🌍 Macro Mondays by @michaelrinko 🌍 Monday, September 26th

Synopsis:

U.S warns Russia of "catastrophic consequences" if it uses nuclear weapons

🧵👇

Over the weekend, Jake Sullivan, President Biden’s National Security Advisor, made the rounds on the Sunday morning talk shows. When asked how the U.S. would respond to the potential Russian use of nuclear weapons in Ukraine,

Mr. Sullivan used a phrase that should send chills down the spines of Americans and Russians alike. He said Russia should expect “catastrophic consequences” should they choose to use nuclear weapons in Ukraine

Mr. Sullivan’s modulated response was intentionally vague, yet underscores just how quickly the rhetoric has intensified as Russia has suffered severe setbacks on the battlefield in recent weeks. Let’s recap.

Keep reading 🍿:

https://momentum6.substack.com/p/macro-mondays-catastrophic

🌍 Macro Mondays 🌍 Monday, September 19th

Last month, the FED released a report on DeFi detailing the transformative potential and associated risks

@coinbureau recently dropped a video explaining the details of the report. We loved the video so much that we decided to summarize it in a thread

🧵👇

Before we continue...

You can read the unrolled version of this thread here: https://momentum6.substack.com/p/the-feds-defi-report-summary

1. INTRO:

Cryptocurrency's purpose is to disrupt the existing financial system

This makes DeFi protocols direct competitors to the commercial and central banks

That's why the report published by the Federal Reserve about  #DeFi is very significant

2. REPORT OVERVIEW:

The FED's report is primarily about DeFi's transformative potential and associated risks

The report begins with an important statement that the DeFi products and services are conducted without a trusted central intermediary like a bank

Surprisingly, the authors seem to consider #Bitcoin as the first DeFi protocol since it was possible to send and receive $BTC payments in a trustless manner

They also point to the proliferation of smart contract #cryptocurrencies as the precursor to the explosion of DeFi

The authors then present two potential outcomes for DeFi adoption:

1. DeFi evolves to become interoperable or even integrated with the existing financial system

2. Or it evolves to become its own financial system which would be the preferable outcome for #Crypto

However, they are unconcerned about either possibility due to the financial stability problems that the DeFi poses since there is a lack of regulation around DeFi

To put it another way, they are saying, "We can't control it, so it's bad regardless of what it becomes."

3. BLOCKCHAIN BASICS:

The second part of the FED paper is about the basics of blockchain

They acknowledge that the Bitcoin blockchain is the first blockchain when the first Bitcoin block was mined in 2009!

They also turn to the topics of smart contracts and here's the issue:

They acknowledge the fact that oracles are required to make most DeFi protocols work

This could be a problem since they may target popular oracles like @chainlink to impose regulations on DeFi

4.  DEFI PRODUCTS AND SERVICES:

The authors say that many dApps provide discreet services rather than complex bundles of products

This might be b/c central banks are obsessed with the idea of a one-stop shop for their upcoming central bank digital currencies (CBDCs)

They also mention new protocols that offer a combination of several products in an attempt to become a one-stop shop for financial services

This could also be a hint that they might start going after those kinds of DeFi protocols more aggressively

What's even scarier is that the authors single out @MakerDAO to discuss governance in DeFi

This is scary b/c MakerDAO is mostly collateralized by @circlepay's $USDC

And the FED has the power to freeze everything if they wish to

Apart from the speculations, the authors appear to be 'somewhat' supportive of DeFi as they offer some suggestions for how it could be improved:

1. The introduction of more real-world assets

2. The creation of more robust stablecoins

3. The introduction of CBDCs

5. BORROWING & LENDING:

The authors then talk about borrowing and lending protocols

What's odd is that the authors specifically mention that  "Fees are often denominated in a platform's governance token"

They conclude that "Lenders may earn an interest rate that exceeds rates offered by banks on sovereign currency denominated deposits"

This might be a problem for DeFi since it creates competition for the big banks and the FED has the power to save the big banks

5. PAYMENTS & ASSET MANAGEMENT:

The authors define the payment-related DeFi protocols as the ones that are designed to solve issues with efficiency, interoperability, and privacy to provide a better user experience

They also touch on the Bitcoin Lightning Network

They also explain that the asset management DeFi protocols automatically redirect any crypto deposited into them to wherever they will earn the highest yield

And guess who's on top of their list? It's @LidoFinance

This is scary b/c it might be a clue that they are potentially foreshadowing regulatory scrutiny for Lido

