mikey
@Mikey0x_
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investing in culture @1kxnetwork || former advisory @deloitte
Lisbon, Portugal
Joined October 2021
Put together a complete overview of the prediction markets space as many new teams are building in the vertical. A quick summary on prediction market categories, their GTM strategies, product updates, some numbers, mechanism explanations, and where we are headed:
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The DeFi lending landscape has changed drastically in the past few months and it feels timely to provide an update. A 🧵 on new protocols, stats on who's winning and where, and general trends that will shape lending in the next cycle:
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1/ DeFi has become increasingly complex as there are now over 2,000+ protocols and endless designs. I summarized:.- the definitions of major principal & yield categories and respective differences.- Examples for each category. some more thoughts 👇.
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1/ The DeFi lending landscape is changing rapidly, with several new protocols focused on increased asset composability and availability, especially for long-tail assets. A 🧵 on current and upcoming lending solutions, their respective differentiating factors, and what's next!.
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A few weeks ago, @darrenlautf conducted a crypto fund compensation survey that received 116 people anonymous responses. A 🧵 on analyst compensation data including base salary, bonus and carry figures, influencing variables, as well as stats about the crypto fund space:.
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1/ The IP landscape is dominated by brands such as Pokémon while new entrants struggle to gain market share due to high initial costs, time to bootstrap, and limited distribution. Crypto disrupts the IP market by being open, efficient, and accessible.
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there's like 25 prediction markets launching in the next 2 months lol.
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Some quick thoughts on how Polymarket LP rewards work, how much they're spending, and how sustainable it is:. tldr; Polymarket pays USDC to those who provide limit orders (liquidity) near mid-book. The closer to mid, the higher the reward. Double-sided LPs get more rewards.
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With the incoming American election, prediction markets have started to gain notable traction and attention. The thesis has always been the same: crypto's open-source nature allows for a global and efficient liquidity layer where anyone can participate.
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the launch of Drift's new prediction market has already caused the incumbent to adapt:. - Polymarket (left pic) increased their daily LP rewards for the Trump/Kamala markets from $750 to $1000/day.- despite this, Drift's (right pic) spreads are just as tight on the Trump market,
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A VC's most important job is to fund good projects when nobody else wants to touch them with a 10 foot pole.
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It's shocking to me that not a single crypto news outlet like BlockWorks or CoinDesk mints its newsletters / articles as NFTs. make it free to create a top-of-funnel or make it a dollar and that can scale super easily. this will become a billion dollar collectibles market.
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Pudgy just started a new "kindness" initiative on TikTok where they tip up-and-coming Twitch streamers . the account is averaging tens of millions of views per video, and one vid is going to hit 100 MILLION soon. no crypto, no buzzwords, just pure IP distribution :)
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Kalshi, a prediction market platform, has won its lawsuit against the CFTC and is now allowed to list election markets to U.S. residents. Think Poly stays on top but Kalshi has some professional MMs, including Susquehanna, who I imagine will fill the book and drive notable vol
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1/ Super excited to announce that I have joined @1kxnetwork, where I will be conducting research and supporting builders across DeFi, Crypto Social, and NFTs.
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In the real world, collectibles get lost and damaged, which increases the value of the remaining same items that are in mint condition. In other words, those who take care of their collectibles essentially get rewarded to a greater degree. I would argue they should, because.
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A new FriendTech deriv called @songtech_ launched recently:. - anyone can submit a song (market) for a fee of 0.001 ETH.- holders receive 5% of all buys and sells, another 5% is reserved for the artist themselves.- 0 platform fees.- linear pricing curve.
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2/ You probably know about @compoundfinance, @AaveAave, @CreamFinance and @SushiSwap's Kashi, but other novel lending solutions include:. - @eulerfinance.- @RariCapital.- @SiloFinance (coming soon).- @MorphoLabs (coming soon).
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A simple example of how blockchain will transform sports betting:. Lakers are 2.0 odds to win a game. Web2 sportsbook offers $10K of liquidity. It comes out that the opposing team's 5 best players are injured and no longer playing. Real Lakers odds shift from 2.0 to 1.01. Bob.
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Crypto aside, Pudgy Penguins has been doing an awesome job of growing on traditional social media channels. @pudgypenguins recently crossed 1M followers on Instagram, and Nov 20-26 marked their highest number of gained followers in a week since account launch. Some other stats:
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prediction market perps will never work and will have a similar fate as NFT perps. parlays and options are the only way to increase leverage.
