jalah

I buy too late

[jalah @jalah___]

Suppose you sell by accident all your bitcoins. Would you repurchase them at current price ?

[jalah @jalah___]

@packlesshepherd @CoarseDotInk Great, but pllease make the UI readable! Avoid brown small letters on a black background.

[jalah @jalah___]

@koolkrypto223 @ryskfinance remember LP Hegic late 2020 when the ETH price went from 400 to 4000. Selling options is not no or low risk.

[jalah @jalah___]

@B_Eichengreen 𝐓𝐡𝐞𝐢𝐫 𝐝𝐢𝐬𝐜𝐥𝐨𝐬𝐞𝐝 𝐚𝐬𝐬𝐞𝐭𝐬 =/ 𝐚𝐥𝐥 𝐜𝐨𝐫𝐩𝐨𝐫𝐚𝐭𝐞 𝐚𝐬𝐬𝐞𝐭𝐬
https://t.co/IQJIcIHIwa

[Joseph @JosephA140]

I spent 100’s of hours writing research on tether for @Citi.

@CryptoHayes missed a few key points.

1) 𝐓𝐡𝐞𝐢𝐫 𝐝𝐢𝐬𝐜𝐥𝐨𝐬𝐞𝐝 𝐚𝐬𝐬𝐞𝐭𝐬 =/ 𝐚𝐥𝐥 𝐜𝐨𝐫𝐩𝐨𝐫𝐚𝐭𝐞 𝐚𝐬𝐬𝐞𝐭𝐬

When tether generates $ they have a separate equity balance sheet which they don’t report publicly. The numbers they disclose are under a ‘matching’ philosophy; they’re just showing you how their reserves are backed.

The equity balance is sheet is made up of equity investments, mining operations, corporate reserves & possibly more BTC, with the rest distributed as dividends to shareholders.

2) 𝐓𝐡𝐞𝐲’𝐫𝐞 𝐡𝐢𝐠𝐡𝐥𝐲 𝐩𝐫𝐨𝐟𝐢𝐭𝐚𝐛𝐥𝐞 𝐚𝐧𝐝 𝐭𝐡𝐞𝐢𝐫 𝐞𝐪𝐮𝐢𝐭𝐲 𝐢𝐬 𝐯𝐚𝐥𝐮𝐚𝐛𝐥𝐞. 𝐓𝐡𝐞𝐲 𝐜𝐚𝐧 𝐬𝐞𝐥𝐥 𝐞𝐪𝐮𝐢𝐭𝐲 𝐭𝐨 𝐜𝐨𝐯𝐞𝐫 𝐚𝐧𝐲 𝐠𝐚𝐩𝐬 𝐢𝐧 𝐭𝐡𝐞𝐢𝐫 𝐛𝐚𝐥𝐚𝐧𝐜𝐞 𝐬𝐡𝐞𝐞𝐭.

Tether has ~$120bn in interest yielding treasuries which have been yielding ~4% since 2023. That’s ~$10bn in liquid PnL with little cost (150 employees), making it one of the most efficient cash generating businesses in the world.

I’m guessing this would make their equity worth somewhere in the $50-100bn range. Although they’ve reported they’re looking to raise $20bn for 3% which would put them at ~$500bn+ valuation. Probably won’t materialise, and likely overvalued, but still highly valuable equity.

3) 𝐁𝐚𝐧𝐤𝐬 𝐨𝐩𝐞𝐫𝐚𝐭𝐞 𝐨𝐧 𝐬𝐢𝐠𝐧𝐢𝐟𝐢𝐜𝐚𝐧𝐭𝐥𝐲 𝐥𝐨𝐰𝐞𝐫 𝐟𝐫𝐚𝐜𝐭𝐢𝐨𝐧𝐚𝐥 𝐫𝐞𝐬𝐞𝐫𝐯𝐞𝐬. 𝟓-𝟏𝟓% 𝐨𝐟 𝐛𝐚𝐧𝐤 𝐝𝐞𝐩𝐨𝐬𝐢𝐭𝐬 𝐚𝐫𝐞 𝐡𝐞𝐥𝐝 𝐢𝐧 𝐥𝐢𝐪𝐮𝐢𝐝 𝐚𝐬𝐬𝐞𝐭𝐬, 𝐭𝐡𝐞 𝐨𝐭𝐡𝐞𝐫 𝟖𝟓%+ 𝐚𝐫𝐞 𝐡𝐞𝐥𝐝 𝐢𝐧 𝐬𝐢𝐠𝐧𝐢𝐟𝐢𝐜𝐚𝐧𝐭𝐥𝐲 𝐦𝐨𝐫𝐞 𝐢𝐥𝐥𝐢𝐪𝐮𝐢𝐝 𝐚𝐬𝐬𝐞𝐭𝐬.

Tether is different but holds similar qualities to a Bank in this regard, and is significantly better collateralised. A key difference is banks are backed by Lender of last resort (Central Bank) but Tether is not.

TLDR: Tether isn’t going insolvent, quite the opposite; they own a money printing machine.

[𝕋𝕖𝕞𝕞𝕪🦇🔊 @Only1temmy]

https://t.co/JuEropsTm3

[jalah @jalah___]

@xydotdot Reminds me why Compound lost its users years ago.