And this could be very bad for @ethereum since it has transitioned to the proof-of-stake consensus model

7. DEFI BENEFITS:

In this part they discuss the benefits of DeFi:

1. When opposed to TradFi, blockchains execute transaction settlements more quickly

2. All transactions on blockchains are publicly viewable. This makes it easy for investors and regulators to assess market participants' status and any potential risks they're experiencing

3. The third benefit of DeFi the authors identify is "Auditability".

Blockchains allow us to check the accuracy of financial
statements from individuals and institutions and make it possible to assess the security of the smart contracts that make up the DeFi protocols

4. Cryptocurrency's censorship resistance.

The authors seem to reference this by noting that dApp creators can decide which transactions to accept or reject

This is only beneficial for the governments since they can order the dApp to impose sanctions

6. DEFI RISKS:

The authors then go on to list all the risks of DeFi

1. DeFi is still small relative to the financial system that it seeks to replace, but the rapid growth of DeFi could pose future challenges to financial stability

They say that the current developments in DeFi have the potential to trigger a DeFi version of a financial crisis possibly with spillovers to the traditional financial system

2. They also point to DeFi's high leverage and illiquidity as an area of concern

3. The consensus protocols of the blockchains are corruptible if more than 50% of the hash power or stake is by a single entity or set of coordinated entities

4. An error in a smart contract code is eventually exploited, and this often results in a massive loss of funds

5. The conditions of a smart contract must be predetermined and are thus permanent. This means that it's not possible to write a smart contract whose terms and conditions can be easily changed like a real-world agreement

6. Transaction ordering problems. From transaction fee competition to minor extractable value

7.  Liquidity issues. Many DeFi protocols need large amounts of liquidity to function properly. The absence of liquidity can cause serious issues such as price slippage

8. The authors go on to say that the governance of dApps is flawed and is quite centralized in practice

What's wild is what the authors suggest as a result of this risk:

Financial regulators should gain authority over finance conducted on blockchains, and they should have similar authority over on-chain protocols controlled by centralized groups

9. The final risk that the authors touch upon is the correlation between the DeFi and the TradFi ecosystem

They begin by saying that it's more than likely that crypto will exist alongside TradFi

And because of this, stablecoins like $USDT possess a huge risk to TradFi

A run on $USDT or any other stablecoin could create serious issues for both crypto and the traditional financial system

7. WHAT DOES IT MEAN FOR CRYPTO?

The authors once again reiterate that DeFi is growing rapidly and therefore requires regulation ASAP

The authors also specified the concerns arising from the governance of the code used in dApps

This again suggests that crypto projects with centralized governance mechanisms could soon come under fire

It is clear that the folks at the FED are perfectly aware of the crypto industry and its risks

This awareness also means that the FED knows where to impose stricter regulations on the DeFi sector

However, the FED report is certainly bullish for the crypto sector

Just the fact that $BTC & $ETH are mentioned in a report from the central bank proves that crypto is slowly taking over the world

Hence, during the next bull market, we could hit the critical mass required to create a parallel system that can't be crushed by regulations!

See the full video here: https://youtu.be/Z2iz6a_SFy4


See the full FED DeFi Report here: https://www.federalreserve.gov/econres/feds/files/2022057pap.pdf


Get the latest news and research from M6 Labs directly in your inbox before Crypto Twitter!

Subscribe to our Substack for institutional quality content curated by a community of degens:

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FED DeFi Report Summary

@binance recently announced that it will convert user balances in $USDC, $USDP, and $TUSD to $BUSD automatically

Is this an unethical move by @binance?

Or are they genuinely trying to improve the customer experience?

We expose the hidden truth to you 🧵

Before we continue...

You can read the unrolled version of this thread here: https://momentum6.substack.com/p/is-binance-forcing-users-to-use-busd

@binance announced that existing $USDC, $USDP & $TUSD balances in user accounts will be automatically converted to $BUSD

Any new deposits of $USDC, $USDP & $TUSD will also be converted into $BUSD in the future

The change was meant to improve liquidity & capital efficiency

TO BE CLEAR: BINANCE IS NOT DELISTING $USDC

Users can view their $USDC, $USDP and $TUSD balances under the $BUSD denominated account balances

Users can also deposit/withdraw funds in $USDC, $USDP, and $TUSD at a 1:1 ratio to their respective $BUSD denominated accounts

Binance has suspended spot, future, and margin trading in $USDC, $USDP, and $TUSD for a small subset of coins

IS THIS AN ETHICAL MOVE BY @cz_binance?