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strongly disagree: above all, Polymarket is a betting and ego marketplace. Polymarket's largest and most consistent users are highly calculated individuals who often do well in poker and sports betting. PMs are a "social epistemic tool", but let's not forget how we get there.
@0xstrobe @llamaonthebrink "gambling/prediction markets like Polymarket". Putting Polymarket into the category of "gambling" is a massive misunderstanding of what prediction markets are or why people (incl economists and policy intellectuals) are excited about them. Prediction markets are interesting.
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In the past month, Euler and @clearpoolfin are the only 2 semi-mature platforms that have seen significant growth. AAVE and Compound reside in the middle of the pack, while Kashi saw the largest drawdown
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1/ My friends @jakub_rusiecki, @0xtaetaehoho, and I minted over 1,000 editions of @angelbaby's "im fine :(" feat. GrimesAI X @akidcalledghost" last week. We wanted to share our rationale around why we think it's a novel experiment:
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i think @_kaitoai will play a big role in measuring and rewarding social contributions that any community member might have to a protocol. leading to a new airdrop meta. the "smart follower" graph filters fake engagement/noise, and prioritizes quality of one's social output.
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hyperliquid's current valuation proves that CEX listings are no longer required for price discovery to happen. this is an extreme tailwind for projects who may otherwise have hurdles getting CEX listings e.g. prediction markets, casinos.
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i used to have this mindset and then i lost my entire net worth on biden to be the democratic nominee, all for an 8% return.
@DrewPavlou This is one of the best things about prediction markets. You can get a pretty decent APR by just repeatedly betting that the crazy thing won't happen.
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Unpopular opinion: utility-backed NFTs have an inherent value ceiling on them because the NFT will be priced based on future expected value. There is a “nothingness” aspect to the world’s most valuable physical collectibles. Fine art, sports cards, Pokémon cards… have no utility.
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A quick rundown on how news affected Polymarket’s Democratic VP market, and whether or not there might have been insider info being traded:. tldr; lots of market-moving news, and users who think they know something!
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1/ I looked at the mcap distribution of top 10 most valuable "collections" per collectible category. Some insights:. - Every web2/3 category has a #1 "holy grail" collection EXCEPT gen art.- we are extremely early to PFPs and gen art, and A LOT will change in the next 5-10 yrs
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An alternative way of looking at DeFi protocols: how much TVL does it take to earn $1 of protocol fees? . What can this say about the served use case and how can productivity be improved?. Per $1 of yearly fees:. GMX: $12.36 in TVL .Sushiswap $130.71 in TVL.AAVE: $527.27 in TVL
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you make money in memecoins by being very early. you make money on prediction markets by being very right. my prediction is that over time. retail will realize that being early, especially as the liquidity fragments, is much harder than simply being right.
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1/ With the Curve Wars heating up, it only seems fitting that @AndreCronjeTech is rolling out a project that incorporates Curve's and Olympus' innovative approaches to token design and incentive alignment. A short 🧵 on the novel mechanics of the upcoming ve(3,3) AMM protocol:.
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LayerZero has allocated ~$18M to its new Community Program, where recipients are hand picked and rewarded based on level of contribution. imo this marks the start of a new airdrop era that rewards real value creation + consistency vs generic onchain txns. some will make millions.
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As retail-driven crypto mania begins to slow down, finding PMF becomes especially important. Inspired by web2 frameworks - some tangible ways to measure product market fit in crypto and their implications:.
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Within a few years of realizing that MEV mainly benefits technical actors instead of end-users, many teams are now focused on re-distributing MEV profits back to those end-users. We have never seen a shift like this in web2. End-users have suffered from 'IRL MEV' for decades. .
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impressive to see Hyperliquid capture almost 2x more volume than DyDx v4 yesterday. without any token incentives and a dramatically reduced point allocation for perps traders compared to Season 1. HLP Vault also sitting at ~43% APR with ~$178 million deposited
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If you're a ZK builder and are looking for a free place to stay at ETHDenver, we @1kxnetwork and @DelendumV are co-hosting a hacker house! . Feel free to DM me or tag friends for details 🙂.
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8/ IP marketplaces allow holders to delegate their rights to creators (e.g. writers, designers) who then create content-based products. Both the IP holders and creators can programmatically split any revenue streams. @storyverse_xyz and Meme Machine are two current examples.
