traders_guild

A community of Funds, Founders and Allocators.

[traders_guild @traders_guild]

Deeply honored to have participated in the Institutional Adoption in Crypto panel in the UAE with @LTP_primebroker , @BitcoinSuisseAG , @dYdX , and @traders_guild during Token2049 - Dubai.

[Krugman @krugman87]

Here's my nuanced view of Bitmines 9.5% yielding Series A offering, and what Lee would need to do to keep this out of the "ponzi-zone".

With the ethereum:native staking yield around 2.5-3%, if Lee is able to ensure that they don't sell more than 25-35% of the Series A compared to the size of their staked ETH, they could cover the entire amount of series A dividends with staking yield. This by definition keeps it out of the ponzi-zone and the allows ETH to become the *true* digital capital instrument that Saylor can only dream of but never achieve with BTC because BTC doesn't generate a yield.

Now, there are a number of caveat's to this. Firstly, $BMNR holders were under the assumption that staking yield would accrue to their equity (i.e. tokens per share), but in this case the yield is diverted to the Series A holders. Kind of a rug pull on the common shareholders if you ask me.

Secondly, for this not to enter the ponzi-zone (i.e. covering dividend payments with cash from previous buyers) Lee would need to ensure this never grows bigger than the staking yield could cover. That means capping the series A market cap at maybe 15-20% of their staked ETH (they need a buffer which I'll get into below). Otherwise this runs the risk of ballooning so large that Lee needs to begin covering dividend payments with cash on hand and diluting common stock shareholders, which is just a slow motion trainwreck as we're seeing with Strategy.

Thirdly, there's a risk that Lee can't control which is the price of ETH dropping rapidly and sustainedly. Even if Lee capped the Series A at 25% of staked ETH, if ETH price plummeted 50% (not uncommon), then the series A is now 50% of the staked ETH, and now were in the ponzi-zone. The point is that the dividend payments are fixed in dollar terms, but the underlying asset is not, which is one of the largest risks of this type of financial engineering of DATs.

Fourthly, we recently saw a proposal for ETH staking yield to be reduced significantly. This is yet another risk out of Lee's control that should be accounted for.

Final comments:
There are some interesting potentials with this that don't require Lee/Bitmine to go full blown ponzi and blow up BMNR & ETH in the process. That makes Lee (and the Bitmine board) the central points of risk as they decide which direction this goes (i.e. sustainable digital capital or ponzi-zone).

I think it's too early to go full doomer on this, even in like of what's going on with Strategy/BTC right now.

[Capital Flows @Globalflows]

You wanted a global reserve asset that acts like digital gold, well, now the globe is dumping on you

Thanks for playing

[Goshawk Trades @GoshawkTrades]

a crypto quant fund CIO on why their short book is constructed completely differently from their long book:

"on the short side, we call it fuckery risk."

"there is just a ton of fuckery in our asset class. teams trying to crime their tokens up. market makers trying to crime tokens up for short periods. squeezes from perpetual futures funding rate dynamics."

"we think heavily about what is the probability that there's going to be fuckery in this, and we try and stay away from that stuff as much as possible. even if the momentum is really negative."

"whereas we're more willing to be concentrated in our longs, we are less willing to be concentrated in our shorts."

the short side can look like free money on paper in lower caps. in practice, the tail risk from manipulation, squeezes, and coordinated pumps is brutal.

[traders_guild @traders_guild]

@cmsholdings He's the only korean underwater.

[Ryan Selkis (Solomon) 👤 @Selkis_2028]

Feel like I wasted a decade of my career and an industry with potential and high hopes became a decrepit and ineffective life boat right before we really needed it to work.

The resolution of the crypto experiment.

[cryptohuntz @cryptohuntz]

back of napkin math

3m shares x $100 = $300m mkt cap.

9.5% on $300m is $28.5m in dividend pmts annually.

they have $7 bn eth staked earning ~2.5% = ~$175m in annual yield generated

thats 6+ yrs of dividend coverage assuming $eth price stays unchanged

someone plz correct me if i missed something

totally different product than $strc and $mstr

[Apyx @apyx_fi]

https://t.co/QBk50yAQPk

[G | Ethena @gdog97_]

Excited to partner with Coinbase for the first time to support their dollar savings products. The upcoming integration next week will be the first time Ethena products are available for their 100m+ user base.

Given the evolving nature of the Clarity Act, we expect further potential tailwinds for onchain native products like USDe from idle balances on exchanges, and Ethena is well positioned to support this transition.

[Polymarket @Polymarket]

NEW: Visa, Mastercard, Stripe, & Coinbase are reportedly partnering on a new stablecoin platform.

[Mike Dudas @mdudas]

“Neel Somani… advised @solayer_labs co-founder Rachel Chu on how to sell tokens/equity on secondary markets before and around the time of Solayer's TGE.”

We diligenced this deal at seed, and I remember the team being 10x more focused on the token than the product *prelaunch*…

[unusual_whales @unusual_whales]

BREAKING: "House votes to halt Iran war," per POLITICO

[Andrew Kuhn @FocusedCompound]

Finally got my hands on the sell-side analysis that explains why SpaceX is worth $1.75 trillion

[Open Source Intel @Osint613]

Trump on Mamdani:

I would be better than him if I wanted to go with that route. Ladies and gentlemen, you will no longer pay rent. You no longer have to pay interest on your mortgage, and no longer gonna have to pay for food. I'm gonna give you free food

[Peter Schiff @PeterSchiff]

$STRC is down to $94.85, putting the current yield at 12.12%. The lower the price falls, the higher $MSTR will have to increase the dividend to bring the share price back up to $100. That means MSTR will run out of cash much sooner, pulling forward Bitcoin sales to fund payments.

[nicolas, 30 ans @nic_carter]

scott bessent is the funniest member of the cabinet and it's not even close

[traders_guild @traders_guild]

@Globalflows

[🏴‍☠️ @calvinfroedge]

Remember when Trump told you that you were going to get rich in crypto?

[*Walter Bloomberg @DeItaone]

Trump: Could have the blockade of Iran lifted by Labor Day

[unusual_whales @unusual_whales]

"Senate Republicans have officially ditched an effort to fund Trump's White House ballroom," per HuffPost