Removing most of the stablecoin pairs does simplify the task of market makers and minimizes liquidity fragmentation

It also makes the user experience better since users no longer need to convert their $USDC into $BUSD or $USDT each time they want to margin trade perps on the Binance exchange

Due to the restricted liquidity of $BUSD outside of Binance, customers have to convert the $BUSD into $USDC in order to use it in the other exchanges. This is advantageous for $USDC as well.

https://twitter.com/jerallaire/status/1567189447032143872?s=20&t=nuOdHGj59g0q2W3GFx9z3g

So, what's the problem here? 

It's a win-win situation for all right? 

This move was intended to serve the users right?

NOPE.

IT'S A WIN SITUATION ONLY FOR BINANCE. 

USERS ARE MORE VULNERABLE THAN EVER BEFORE.

HERE'S WHY:

1. Binance's forced "Auto-conversion" is blatantly monopolistic behavior of a typical FinTech company

They are no better than traditional banks that have the power to freeze or take control of user funds

Where is the decentralized future that #Web3 users were promised?

If they have the power to convert all of your $USDC into $BUSD, they certainly have the power to take all of your $BUSD

Users of the Binance exchange must be more cautious than ever to prevent their funds from being compromised on the exchange

https://twitter.com/_TomHoward/status/1567540424608460800?s=20&t=E0UzENaI1m-AEcR1sK6ANA

2. Binance is indirectly harming other stablecoin's business revenue by implementing this auto-conversion of stablecoins to $BUSD

Especially $USDC.

Binance now has the opportunity (instead of $USDC) to earn huge yields on their user cash deposits

https://twitter.com/lowstrife/status/1567336654519631884?s=20&t=Jp3_HJpFhKl9j3DlmMKh8Q

3. Binance is trying to gain an unfair advantage in the stablecoin market using its PLATFORM

Real businesses gain market share by giving their users more value or by having an advantage over their competitors

Not by "AUTO-CONVERTING" user funds in a monopolistic way

VERDICT:

Although the intention of concentrated liquidity might be a beneficial move for everyone, it is certainly not ethical to forcefully convert users' funds

It certainly appears to be a monopoly play to grab other stablecoin's revenue

Get the latest news and research from M6 Labs directly in your inbox before Crypto Twitter!

Subscribe to our Substack for institutional quality content curated by a community of degens: 

https://momentum6.substack.com/

Is Binance forcing users to use $BUSD unethical?

CC0 (Creative Commons) is one of the least understood topics in the #NFT industry

It has the potential to either make or break the NFT industry! 

Keep reading to learn all about #CC0 to stay ahead of the pack:

🧵👇



In this thread we will discuss:

• WHAT IS CC0?
• IP RIGHTS SPECTRUM
• CC0's ARCHITECTURE
• WHY IS CC0 IMPORTANT TO THE NFT INDUSTRY?
• WHY PROJECTS ARE HESITANT TO FULLY COMMIT TO CC0?
• WHICH PROJECTS CAN USE CCO?
• BENEFITS AND DRAWBACKS OF CC0



Before we continue...

You can read the unrolled version of this thread here: https://momentum6.substack.com/p/what-is-cc0-creative-commons



The primary purpose of #Web3 is to eliminate middlemen and credit original creators for their artworks

It ensures complete creative control for both users and creators

Although Web 3 is heading towards COMPLETE OWNERSHIP, there are still issues that need to be fixed



Note:

Stakeholders are the:

1. Builders who build new businesses on top of the NFT Project's artwork

2. NFT Holders who bought the NFTs to utilize them to generate passive income



Most NFT projects have taken the good old COPYRIGHTS approach to exercise their rights over the artwork

This prevents several stakeholders from building on top of the NFT project

However, CC0s can eliminate centralization and offer stakeholders rights over the artwork



• WHAT IS CC0?