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New potential lending experiments:. 1) under-collateralized lending based on zk-proofs of off-chain collateral (& tie to KYCd onramp).2) loans using social-based NFTs as collateral.3) DAO-focused loans. If you're building in the lending space, don't hesitate to reach out!.
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We are in the early innings of the digital art era, which has been nothing short of exciting due to amazing artists and historic sales. But what does history tell us about artist value over time? How likely is it that "blue-chip artists" will continue to stay relevant?. A 🧵:
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1/ Thesis: liquid staking tokens will become more value-accretive in the next cycle by taking inspiration from the Rocket Pool token model. This applies best to protocols with existing TVL, as adding token friction in the absence of network effects will turn participants away.
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Prediction: there will be a new wave of NFT IP projects that focus exclusively on selling e-commerce products and giving royalties back to the NFT holders. The founders of these projects will be experienced e-commerce sellers who made it big through dropshipping/FBA.
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personally witnessed some IRL MEV last night:. club bouncer (validator) takes $25 tips from people (technical users) that subtly bribe for entry to the club (ledger). regular people are stuck waiting in line for hours as a result.
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Wallet Wars Ideas [once Account Abstraction rolls out]:. - Free txns on L2s, paid for by the wallet.- Free txns on Mainnet up to a certain limit for power users.- Free txns to "friends" / same ENS domains.- User token rewards for using native features such as swapping and staking.
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5/ Bottoms-up IP brands start on simple content mediums and grow into more expensive products over time. Much like how Superman moved from comics to video games and movies, tons of crypto brands will move from NFT PFPs to games, digital experiences, and long-form content.
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2/ Currently, new popular IP hits take a top-down approach by producing expensive content - it takes:. - 100s of employees and $80M+ to build an AAA video game.- Millions to produce a 12-episode anime series.- $50M+ to produce an HQ movie. The barrier-to-entry is extremely high.
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12/ If you are building in the space, we'd love to chat and have you on our podcast @BeyondTheFr4me!. Thank you to @pet3rpan_ @accel_capital @dberenzon @LucaNetz @JamesonMah @benroy__ @perhapsrabbits for all the feedback!.
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One of the limiting factors of PMs is the absence of lev. On the nonsports side, @LogX_trade will allow perps on TRUMP, similar to FTX in 2020. @doxamarket is also working on lev. The counterparty for both projs is pooled liquidity. Liquidations and bad debt remain open q's.
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Two common themes that newcomers are working on:. 1. permissionless markets – open market creation and incentives layer.2. resolution – relying on AI for market settlement, or creating a more efficient system. Polymarket users have repeatedly requested these themes.
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Everyone asks how sustainable the volume will be after the election, and thus far, non-election volume on Polymarket has been uponly since the beginning of the year. If you’re building in the space, would love to chat!
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11/ Our thesis is that NFTs will not only be the favored method for launching new IP, but the upcoming wave of new mainstream brands will arise exclusively from the crypto space.
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restaurants do have the potential to be high-margin businesses, they're just bad at capturing MEV. most charge nothing for v limited future block space (reservations) despite knowing there's much higher demand to transact (eat) than supply (tables). dutch auction = $ printer.
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the most important emerging behavior on prediction markets is actually the social aspect. i'm seeing an increasing number of markets with highly engaged comment sections where users brag after wins. being seen is the end-goal, and betting large sums is the path to getting there.
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2/ DeFi has 8 major use cases:.- liquidity.- swapping.- directional trading.- borrowing & leverage trading.- yield farming.- staking.- depositing capital.- storage. In order to serve these use cases, capital + infra + services are needed, and in return suppliers earn a yield.
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Prediction: airdrops will be just as big in the next cycle, difference will be how they are unlocked. Ideas:.- unlock based on exclusive usage of protocol.- faster unlocks based on more usage.- project milestone-based unlocks.- referral volume-based unlocks.
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6/ Protocol positioning in the lending landscape:. - AAVE, Compound, Morpho: permissioned, limited assets in one pool. - Euler: semi-permissionless, lend and borrow markets for long-tail assets. - Silo and Rari: most permissionless, all assets can be used as collateral
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top 5 crypto universities in no order:. stanford, waterloo, harvard, penn, berkeley. who am i missing?.
