Critical takes on crypto, Web3 & the cult of consensus. Threads on mechanics, narratives, and the stuff we ignore. balouthebear.eth | thinking ≠ following
Joined April 2018
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Crypto valuations - Spoiler: They are basically all the same and none is special. $BTC is NO exception here:
nitter.cf/cryptopia13/status/195…
They have done some research about that:
nobodychecked.substack.com/p…
Linkpool has also disclosed numbers with the same result: Selling $Link to fund operations:
medium.com/linkpool/lpl-migr…
they want to do that.
The consequence is that you have to factor in that they are either selling it or handing it out to somebody else. Both cases mean the tokens can/will be back at the market.
As a consequence the mechanisms deserves a hefty discount.
You‘d be surprised how many people don’t understand the difference between a burn and what they do.
And why do you give the mechanism here merit if a) the amount is tiny compared to token releases (same entity).
And b) if they can do whatever they want with it and whenever…
selling all of it immediately.
The logical choice is 2. as long as the token has no other real use or purpose which would make you hold it to benefit from price increases.
Have no data - but people claiming the opposite have a) no logical argument for it and b) no data either
It‘s the mechanic how that works and the logical conclusion. If you receive $Link as a business but have costs etc occur in Fiat you have currency risk. There are two ways to deal with it:
1. Hedge it which is costly and decreases your margin.
2. Avoid it all together by…
do it. They have absolute discretion over it. If they wanna sell all of it tomorrow they can.
Same with payment abstraction. Please for the love of god inform yourself what it really does: At best it‘s an increase in the velocity of token circulation. Not more, not less. …
People having access to an LLM cannot seriously still refer to payment abstraction or reserve as relevant.
This is not justifiable.
The reserve is nonsense squared. It‘s not a burn. It‘s just another wallet CL 100% controls what they gonna do with it and when they gonna….
Another aspect: Chainlink services have secured trillions (according to their message) and all of that with $Link not playing any meaningful role at all.
So you have a system securing huge sums that runs flawlessly.
Making any changes introduces uncertainty and risk….
And the problem is that by default and by law the equity is the relevant part of any company.
You have to make a deliberate choice like $Hype did for instance to change that.
We have not seen this choice made by Chainlink labs. They say a lot of stuff but no action so far 🤷♂️
Ok - this is not a discussion based on arguments anymore.
The lack of understanding how economics and incentives in general and here in particular work is astounding.
Not much interest to discuss the topic further without having a factual argument.
Good Day, Sir
You do realize that basically all the news we have seen over the last years are in regards to trad-fi and legacy institutions.
Defi is not the center of the world and is not the main area CL operates. These times are long gone.
That is exactly my point here 👇. There‘s no need for them to do that & $Link has been more or less classified as a commodity. Commodities are the opposite of carrying ownership rights or reaping benefits of something.
So incentives for CL are to not share with token holders.
1/ Is $LINK worth it — or is Chainlink worth it? Not the same question. The network is winning. The token may be a separate, much weaker bet. A thread on how Chainlink’s success and $LINK’s value quietly decoupled 👇 #Chainlink #LINK 🧵
There are other ways to do that - you can have that in a synthetic way and don’t have to issue equity: VSOP.
I‘ve tried to find out if sth exists by texting with employees leaving CL. Unfortunately I could not get an answer cause they could/would not want to disclose.
Correct.
They did not abandon it officially though and we might have the issue with the former SEC and still no clearer laws due to Clarity Act failing.
However, the longer the system runs perfectly fine without that, the higher the incentives to keep it that way.
Either you mean the 700 $Link in terms of slashing - which is just ridiculous in terms of the numbers we are talking here.
Or you refer to ‚Economics 2.0‘ which has never been implemented. Go and check for yourself: Chainlink documentation is public.