CC0 is a type of copyright that gives stakeholders full rights to use their NFTs for monetary purposes

The stakeholders can build new businesses on top of the original artwork without any permission from the project itself



This differs significantly from traditional copyright laws, which normally grant only the project exclusive rights to their artwork

As of now, there is a broad spectrum of IP rights from which NFT projects can choose and adopt



IP RIGHTS SPECTRUM:

On the one extreme, there is Creative Commons (CC0), where the project will not be enforcing any copyright over the NFT

As a result, stakeholders can essentially build on top of the original NFT collection and utilize it in any way they choose to



On the other end of the spectrum is the traditional copyright system, where the project has full control and IP rights over the NFT

Stakeholders cannot utilize the NFT to build, advertise, incentivize, or use it for any other purpose other than just owning the art



Some NFT projects go for a middle ground, granting IP rights based on certain criteria

Example:

Some projects may have a maximum incentive cap for the users to build a business built on top of the NFT artwork



@BoredApeYC gives IP rights to the specific Ape that you own to use it for commercial purposes

@doodles requires creators to obtain permission from them to commercialize their NFT and to build a business on top of it



• CC0's ARCHITECTURE

1. OPEN PERMISSIVE RIGHTS:

The right for anyone to use the original artwork and create spin-offs to build new products

The IP rights of the artwork can be used on lunchboxes, bags, etc.

This, in turn, raises the value of the original artwork



2. INCENTIVES FOR CREATORS:

Builders that build products based on original artwork get incentivized by the artwork's community

Fans who want to purchase the artwork's products incentivize creators

As more builders build on top of the artwork, a positive cycle is created



3. CENTRALIZED DECISION MAKER:

The purpose of a centralized decision-maker is to primarily optimize the aforementioned points

It is necessary for the project b/c the project's growth may or may not go in the right direction without them



• WHY IS CC0 IMPORTANT TO THE NFT INDUSTRY?

Since CC0s enable everyone to build on top of the original NFT collection, it scales the NFT industry as a whole as more and more creators rush to build on top of NFT projects for commercial and incentive purposes



In essence, CC0s help in advertising the NFT project by giving the project's audience the ability to use it for shows and movies

CC0s also offer a decentralized approach to the development and advancement of the NFT project



When the project owns all of the IP rights, it is completely its responsibility to develop and make the IP valuable in the future

As a result, the entire NFT project's users rely on a centralized entity to bring value to the table



On the other hand, CC0 allows the entire NFT community to build on top of the project in order to increase the value of the IP

Given the large number of people using the IP to build products, this increases the likelihood that the IP will be more valuable in the future



CC0 is also necessary to build a global brand where millions of people can build and commercialize with the NFT IP

Thus, CC0 gives an agnostic platform where anyone can build on top of the IP to bring more value to the NFT project



• WHY PROJECTS ARE HESITANT TO FULLY COMMIT TO CC0:

Most projects will want to tightly control their brand in order to prevent stakeholders from using their artwork for detrimental ends



EX: The value of a family-friendly NFT project will deteriorate when its art is being used in a porn commercial

Therefore, even if a project uses a CC0 framework, it will typically need restricted categories for commercial use



• WHICH PROJECTS CAN USE CCO?

A project is better off using a traditional copyright framework for IP rights if it is seeking to establish an "entertainment brand"

As an entertainment brand, you will require IP rights to use your digital work for a wide range of purposes



However, CC0 would be a better choice if a project aims to establish a "Memetic internet community"

CC0 takes a "community" approach where anyone can build on top of the original artwork

Hence, CC0 essentially spreads the artwork's "meme" and thus scales the project



Benefits of CC0s:

• It enables anyone to build on top of the NFT project thus scaling the project and accruing value to the ecosystem

• It makes the digital artwork accessible and utilized by anyone, thus encouraging NFT adoption



Drawbacks of CC0s:

• There is a risk that the project's value will diminish over time since the artwork could be misused for negative reasons that could damage the project's reputation

• It reduces the exclusivity and rarity of the NFT collection



VERDICT:

CC0 introduces new revenue streams for both project's founders and stakeholders

Stakeholders of the artwork can 'rent out' their artwork to be used in commercials/short films

They can use the IP to build products and get incentivized by the fans of the artwork



This benefits the project's founders since it accrues value back to the artwork as more people join the community to build more products

However, without a centralized creative visionary the project might not head in the right direction & have unintentional consequences



As a result, a centralized decision maker paired with the powerful effects of a memetic community might be the sweet spot for NFT projects that want to adopt a CC0 framework



Get the latest news and research from M6 Labs directly in your inbox before Crypto Twitter!

Subscribe to our Substack for institutional quality content curated by a community of degens: 

https://momentum6.substack.com/

CC0 (Creative Commons)

🌍 Macro Mondays by @michaelrinko 🌍 Monday, September 19th

Synopsis:

Stonks have gotten crushed. This latest round of pain has been driven by the disappointing August CPI print, which the market has taken as an indication that the Fed will not pivot anytime soon.