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the Ethereum Foundation's $100m in annual spending is a drop in the bucket compared to web2 companies. blockchain is eating the world because it scales exponentially compared to centralized systems
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the stock market dropped more in one day ($2.9T) than crypto's entire market cap ($2.32T). we are so early.
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6/ The above points to the 1st advantage of NFT IP:. The process to launch a bottoms-up global IP brand from Day 0 become faster and cheaper than ever before. 2nd advantage:. Newfound IP building blocks allow for increased creativity, collabs, and output from the wider community.
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Selected list of most forked protocols:. Uniswap: 248.Olympus DAO: 112.Compound: 49.Yearn: 12.Liquity: 12.AAVE: 10.
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On-chain sports betting protocols give us an unprecedented look into granular user activity such as:. - # of total bets per month.- PnL on a per-user or aggregate basis. I looked into @azuroprotocol's (the GMX of sports betting) traction thus far and created a summary👇.
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5) @arcxmoney is lending protocol that values a borrower's historical on-chain transaction behaviour. The better the history (i.e. no liquidations), the higher the maximum LTV. So far, the max borrow is 100% LTV. Lenders supply liquidity based on credit risk of borrowers.
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In the next cycle, personalized wallet messaging will be enabled at the dapp level, scaling to tens of millions of users. With this, comes the marketing wars. Teams competing in the same sector will offer rewards to users who are using rival protocols at a granular level.
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3/ In crypto, PFPs allow brands to take a bottoms-up approach by launching initial lore cheaply, and building the community, in a very short time frame. These short periods of resource-light experimentation allow for faster PMF and iteration, with less sunk costs.
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the next frontier of capital formation (and thus the next regulatory arbitrage opportunity) is ai agents raising money in exchange for future equity/tokens.
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a new protocol called @swaye_co tries to combine the best properties of PMs and memecoins . users who are early to a market are not only betting on a particular outcome but have an incentive to accrue attention because betting activity on either side helps increase PnL
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10/ Product marketplaces naturally occur given that any IP holder can create and monetize products on their own. This leads to increased product line depth and breadth. e.g. an Ape started their own BAYC burger joint, and some Nouns created whiskey, and a restaurant chain.
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14/ The Rari & FEI merger signifies its DAO focus: TURBO will allow DAOs to mint & borrow $FEI at 0% using their native tokens as collateral. $FEI can then be deployed into a Fuse pool with project tokens, allowing long-tail projects to bootstrap liquidity and allow for leverage.
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Disclaimer: These figures may not be accurate, and do not include lots of data points [from those that didn't fill out the survey]. Hope this was somewhat helpful to those looking to break into the space :). Link to original:
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7/ Crypto introduces the primitive of open-source, transferable, and token-based IP rights whereby any NFT holder is able to create and monetize products and ideas. This enables 3 new types of marketplaces: IP, creator, product.
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4/ This type of bottoms-up approach has actually been successfully implemented in the past:. - The animated film era birthed Mickey and Goofy.- The comics era created Batman and Superman.- The manga era produced Yu-gi-oh and Dragon Ball. All have become deca-billion dollar brands
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7/ i) @eulerfinance is a protocol that places assets in 3 different tiers: . - Collateral: can be lent, borrowed, and collateralized .- Cross: can be lent, and borrowed w/ other assets using one collateral pool.- Isolated: can be lent and borrowed alone using one collateral pool
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What’s next? AI agents are the next big user in the space, as they can react quickly to news. They will manage orders, inventory, and place bets. They can also calculate expected values of outcomes and take calculated risks. A couple of teams are working on this in stealth.
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4/ A shared pool structure led to a $130M Cream Finance hack that allowed someone to manipulate the price of their collateral (yUSDVault) in order to borrow the entirety of Cream's market assets. Bad assets pose immense risks for shared pools.
Creamed Cream – Learn the Secret Recipe. Here's my analysis of the $130m+ Cream hack -.
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when we funded Pudgy, other competing NFT projects had way more money, and teams with much more "experience" in the real world. we felt that Luca and Lorenzo were not only young and hungry, but had an understanding of Gen-Z culture that other founders didn't.
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arguably the two most successful projects this cycle, $TAO and $HYPE, both did a fair launch with no VC allocations. interesting market shift.
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Crypto-natives have strong motivations to advocate for NFT assets with minimal execution risk when conversing with new investors. much like how it's common to recommend BTC and ETH to normies - it's simple, easy, and has less implications than advocating for a long-tail bet.
