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An NFT Insider's Journey, Looking Beyond the Crypto Bubble & Defi Options - the Next Big Thing ?
The Web Three Newsletter | Dec 28, 2022
We curate and summarize three key opinion pieces or industry updates from the world of crypto, weekly
This week, we take a look at:
1️⃣ "The NFT Insider": An Interview with GMoney | Episode on Web3 breakdowns
2️⃣ Beyond the Bubble : How Crypto Can Bring Trust Back to the Financial System | Blog Post by David Z. Morris, CoinDesk's chief insights columnist
3️⃣ DeFi Options: The Next Big Thing or Just Hype? | Tweet thread by Virtual Kenji
Section1️⃣-"The NFT Insider": An Interview with GMoney
From CryptoPunks to Adidas collaborations, here’s the journey of this leading NFT enthusiast
This is a summary of a podcast with GMoney, a well-known figure in the NFT community and founder of ‘Admit One’, a community focused on driving innovation in the space. In this podcast, he shares his journey in the world of cryptocurrency, his experience as a trader, and his thoughts on the future of NFTs.
GMoney's Crypto Story 🚀
GMoney first entered the world of cryptocurrency in 2017, but sold his assets in Q1 2018 because he believed the technology wasn't quite ready yet. He returned to the crypto world in 2020, when he became interested in NFTs after playing Fortnite and seeing players spend large sums of money on in-game skins.
This sparked his interest in NFT projects, and he eventually came across CryptoPunks, a digital collectible created by Larva Labs in 2017. He purchased a CryptoPunk for 140 ETH (Ethereum) in January 2021 and wrote a tweet thread about it, which gained a lot of attention and helped solidify his reputation in the NFT space.
Since then, he has transitioned to working full-time in the NFT industry, building the Admit One community and launching his own crypto-native luxury clothing brand, 9dcc. He's even teamed up with Adidas to bring the brand into the Web3 world.
His Investing Philosophy 📈
As a trader, GMoney believes that one of his strengths is his willingness to learn from anyone, which has allowed him to be successful in various markets and sectors.
He's had success in the crypto, decentralized finance (DeFi), and NFT spaces, and attributes this to his curiosity and his willingness to learn about new technologies and industries. His advice to others is to not be afraid to try new things, but also to be mindful of their risk tolerance and not bet the farm on any one investment.
The NFT Boom 💣
So, what's behind the sudden surge in popularity of NFTs? According to GMoney, it's a combination of free and easy money being available, the scarcity and deflationary nature of digital assets, and the right story being told at the right time.
He also believes that bubbles in any asset class occur because people are convinced that the technology or asset will change the world, leading to valuations getting ahead of themselves.
However, GMoney thinks the technology behind NFTs is here to stay and will change our lives in the long term. He expects the NFT market to continue to grow and mature, with more companies and brands entering the space and developing long-term plans.
The Adidas Collaboration 🏆
GMoney shares the story of how the collab with Adidas came about, stating that he was first approached by someone from the brand's Web3 team in April of the previous year. Despite initially not being sure if the person was actually from Adidas, he agreed to chat and the two ended up having long conversations about the potential for collaboration.
He was excited about the possibility of a company like Adidas helping to onboard the masses to the world of NFTs. The relationship continued to evolve, and he eventually met with senior-level people at Adidas' headquarters, confirming that the collaboration was the real deal. He believes that Adidas' entry into the NFT space will be a catalyst for other major brands to follow suit.
On DAOs and Governance 🧑💼
GMoney also discusses his views on distributed autonomous organizations (DAOs) and governance in the NFT space. He believes that DAOs will play a significant role in the NFT market and will help to democratize the decision-making process.
He also thinks that it's important for NFT projects to have clear and transparent governance structures in place, as it helps to build trust and foster a sense of ownership among community members.
Overall, this interview with GMoney offers a unique perspective on the current state and future of the NFT market. If you're interested in learning more about NFTs and the role they're playing in the world of cryptocurrency, be sure to give this podcast a listen.
📙 Check out the full episode here on Web3 breakdowns
Section2️⃣- Beyond the Bubble : How Crypto Can Bring Trust Back to the Financial System
The potential for cryptocurrency to create transparent, open systems and solve real-world problems
Key points from the article titled “There's Less Money in Crypto, and That's a Good Thing”, by David Z. Morris, CoinDesk's chief insights columnist.