🧵👇

While year-over-year inflation decreased slightly in August, headline inflation rose 0.1% and “core” inflation rose 0.6% month-over-month

This latest print caught many investors offside, as evidenced by the painful decline in global stonk indices on the day of the print (9/13). As Shakespeare once said “expectation is the root of all heartache.”

The question now is *how* hawkish Jerome Powell will be during his FOMC presser on Wednesday. The market currently expects a 75bp hike, but traders will be listening for any dovish hints of a future pivot.

Keep reading 🍿:
https://momentum6.substack.com/p/macro-mondays-more-powell-pain-or

Macro Mondays 9/19

Does our current macro setup resemble that of the crash of 1929, 1940, or 2008?

@BanklessHQ did a podcast with @LynAldenContact discussing the current macro state of the financial markets

Here's our synopsis of the key ideas discussed: 

👇🏾🧵



Q1: IS THIS THE END?

Let's divide it into a couple of different time frames and use @RayDalio's long-term debt cycle framework

We can say that it's the end of something big, but of course, the end is a long process and it can be a decade-long process

When we go down to zero interest rates and reach a massive amount of debt in the system, we usually go through some sort of currency devaluation and system change

So, it's not the end of the world but it's the end of an era!

We've been in a decelerating growth environment for more than a year

The fact that this one is so inflationary is making it more severe and it is starting to look like a recession at least by many leading indicators

Before we continue...

You can read the unrolled version of this thread here: https://momentum6.substack.com/p/podcast-notes-current-macro-state?sd=pf



Q2: WHERE ARE WE IN THE ARC OF THE LONG-TERM DEBT CYCLE?

There's no country large enough to have the only global reserve currency

In the last long-term debt cycle, we did see the transition from the UK having a global reserve currency to the United States

However, we are heading towards a more decentralized type of reserve currency system

It was somewhat accelerated by the events seen in Ukraine and Russia:

Russia starts a war and then the West responds by cutting off their foreign exchange reserves

Suddenly everyone around the world realizes they are holding liabilities of countries they are not necessarily a fan of!

The money-like aspects of these reserves are perhaps not as money-like as people thought if they can be censored and confiscated by others

The US-dominated global order is shifting into a multi-polar world that has multiple centers of power rather than a unipolar world

Thus, the global demand for the Dollar is low among foreign central banks since they are drifting toward a decentralized model



Q3: WHICH PART OF THE HISTORY ANALOGS ARE WE CURRENTLY IN? ARE WE IN THE 1940s or 1970s or 2008s or 2020s?

This inflation is similar to the economic environment of the 1940s

We didn't have a lot of bank lending

We didn't have a lot of demographic expansion

In the 1940s there were huge fiscal expenditures to fight the war and rebuild things after the period of stagnation 

So, inflation in the 1940s was fiscally driven which resulted in a sharp increase in the money supply

So, we have a similar scenario for the past 15 years where the 2008 crash resembles the 1929 crash

Throughout the 2010s we had a mild depression

Then we had the 2020 pandemic and it is very similar to wartime finance in the 1940s

We printed trillions of dollars and it ends up being inflationary as one would expect

Thus, the 2020s are very similar to the 1940's market conditions



Q4: HOW DO WE GET STABLE?

The FED is going to raise rates until it breaks something

The first mistake they made was responding very late to inflation

The mistake that the FED is making right now is responding super aggressively to inflation

We are already in an "economically decelerating activity" environment & the FED tightening into it is very unusual

Not only are a lot of inflation variables outside of their control

They can't do anything about the inflation caused by the supply constraints

They can't create new supply, all the FED can do is try to suppress demand and that can lower prices but ironically that comes at the cost of a recession

So, the FED has a limited tool set and just to preserve their legacy they're going to use it until it gets messy enough



Q5: Are there any weak market links that are going to break first due to FED actions?

It's the treasury market or credit markets

Example:

In 2017, we had a strong economic environment b/c of the fiscal stimulus. It was in the form of tax cuts

They were basically putting more money into the economy and we had a rising economic environment

By the time we got into late 2018, they run out of stimulus and we were slowly rolling over in terms of economic activity

And the FED starts to hike rates!

Jerome Powell described it as being on "Autopilot"

He said that they were going to continue hiking rates and eventually the credit markets broke

The junk bond markets completely froze for six weeks and no one was able to issue debt b/c the yields were messed up



Q6: Will this Recession turn into a Depression like the decade of the 1930s?