Bull case for Punks & Squiggles:. 1⃣ As new (high end) money enters NFTs, it will flow to established sets with the least execution risk. 2⃣ Remarkably few crypto-rich people own these collections & really believe they matter. they will capitulate & buy higher, for the culture
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9/ Creator marketplaces are a result of allowing multiple creators to contribute to an end-product, instead of relying on one corporate team to create one. This structure leads to higher quality outputs and product optionality. Nouns Prop House is key infrastructure here!
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memecoins = slots (shiny, easy to understand).coins with fundamentals = poker (DCFs / market share). left-curve loves slots, right-curve loves poker, mid-curve stuck choosing between both.
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An ELI5 Thread on MEV, in the context of in-real-life sneaker trading. There are 2 main types of MEV that directly affect traders:. 1. Front-running.- sandwiching (bad for trader).- JIT liquidity (good for trader, bad for LP). 2. Back-running.- arbitrage (good in general).
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There are broadly two methods of GTM: nonsports and sports. The former is a relatively unexplored space, with several areas to target: crypto, politics, cultural events. Polymarket is the clear nonsports leader, with its GTM mainly focused on political events.
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two tradeoffs related to memecoins deployed on permissionless blockchains are:. 1) inconsistent liquidity seeding -- some may rug-pull after launch, some don't put enough liquidity, others put hidden taxes.2) lack of consensus on which ticker best represents a single meme -- a.
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the best part about using tools like @_kaitoai to reward your community is that manipulating or mass-replicating your social reputation becomes much tougher. in the end, more goes to the users who actually want to become owners.
founders should invest in identifying who your long-term community is, and reward them generously. they'll reward you handsomely in return.
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Americans bet 10x more money on a single Super Bowl (~$23B) than the all-time crypto PM volume (~$2B). Even single States widely surpass the $2B figure. Thesis: more money onchain = more sports betting onchain, just like how the internet bookies took over with phones
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1/ What is the future market cap of all consumer NFTs? What about power laws?. Today we're at around $4B, with $2.5B of that covered by PFPs. This is small compared to the legacy art market which has a $1.5T mcap, and general collectibles, where mcap is also in the trillions.
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People play games because it gives them a certain level of overall utility. overall utility = application utility (how much fun a game is) + financial utility (financial cost or profit of a game).
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A few competitor projects are already live, including @LimitlessExchange on EVM where some markets are offered in ETH, and @HedgehogMarkets on SOL, which has pooled bets ($$ first, odds later). pipeline also includes @DriftExchange, @xMarkets, @InertiaSocial, @Doxa, @Contro.
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New lending protocols:. 1) & 2) @dammfinance & @ribbonfinance are under-collateralized variable rate lending protocols. They're similar in nature to @aaveaave's pooled model, where depositing and lending is frictionless. dAMM currently serves 23 assets, Ribbon to launch soon.
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4) @ArcadiaFi is a lending protocol that allows borrowers to collateralize multiple assets (ERC-20s and NFTs) all at once into a vault. These vaults are NFTs, and thus can be formed into composable 2nd layer products. Lenders can choose their risk appetite based on vault quality.
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Degen idea: on-chain split or steal. users pool some funds and protocol adds an extra prize. - if both say split then both split the pot.- if one says steal and other says split then former gets the whole pot.- if both say steal then both get nothing and all goes to treasury.
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Physical American slot machines brought in $35B in rev in 2023. despite product being:.- much less social (single-player machine).- infinitely less EV (house always wins).- more friction (leave house to play). and still being such huge cash cow = bullish for crypto speculation.
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1/ A quick summary and timeline thread on how various stablecoins performed this weekend:. The entire stablecoin market began to experience significant volatility when Circle announced that SVB was one of the six banking partners that collectively managed ~25% of USDC's reserves.
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11/ One of the benefits of a maturing DeFi ecosystem is that users are able to choose from a variety of yield opportunities dependent on their risk appetite. if you're building something in DeFi, I'd love to chat :).
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Hyperliquid has shown the world that passive liquidity provisioning can be . 1) scalable.2) sustainable.3) profitable.
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Although I love prediction markets from a theoretical perspective, it’s wild to see how mainstream it’s gotten yet actual volumes are so tiny compared to token trading. e.g. Hyperliquid does $10B vol in a single day.
7.5 + the 2.5 from Kalshi PMs roughly ~$10b volume market in 2024.
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