Liquidity and Value

Opens April 10th 2024 on liquidity and value, lamenting that the industry reduces a project's entire worth to its token price and CoinMarketCap rank rather than its mission or usage.

Invokes Benjamin Graham, the 1894-born father of value investing and author of The Intelligent Investor, whose framework his student Warren Buffett used to build Berkshire Hathaway.

Argues crypto has no real notion of value, since token price is always tied to liquidity: a million-dollar token you can only sell a dollar of a year is like Bart's 100-year check to Milhouse.

Fairness of data as a factor, warning exchanges can run incestuous deals to manipulate a token's price feed and cook liquidity with wash-trading bots, a form of illegal shill bidding rampant in crypto.

Cardano was just passed on CoinMarketCap by TON, a centralized issuer whose top 100 wallets reportedly hold over 90 percent of supply versus 21 percent for ADA, inviting cooked TVL.

Just as the EDI was created to define decentralization, the industry now needs an EDI for value, a macroeconomic framework capturing the hundreds of inputs behind a price.

A big delta between market value and measured value predicts a correction, since in the long run measured value converges to market value, the essence of value investing.

Frames Cardano's problem with a metaphor: it is a beautiful island with only slow, inconsistent flights to the continent of cryptoland.

Cardano projects lack visibility in cryptoland, so they naturally chase centralized exchange listings to draw people to the island.

Names projects like Bakayero, SundaeSwap, MinSwap, and World Mobile that would excite cryptoland if seen, but warns CEX listings have been predatory, asking 7 to 10 percent of token supply, so the island should negotiate collectively across tiers.

For the short term, points to permissionless DEXes doing billions in daily volume as the alternative to centralized exchanges.

Proposes a self-balancing automated index of the top 50 Cardano native tokens, seen on TapTools, working as a smart contract custodian, purchaser, and rebalancer where Bob sends ADA and gets one weighted index token.

The index token can be redeemed for the underlying weighted assets or sold, and it aggregates their yield for withdrawal on demand.

Listing that index token on cryptoland DEXes lets people buy Cardano's top 50 with SOL or ETH, creating a demand loop that brings value onto the island, fully automated as a decentralized vending machine.

Defends partner chains, also called Cardano CL or the service layer discussed since 2016, as how Cardano connects to cryptoland and sells services like Midnight's computational privacy in native currencies, with bridges minting wrapped assets on demand.

Stablecoins are essential for efficient markets, and the Djed protocol COTI launched, with its Shen reserve coin around 14 million, keeps versioning up to dampen volatility.

Treats an asset-backed stablecoin as a when-Coinbase-style inevitability, citing homegrown USDM, and insists Cardano does not need Circle to save it since a stablecoin needs only about an eighth to a quarter of TVL, roughly 150 million now.

Stresses none of Cardano's DeFi existed in 2021, yet smart contracts grew over 600 million in organic TVL with no VC, insider, or pre-mine support.

A good value metric would distinguish organic TVL from self-serving TVL, where a foundation dumps 10 billion of its own pre-mined asset into dapps, like the Obama-medaling-himself meme.

The island keeps reclaiming land with the best governance coming online, the community working on the Cardano constitution and CIP 1694, while the rest of cryptoland is Mad Max anarchy sped up only by Leios and Hydra.

Warns legacy land uses asset-backed stablecoins, centralized exchanges, and ETFs as forces of imperialism to colonize cryptoland, like Australia to the UK.

73 percent of crypto economic activity runs on Tether or Circle, giving legacy land the deciding vote on which chain forks survive.

Cardano is careful not to let two legacy-land companies control the whole pie, citing Guns, Germs, and Steel on how the strong have taken from the weak across 2000 years.

Invokes negotiator Chris Voss and Never Split the Difference on leverage, arguing a strong DEX game reduces reliance on centralized exchanges and gives the ecosystem real negotiating power.

Cardano has among the furthest governance advancements outside Polkadot's OpenGov and Tezos, enabling ecosystem-wide public works and keeping value from leaking away.

Ties value to self-sovereign identity and being your own bank, property, data, and consensual transactions respected, which legacy land does not care about.

Attacks the complexes, military-industrial, pharmaceutical, and media, that own the narrative and brand truth-tellers conspiracy theorists while people get a little poorer every year.

Warns that if Circle joins as a silent fourth party, it could veto every future hard fork and push contingent staking, transaction rollbacks, or account freezing.

Argues a balanced approach needs leverage: if you cannot credibly threaten a pullout you have no power, so invest in institutional integrity so no single actor takes advantage of you.

It is easy to ship a centralized BFT chain, but Cardano's 209 papers and best engineers chose the hard path of decentralized sustainable governance and a real push at the blockchain trilemma.

Points out CoinMarketCap values Cardano below Dogecoin and asset-backed stablecoins, and says it is your call whether to accept that as legitimate or build a different value metric like the EDI.

CIP 1694 puts the community in charge: they can print ADA to juice TVL and chase the token, but that is the crypto-land game he left, and he would leave rather than play it.

Frames a coming hard governance decision: should Cardano's specifications begin at Byron or make the Shelley block the genesis, trading some immutability for massive client diversity across Rust and TypeScript nodes.

Only Cardano's deliberative process can debate subsidizing Circle alongside equal subsidies to homegrown stablecoins for balance, a conversation impossible in Ethereum, Solana, or Bitcoin land.

Zooms out to the 21st century reshaping humanity: designer babies already made in China, with most humans genetically modified before birth by 2050 absent regulation.

Lists the shifts, post-capitalism from AI and robotics, multi-planetary life via SpaceX, and a mental-health surge from hyper-connection, that will crumble old institutions and spawn new religions like Kurzweil's singularity.

Warns of a war for cognitive liberty: within 5 to 10 years AI could read your brainwaves and render a thought like a purple elephant, ending mental privacy when fused with social credit and CBDCs.

99 percent of media is about celebrities like Kim Kardashian and Taylor Swift because fame makes money, while there are over 100 million slaves today, more than at the US Civil War.

Do not play the capitalism game against BlackRock's 9 trillion and captured regulators; crypto changed the rules to deflationary, self-made marketplaces with power pushed to the edges.

The fight is not against Ethereum or Bitcoin but against legacy land, and coordination wins: Homo sapiens beat stronger Neanderthals by planning, like a multi-agent AI workflow beating a raw GPT-4 or Claude model.

Builders the billion-dollar sovereign wealth fund is ready: join Intersect, form special interest groups, and solve oracles, offering to host a micro summit with Chainlink at his ranch, rather than copy-pasting cryptoland's scalability complaints.

Challenges people to be honest about whether they are here for philosophy or number-go-up, since on-chain governance even lets a number-go-up majority stage a Pol Pot-style palace coup and burn it all down.

Distinguishes those who own from those who rent or visit: an owner fixes the garbage while a tourist just wishes someone would, so weigh voices by their commitment.

Blockchains let people coordinate economically, politically, and socially, and coordination is why Europe conquered the world and the US beat the Soviet Union, not superior strength.

Argues if crypto wins the coordination and incentive game with human rights baked in, it goes from don't be evil to can't be evil, the mantra that drew ideologically aligned people when Bitcoin was worthless.

Closes saying nothing worthwhile is easy, that people admire astronauts, Navy SEALs, and heart surgeons, and that Cardano is a society-scale proof of concept for a new way for humans to organize, leaving the choice of which world to live in to the viewer.