💡 The Root Cause of Crypto's Struggles
The mainstream media has missed the real reason behind the struggles in the crypto space over the past year. Rather than being issues with cryptocurrency itself, the problems have largely been caused by financial engineering and fraud.
These issues have often been carried out by finance bros looking to turn the future value of crypto systems into present-day U.S. dollars through risky leverage and a lack of transparency.
🚫 Finance Bros vs. Real Builders
As the finance bros and token ‘shillers’ take a back seat, the real builders and developers of cryptocurrency will take center stage in 2023. The focus will shift from speculation and hype to creating accessible, reliable tools with real-world demand and the ability to generate revenue. This will involve less emphasis on new tokens and more on leveraging existing blockchain ecosystems to build services that truly require the benefits of decentralization.
💰 The Perverted Role of Finance
The role of finance has become distorted in the 21st century, with a focus on timing bubbles and tricking investors rather than supporting long-term growth. This is not just a problem in the crypto world, but a widespread issue across many sectors. The overvaluation and underdevelopment of companies, as well as the proliferation of rotten corporate cultures, has led to a lack of trust in business and the financial system as a whole.
🌍 Crypto's Potential to Bring Positive Change
Crypto has the potential to restore trust and bring about positive change by creating open, transparent systems. It has already shown promise in areas such as cross-border payments and digital identity. In order to reach its full potential, the crypto industry must prioritize substance over hype and build solutions that address real-world problems.
📙 Read the full article here on Coindesk Opinion
Section3️⃣- DeFi Options: The Next Big Thing or Just Hype?
A Data-Driven Look at the Potential of DeFi Options
Here’s a summary of an excellent twitter thread titled “Are DeFi Options the next big DeFi Narrative?” by @VirtualKenji.
🤔 Is DeFi Options the Next Big DeFi Narrative?
As DeFi continues to mature, many have suggested that options could be the next big narrative within the space. However, on-chain data suggests otherwise. What gives?
To verify this claim, the author looked at a few different metrics: options open interest from Coin Glass, total value locked (TVL) in various DeFi options protocols, and social sentiment data from Lunar Crush. Here's what they found.
📈 Options Open Interest
Open interest (OI) is a measure of the number of open contracts in a market. Typically, higher OI corresponds to more activity in a market. While the data we looked at is primarily from centralized exchanges (CEXs), it does show that ETH options open interest has been steadily increasing this quarter. In contrast, ETH futures open interest has been trending downwards from its December 2021 highs.
📉 TVL in DeFi Options Protocols
While there may be growing demand for options on CEXs, this demand doesn't seem to be reflected on-chain in DeFi yet.
The author looked at the TVL of four larger DeFi options protocols: Dopex, Ribbon, Opyn, and Premia. The TVL for all four of these projects has been steadily decreasing since the May crash. This is in contrast to the TVL of GMX and GNS, which have shown a clear upward trend in TVL over the past few months.
📊 Social Sentiment
Despite the lack of on-chain activity, there seems to be a lot of chatter on social media about DeFi options potentially being big in 2023.
Lunar Crush data supports this, showing that the social activity around DPX has been trending upwards in the past month.
🤔 Bull and Bear Cases
There are a few bull cases for DeFi options as the next narrative:
It's possible that demand for DeFi instruments will mirror demand for traditional finance (TradFi) instruments. As markets mature, demand for complex instruments like derivatives tends to outpace demand for simpler instruments like spot. This has certainly been the case in crypto so far, and it's possible that the demand for perpetuals has peaked, paving the way for options to be the next big thing.
The increase in options open interest on CEXs could be a sign of things to come in DeFi.
The social chatter and data around DeFi options is bullish.
However, there is also a bear case to consider:
For PerpDEXs, an increase in TVL came before the narrative. But for DeFi options, the narrative is here before an increase in TVL. There aren't any clear on-chain catalysts for options in DeFi yet.
Ultimately, while there may be more bull cases for DeFi options as the next narrative, the lack of TVL is a significant concern. It's worth considering where the bullish theses for DeFi options are coming from, and whether they are supported by on-chain data.
📙 Read the complete analysis in this tweet thread by @VirtualKenji
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