Pickle Cap

Fixed income focused trader.

[Pickle Cap @pickle_cap]

Nostalgic seeing the Fed Funds curve 99.90 or higher all the way out.

[Pickle Cap @pickle_cap]

@Polymarket There's still time

[Pickle Cap @pickle_cap]

Who's selling the hats? $btc $100k

[Clouted @CloutedMind]

I dont usually share deep defi thoughts in a bull market cause theres too much noise but ill share this 👇

I believe Ethena just changed the entire dynamic of our crypto cycle

sUSDe makes extremely high yield from a basis trade on the funding rate of futures, it is a great structured product wrapped up in the form of a yield bearing stablecoin

up until now it was mostly just another product, but since AAVE has added sUSDe as collateral, and most likely many other major defi platforms follow suit... this changes much more than many realize

sUSDe enabled as collateral now creates another broad basis trade with every other stablecoin USDT/USDC/DAI etc

the broader basis trade is that you can now deposit sUSDe (which is earning lets say 30% for this example) and borrow USDC/USDT/DAI/xxxstable for a rate of 10%pa (for example) and sell it for sUSDe, making a 20% basis trade...

what this means is that this arb will eventually close, people will contintually borrow stables at lower than sUSDe rate and sell it for sUSDe .. on leverage

the borrow demand on these stables will send the borrow rates so high that it basically gets to the same as what native sUSDe is paying, since that is when there is no more basis trade to profit on

that means that at scale as this broader trade plays out you can expect lending yield on every other major stablecoin to increase to about what sUSDe is paying

what are some high level impacts of this?

1. you can hold normal stables and lend them for almost the same rate as you would get using Ethena, but only be exposed to USDC and AAVE risk while doing it
2. the cost of spot leverage this cycle will be much higher than any other cycle, leading to either more mass liquidations or less spot leverage
3. sUSDe is now inherently leveraged, increasing both risk and impact of depeg

also take into account as the bullrun progresses, perp funding rates will skyrocket and consequently so will native sUSDe yeild, meaning this broader trade could very potentially see stables having lending yields of well >50%pa while crypto is booming

now it will take time for this broader trade to play out as sUSDe supply is still small compared to the rest of stables however, as this trade is lucrative, you can expect a massive increase in sUSDe supply and thus the broader trade closing the arb on all other stables accelerating

what do i think potential results of this are?

1. sUSDe has slightly higher risk of depegs due to the leverage on sUSDe
2. spot leverage markets on ETH have 2 impacts, firstly more liquidations as debt starts mooning, secondly maybe less appetite on overall spot leverage on ETH
3. to expand on that second point, this could mute our bullrun a little, as spot leverage is best jet fuel on underlying majors both locking up tokens and adding leverage
5. this one is a big one... as tradfi yields go down this year, there will be an even bigger arb between offchain yield and onchain yield, which could cause a massive flow of capital into onchain stables as every stablecoin will have very high yield due to the basis trade, this is overall extremely bullish for our industry
4. makes me extremely bullish on Ethena overall (ofcourse accounting for risks)
5. do people buy risk assets or leverage farm a basis trade? does this mute our bullrun a little or throw fuel on it? i have to think more on everything

either way im very excited about how this plays out and the opportunities that come from it

disclaimer: i have no financial investment in ENA or sUSDe, i literally sold my airdrop rip, this is not a paid post, this is not an endorsement (other than i think its a banger product)

clouted

[Pickle Cap @pickle_cap]

🤣🤣

[Coin Bureau @coinbureau]

They're called "shitcoins" for a reason

[Pickle Cap @pickle_cap]

Definitely worth thinking about heading into 2024.

[Alvin Foo @alvinfoo]

“ In Washington DC, at a Metro Station, on a cold January morning in 2007, a man with a violin played six Bach pieces for about 45 minutes. During that time, approximately 2000 people went through the station, most of them on their way to work.

After about four minutes, a middle-aged man noticed that there was a musician playing. He slowed his pace and stopped for a few seconds, and then he hurried on to meet his schedule.

About four minutes later, the violinist received his first dollar. A woman threw money in the hat and, without stopping, continued to walk.

At six minutes, a young man leaned against the wall to listen to him, then looked at his watch and started to walk again.

At ten minutes, a three-year old boy stopped, but his mother tugged him along hurriedly. The kid stopped to look at the violinist again, but the mother pushed hard and the child continued to walk, turning his head the whole time. This action was repeated by several other children, but every parent - without exception - forced their children to move on quickly.

At forty-five minutes: The musician played continuously. Only six people stopped and listened for a short while. About twenty gave money but continued to walk at their normal pace. The man collected a total of $32.

After one hour:
He finished playing and silence took over. No one noticed and no one applauded. There was no recognition at all.

No one knew this, but the violinist was Joshua Bell, one of the greatest musicians in the world. He played one of the most intricate pieces ever written, with a violin worth $3.5 million dollars. Two days before, Joshua Bell sold-out a theater in Boston where the seats averaged $100 each to sit and listen to him play the same music.

This is a true story. Joshua Bell, playing incognito in the D.C. Metro Station, was organized by the Washington Post as part of a social experiment about perception, taste and people’s priorities.

This experiment raised several questions:
In a common-place environment, at an inappropriate hour, do we perceive beauty?

If so, do we stop to appreciate it?
Do we recognize talent in an unexpected context?

One possible conclusion reached from this experiment could be this:
If we do not have a moment to stop and listen to one of the best musicians in the world, playing some of the finest music ever written, with one of the most beautiful instruments ever made…
How many other things are we missing as we rush through life?”

[NHL @NHL]

The @NHLBlackhawks will select first overall in the 2023 #NHLDraft.

[Pickle Cap @pickle_cap]

@bmiller22 @acllc2 You have to wonder who was stuck and used a major get out of jail free card?

[Pickle Cap @pickle_cap]

The end is here. What a ride.

[Pickle Cap @pickle_cap]

CME Group proposes April 14, 2023 conversion date for Eurodollars that expire after June 30, 2023 to SOFR

[Latest in space @latestinspace]

NEWS🚨: NASA has built a Mars simulation room where volunteers will live for a year to test mental health in long isolation

Begins this summer

[Pickle Cap @pickle_cap]

@choffstein @DeadCaitBounce Dont forget some of the best scuba in the world. Boat rides are very short to most.

[Pickle Cap @pickle_cap]

@choffstein @TheStalwart @DanRusso_CMT

[Pickle Cap @pickle_cap]

@ZR1Trader More bullish Monero? Seems like they are fully after the entire crypto space at this point.

[Pickle Cap @pickle_cap]

@Mfrancis43 Well that was quick 🤣

[Pickle Cap @pickle_cap]

@Mfrancis43 What if not going along with the next lockdown/mandate/new thing at some point results in locked accounts? Nice to have another way and maybe keeps tptb in check.

[Pickle Cap @pickle_cap]

@Mfrancis43 https://t.co/hxXRanmoNM

[6529 @punk6529]

1/ There are no other constitutional rights in substance without freedom to transact

Being meaning to write this for 6 months, but the Canadian response to the trucker protests is illustrating this so vividly, that today is the day.

[Pickle Cap @pickle_cap]

One for the history books today.

[Pickle Cap @pickle_cap]

It is such a shame that fed fund options died during zirp.

[Pickle Cap @pickle_cap]

@bmiller22 @1_lot_hero 🍿 for breakfast?

[Pickle Cap @pickle_cap]

Coinbase has paused USD<->USDC convertibility. Known that Circle had cash at SVB. Place your bets.