It is possible but it would take a different form

The 1930s was a dis-inflationary decade and we had an oversupply of commodities while having a low economic output

In this decade, we are seeing early signs of an energy crisis and this decade would be more of an inflationary type of Depression (if it happens)

However, the bottlenecks that could make this decade bad are:

1. Inflation - Partially what's happening with the money system

2. Shortages - The main problem would be meeting the needs for essential goods

At the end of the day, it's all about whether people can get the energy they need and energy is the master resource that affects everything else

So, the key thing to answer is will we have serious trouble getting the energy we need

And that's also where we can get really bad humanitarian outcomes

Having abundant energy is essential for humans and it is more important than inflation levels

 

Q7: WHAT WILL THE NEW NORMAL LOOK LIKE AND CAN YOU GIVE SOME ACTIONABLE ADVICE FOR PEOPLE TO PREPARE FOR THE NEW NORMAL?

We have gone from a unipolar world to a more efficiently interconnected multi-polar world

Going forward into the future with the high amount of debt and the energy crisis, we are going to have a more constrained world

That could take the form of inflation and there would also be other periods where we could have deflation in the economy

A new normal for this decade is going to be the kind of "Cyclical Inflation" where it can go away for periods of time but then it's quick to return once the conditions are right for it

The practical thing that people can do is to have stockpiles at home and essentially not rely on the idea that everything will be in abundant supply

People should be self-sufficient and be well prepared for periods of disruptions and challenges

People should take a diversified approach to their portfolio and have a number of assets that are important for the next decade

Also, people should cultivate themselves and develop a diverse skill set to make their life resilient to the challenges ahead



Q8: DO YOU HAVE ANY ADVICE ON MENTAL HEALTH?

1. Exercising and staying in shape is really important for mental health

2. Implementing a healthy eating habit is also equally important for mental health

3. Have gratitude for what you have and be as constructive as possible

4. Develop strong relationships around you - either online or offline

Relationships are crucial especially in this environment where people hate each other so much due to extreme wealth concentration

5. We also live in a world where information travels super fast

People should not only focus on their reinforced ideas, rather they must seek out information that they disagree with so that they can learn from it

Podcast Notes 📝: The current macro state of the financial markets

@Momentum_6 Portfolio Spotlight: @PersistenceOne

@binance Integrates the @pStakeFinance Ecosystem to Offer Liquid Staking on the #BNB Chain Network

With its #PoS chain BNB, Binance has been growing steadily

BNB Chain is currently positioning itself as the third Layer 1 network just behind Bitcoin and Ethereum. By partnering with protocols such as pSTAKE, BNB Chain has continued growing and strengthening its position in the crypto market.

How does pSTAKE protocol work?

The pSTAKE protocol offers a liquidity system for users, in which users contribute their native tokens, BNB, and simultaneously a token is generated within the protocol called stkBNB. 

This solution provides two main benefits:

1. The value of the stkBNB token issued by the pSTAKE solution accumulates a reward that accumulates in such a way that it appreciates against the value of the BNB, which is the native token. 

2. The issuance of the stkBNB token allows the user to use that same locked value in other compatible DeFi products to generate additional returns.

Currently, it is estimated that $8.9 billion is locked in the liquid staking pools of the Ethereum network, which represents approximately 33.5% of the value of Ethereum in the network, according to data provided by @DuneAnalytics

BNB's partnership with the Liquid Staking solution developed by @PersistenceOne entails an opportunity to continue deploying financial solutions that support all those who interact in the crypto ecosystem.

In addition, pSTAKE works in parallel with the Ethereum ($ETH), Cosmos ($ATOM), and Persistence ($XPRT) networks, and work is underway to make it operable on the Solana and AVAX networks.

Through the multi-chain support by pSTAKE, the user can move tokens in a simpler way, taking advantage of the best staking performance options.

To do this, there are integrations with @PancakeSwap, in which a pair of liquidity groups will be available, allowing users to stake the stkBNB/BNB and PSTAKE/BUSB tokens. 

Users will be able to exchange pairs and provide liquidity while earning liquidity tokens.

And when these same tokens are wagered, the user receives $CAKE as a reward. 

In the same way, on @AlpacaFinance, users can take advantage of yield farming for PancakeSwap's stkBNB/BNB and PSTAKE/BUSB pairs by depositing and borrowing assets. 

Alpaca users will receive PSTAKE rewards through their grazing groups and according to their rank.

