not going to get a perfect currency. As smart as the Fed is about monetary policy, we still have periods of high unemployment, high inflation, and recessions. That said, I do agree that stability and elasticity are two values that make sense for programming money in a way that might induce more adoption.
I didn't own Luna, so I feel relieved that we can learn from their mistakes. It is sad and regretable, but it had to happen to someone for the community to know debt backed currencies are a serious topic...
lol...I don't have the heart for making predictions. In all this, am just observing, thanking for the nature of investments I have in the space and taking the lessons from this dip as they come
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I'm pretty much on the "done" side of trying to make predictions because it seems my crystal ball has a nasty big crack in it.
I expect a great deal of the challenge with this entire ball of wax is going to be the overall shift from a "scarcity mindset" to an "abundance mindset." How do you "value" something in an open marketplace if there's always "plenty more where THAT came from?"
If everybody has access to huge piles of gold, why would gold have any "value?" (Just playing devil's advocate, here!)
I love the "Star Trek Universe" model in which everyone has what they need and has access to whatever they want... but what is never covered is the process of moving from the legacy model to the new model.
It'll be interesting to watch unfold, to be sure!
=^..^=
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According to BitBoy Luna did an OTC USDT sale to Blackrock at night and they instantly pulled the rug. Citadel cashed in and congress pushed the news. If that‘s about to confirm, it‘s wild!
so the real issue is dealing with greed and lowing the price and yields back down to the ground when they get too high. Easier said than done I'm afraid. — a tough mountain to climb indeed .
A fixed money supply is not a good monetary rule and efforts to move toward more elastic supplies should be welcomed. But those efforts would also be well-served by careful consideration of how the supply should respond to various shocks.
Very intresting
The market value spiraling down like this is so discouraging!🥺
I really hope we bounce back soon enough. 😔
There is always a rise after a crash!
In any case, bitcoin. I think so.
I hope that the coin of our favorite site HIVE will be restored!
Success!
Hello from Ukraine! Best wishes!💙💛
You legit sound like some economics professor trying to pretend to understand crypto.
All economies depend on stability.
All business models depend on stability.
All people depend on stability.
But you've somehow convinced yourself that you're super smart idea is to ignore all of that.
Uh huh, sure.
Clearly you lack an abundance mindset required to understand where this is going.
You have all this game theory and zero success to show for it.
Think about that for a tick.
Are you manic right now?
I can't even understand what you are implying.
Do you have a better unit of account?
No, you don't.
Higher and higher valuations is not the problem.
The problem is volatility.
We can also model the currencies of the future to go up slowly over time.
But now with yields it makes more sense to just manipulate the yields.