[jalah @jalah___]

I think this one cracks the private payment problem with huge liquidity day one, without token incentives. And no complex zk tech to obfuscate transfers.

[Merkl @merkl_xyz]

Sending tokens onchain leaves a trace.

Every transaction is public. Anyone can see which wallet sent what to whom.

Merkl Pay changes that 🔒

[jalah @jalah___]

@thecurious_gark @SteakhouseFi @Morpho I think the UI is the strategic asset in Defi. For the moment the infra is free, but will be interesting to see what happens after the fee switch.
https://t.co/rxKCk8VoEJ

[jalah @jalah___]

Who owns Morpho users?

2y ago I stressed that monetizing infras is hard. Charge significant fee rates above curator fees and:
(i) users migrate
(ii) curators fork Morpho infra (possible by the end of the year) + launch their own UI.

Now (ii) is becoming real. New UIs are attracting users:
- Gauntlet https://t.co/UwRS3S9aER
- RE7 https://t.co/jiz9rCvzNn
- Oku https://t.co/ApTHTgWGUU
- Moonwell https://t.co/ubrdkRdLFc on Base
- Felix & Hyperbeat https://t.co/euSOCG7GHD / https://t.co/CynQTds8Lx on HyperEVM
- Aggregators like https://t.co/7Dj3RE2ZJW

As vaults expand on alt front-ends, curators could eventually route through their own infra and bypass Morpho fees.

[jalah @jalah___]

Impressed by @SteakhouseFi's own app and innovative vault's contract.
Yet a bit worried at the same time by the ability of @Morpho to retain long-term its curators within its ecosystem, as they start launching their proprietary vaults in their own UI.

[jalah @jalah___]

@Lab312_ @Get_Waltio I think this one is more a guess than a checked fact:
> Une faille via l'inscription Google permettait d'accéder à l'interface Waltio de n'importe quel client si on connaissait son email Gmail

[jalah @jalah___]

Interesting case of regulatory capture. When the main borrower also controls governance allowing him to change ex post the terms of the market.

[PaperImperium @ImperiumPaper]

As was foretold 🔮

As depositor flight continues faster than naive or risk-seeking new money can be found, keeping utilization at 100%, this gem of a proposal was just dropped on the forum.

Proposal is:

1) incentivize a Curve pool for stUSDS and USDS so depositors can sell at a discount even when withdrawals are unavailable

2) set up markets where stUSDS is collateral

3) lower liquidation LTV to 120% from 145%

Number 2 is not a serious solution (stUSDS is solely backed by SKY, so why not just lend against SKY directly where the parameters are not controlled by the biggest borrower in the stUSDS market?)

Number 1 makes some sense, and is probably worth a try. But buyers of distressed debt tend to be amongst the most sophisticated in credit - they have to be or they go out of business. So I’m not sure who would want to buy stUSDS at anything less than a major, major discount.

I’m not sure that would help trapped stUSDS holders, but maybe there’s a market to be made here, as long as the prices can float.

Of course, Number 3 is what makes stUSDS uninvestable.

Here we see the largest borrower, owing ~$62m across four vaults, about to push the liquidation threshold down to 120% from 145%.

Who could have predicted such an outcome, where lenders, already trapped, now get more risk shoveled on top of them?

Lenders who aped into this without diligence are now illiquid, getting less collateral buffer, getting a new rate model, and all parameters controlled by the borrower who makes up 2/3 of the market.

It’s hard to have much sympathy for either the borrowers who are being squeezed by 28% interest or the lenders who are stranded.

However, it can always get worse for lenders. There is nothing other than reputational damage to prevent the yield dropping to 0%, LTV to infinity, and no clear recourse.

[jalah @jalah___]

@Louis_Tellier @aave Argent wallet has given one-tap access to Aave yield since early 2020 + on-ramp facility, but never took off.

[jalah @jalah___]

@SebVentures interesting, how to be sure you won't be the first to withdraw liquidity if things go wrong?

[jalah @jalah___]

@DefiIgnas As only a few DAOs are actually decentralized, I prefer immutable contracts (and possibly centralized curation on top), to the theater of DAOs.

[jalah @jalah___]

@omeragoldberg the efficient frontier graph reproducing the elliptical shape of Markowitz is here a total nonsense for those with a basic understanding of financial theory.

[jalah @jalah___]

@antonttc great addition!

[jalah @jalah___]

@WazzCrypto Could you explain how hard-coded price change the total loss ? To me, it just redistributes a higher share of the loss to lenders stuck in the vaults.

[jalah @jalah___]

@charliemktplace @MorphoLabs You're right, but I'm not saying otherwise. My goal wasn’t to point fingers at curators here.

[jalah @jalah___]

🚨 Morpho Arbitrum xUSD–USDC market update

After today’s Balancer hack, xUSD lost its peg, currently trading around $1.08.

But here’s the twist: in the Morpho market, the liquidation price is hard-coded at $1.26.

Let’s unpack why that’s a problem 🧵

[jalah @jalah___]

See my post for a more technical analysis
📖 https://t.co/HjGrQt3Zx1

[jalah @jalah___]

The longer and the larger the depeg, the higher the loss borne by the protocol (currently 770k).

Even if the price repegs eventually, some positions may create bad debt due to accumulated interest rate unmatched by collateral in positions which couldn't be liquidated during the depeg episode.