All these solutions and integrations for the Binance Smart Chain ecosystem are expected to increase the interest of users in the adoption of this network.

We believe BNB can continue to grow and position itself in the market hand in hand with pSTAKE.

Continue reading the full article on Binance's pStake integration here: https://momentum6.substack.com/p/binance-integrates-the-pstake-ecosystem

Binance Integrates the pSTAKE Ecosystem to Offer Liquid Staking on the BNB Chain Network

Dossier: What's Wrong with Crypto Gaming

The Current Crypto Gaming Landscape is Stupid, Let’s Explore How it Could Potentially Be Not Stupid in the Future

A painfully honest letter about Crypto gaming:

✉️ 🎮 🧵👇

If people were honest with themselves, they started to care about Cryptocurrency, blockchains, consensus models, or any other underlying tech and buzzwords in this space because of the financial incentive. People are hoping to strike it rich! Filthy rich. Let’s be honest. 

Just like the gold rushes of days long past, what we’ve witnessed over the past decade of Crypto’s history is a massively impressive speculative rush - with many having made life-changing wealth. 

We’ve seen narratives and stories rise and fall cyclically regarding what makes this technology special and how it will one day change the world. 

We’ve seen projects gain meteoric growth and “success” in such short periods, as well as an influx of capital, talent, and attention into the Cryptocurrency sector. Many believe that Crypto gaming will be the future. Will it, though? 

The short version answer is yes - but we are nowhere near close to the endgame, and the current landscape is a joke. We explore the state of Crypto gaming and attempt to peer into the past and future to create a vision of what may organically and naturally “win” this race.

Prelude

Questions are healthy! It’s essential to question the world around us. Here are some primer questions to consider throughout:

• Genuine question - why will any of this need a token to work? Crucial - does a token NEED to exist?



• What role can a token play that isn’t just ponzinomics, useless governance, or gas fees?

• What lessons can we learn from the current gaming industry - both successes and failures?



• Will AAA games be the ones to succeed or indie games?

Keep reading to explore these topics.

Check out the full dossier, a preview of our upcoming Crypto Gaming Industry Report: https://momentum6.substack.com/p/dossier-whats-wrong-with-crypto-gaming

Dossier: What's Wrong with Crypto Gaming

🌍 Macro Mondays Newsletter 🌍 Monday, September 12th

This week we're diving into the Macro Implications of Ukraine’s Stunning Counteroffensive

👇🏾🧵

Synopsis:

Europe is in trouble. Along with the European Central Bank’s belatedly hawkish turn, the continent is buckling under the weight of sky-high energy prices. 

Markets are currently flashing warning signs that Europe will soon face a difficult winter as businesses and consumers alike confront crippling energy prices.

Many key questions that remain after reading the full newsletter:

• How widespread are Russian desertions?

• How will Putin react to this shocking setback? Will he escalate?

• Will the Ukrainians continue to push forward or pause to regroup?

• Will this “win” provide enough political capital for European countries to remain aligned with Kyiv ahead of the coming winter?

Keep reading 🍿: https://momentum6.substack.com/p/macro-mondays-macro-implications

Macro Mondays Newsletter

The DeFi insurance industry is one of the most flawed sectors in the Crypto realm

If you do not understand the risks associated with DeFi insurance, you are unlikely to get any insurance claims

We expose the wild west of DeFi insurance and present a viable option for you:

🧵👇

In this thread we will discuss:

• WHAT IS DEFI INSURANCE?
• HOW DOES DEFI INSURANCE WORK?
• THE WILD WEST OF DEFI INSURANCE
• A VIABLE OPTION

Before we get started...

You can read the unrolled version of this thread here: https://momentum6.substack.com/p/risk-associated-with-cryptodefi-insurance?sd=pf



• WHAT IS DEFI INSURANCE?

#DeFi insurance works in the same way as traditional insurance in that it protects individuals from financial losses caused by unfavorable events such as hacks, exploits, smart contract bugs, and so on

Individuals can purchase DeFi insurance if they want to safeguard themselves against losing money on the DeFi platform

If the individual loses money, they can use the DeFi insurance protocol to claim a specific sum as compensation

But the individual must pay an insurance premium for the coverage based on a wide range of variables such as length of the policy, type of exploit, etc.



• HOW DOES DEFI INSURANCE WORK?

In DeFi insurance, liquidity providers lock capital into various liquidity pools called the 'CAPITAL POOLS'

The individual who is providing coverage has the freedom to pick which protocols they want to cover

Existing DeFi insurance protocols aim to cover specific DeFi risks, typically smart contract failures or exchange hacks

This is achieved by staking specific projects, but this approach puts the entire stake at risk in the event of failure!

The individual who provides coverage receives interest based on the amount of funds locked in the capital pool

This interest comes from the premium paid by the customers of the DeFi insurance protocol

 

• THE WILD WEST OF DEFI INSURANCE:

Insurance has become a necessity in the DeFi world given the ~$2 billion in losses caused by smart contract attacks this year

Although DeFi insurance is a clear necessity, there aren't many DeFi insurance protocols that solve the insurance problem in a sustainable way

Current solutions create a zero-sum game by transferring one investor's misfortune to another



1. RISK:

Since the stakeholders cover the cost of a policyholder's payout, project staking leads to a permanent loss of staked assets as claims are paid

This is due to a high correlation of risk between the assets staked and the project being insured



2. CAPITAL EFFICIENCY:

Project staking is the process of providing coverage for the specific projects the liquidity provider wants to cover

Project pools are capital inefficient since they require a fully collateralized position in order to offer coverage

Otherwise, the likelihood of insolvency is high!

Offering coverage at a 1:1 ratio is dangerous to stakeholders because a single claim could result in total liquidation



3. REWARDS:

The returns are generated from coverage purchased only in that pool and shared among a large group of stakeholders

Thus liquidity provider returns are reduced as new stakeholders enter the pool

However, the risk of permanent staking loss remains the same!



4. COVERAGE:

DeFi Insurance policies are created for specific projects for a specified time period covering only specific events

So, the policyholder must purchase multiple policies and pay multiple premiums for different risks since there is a limited coverage



5. CLAIMS:

Insurance claims are decided by a stake-to-vote mechanism

If you vote unfairly, you are liquidated

If you vote fairly, you get liquidated for paying out the claim

This results in a lack of a win-win situation for voting shareholders and skewed voting results

Also, most votes on insurance claims have been a 100% consensus to pay or not to pay, but in a DAO with proper incentives, votes shouldn’t have 100% consensus!



• A VIABLE OPTION:

FairSide’s solution to the lack of insurance in the Crypto space is non-insurance

@FairsideNetwork is a non-insurance solution to cost share unfair Crypto loss events amongst its members

It is an open network with no restrictions on membership

@FairsideNetwork aims to develop a decentralized, sustainable model by using the traditional insurance industry’s proven business model

FairSide spreads out risk over numerous areas to ensure that the potential negative effects of exposure to any one variable are limited

Funds are locked in a smart contract and can only be unlocked with a consensus vote of the community

The community focuses on assisting members with an immediate need due to any type of unfair #cryptocurrency loss

FairSide operates as a DAO and FairSide members will pay a membership fee and will receive cost-sharing benefits for their future Crypto loss events

Members will vote on whether the need of another member meets the community standard of an unfair cryptocurrency loss

If so, cost sharing will automatically be distributed via a smart contract to the receiving member’s wallet from the Capital Pool

The network will rely on the community’s involvement to determine types of losses to include or exclude in the network

But how does FairSide solve the problems of DeFi insurance?

1. RISK:

Network Staking diversifies the risk by spreading it across the entire network

Since there is no correlation to a specific project, paid claims result in minimal, temporary losses for stakeholders



2. CAPITAL EFFICIENCY:

By decoupling the assets from any specific project or type of loss, network staking produces 10x capital efficiency

The low correlation of risk drives capital efficiency, increases staking rewards, and provides the widest coverage



3. REWARDS:

Network Staking earns rewards from all members seeking coverage

As new stakeholders join, the distribution of rewards increases up to 85% to prevent the dilution of rewards



4. COVERAGE:

Members only need a single membership to receive FULL coverage for all approved loss types

Once a loss type has been approved by the community, it is automatically included in present and future memberships



5. CLAIMS:

Network staking allows for voting on loss events, not individual claims, to produce the fairest outcome

In this system, a vote is taken by the community to approve a claim event for cost-sharing benefits

And contributors are not liquidated if a loss is paid!

Although the DeFi insurance sector is still in its infancy, many protocols are working to develop innovative strategies for protecting users' assets

FairSide appears to be a viable option for those wishing to compensate for their Crypto losses while paying a premium

However, there are still many problems with other DeFi insurance protocols that need to be resolved

So, it is not advisable for regular people to insure their Crypto because they might not receive any compensation for their losses even if they pay a premium for it!

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