Puff, puff, pump on April 20th! April 16-21


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Loyal Finance Redefined Readers:

Hello i’m andrew My invaluable colleague Andrey, the previous writer of this newsletter, is stepping down from Cointelegraph to build [REDACTED]I’ll leave the news to be written. While I’m thrilled that he’ll take care of the DeFi ecosystem, I’m also angry that there will be another gigabrain trade against me.

Likewise: Journalists quit their jobs to do DeFi stuff. Talk about top signals. While DeFi tokens, and ETH prices in particular, have largely rebounded from the dispepsy-inducing lows, I continue to be upset.

Still the highlights of the week:

4/20 Haze It

In today’s hangover on April 21st, a new group of crypto investors are discovering some cruel market realities. Hopefully they learn to laugh at them.

Yesterday, the Dogecoin community took advantage of some of its growing (albeit likely short-lived) cultural capital and attempted a hostile takeover of 4/20 through “unofficial holidays” – a social media push to wrest the date from stoners and others from renaming it to “Doge Day”.

It worked to some extent: Elon Musk, the meme superstar who happens to run some tech companies, rated some incredulous boomers and found that celebrity sex tape contestant Dave Portnoy had bought a bag himself, the price of that rose quickly. DeFi-er shouldn’t care too much about meme currency aside from its usefulness in predicting larger altcoin runs, but Dogecoin day contained some other pump-and-dump absurdities.

Self-proclaimed DeFi tokens like $ SAFEMOON and $ SHIB peaked in multi-week pumping on April 20, along with projects like $ ASS that followed suit. The moon shots led to some notable stories about guppies growing into whales essentially overnight with poor initial investment:

Then, as always, the other shoe fell off. At the time of writing, $ SAFEMOON is down a whopping 41.95% that day, $ SHIB is in the red 38.48%, and $ ASS looks like ass.

These pump-and-dumps are distinguished for two reasons: How little effort has been put into them and how much interest have they aroused. SAFEMOON offers token incineration and redistribution with every sale. classic pump anomic with little novelty. The benefits of SHIB are still in the development phase, with a DEX and an “artist incubator” in the works (although they … donate something? Somehow? To animal rescue organizations) and contains a companion coin, LEASH, a synthetic rebasing DOGE that nobody needs or requested. I don’t know what ASS does and I refuse to find out.

SAFEMOON in particular has superficial similarities to Bill Drummond’s money trials like $ XAMP and Ponzis with binding curves like $ TRIB, which dominated late last year. I remember this for fun. Everyone knew they were musical chairs that were played for real money, but still immersed in games with the zeal of kindergarten teachers (XAMP’s case, the project came from a pseudonymous developer whose namesake is known for literally burning heaps of money – nobody tried to fool anyone else). It was a series of absurd tricks played in a room that often feels like a fundamentally absurd room.

In contrast, Safemoon has a nifty marketing campaign going on that is likely to involve significant PR effort (a journalist can spot organic narrative; Google Safemoon’s coverage and me tell what you see). Likewise, the sums of money made and lost in the bygone era of Drummond six months ago are anodyne compared to the sea of ​​cash those bastards picked up on April 20th. It’s still fun and games – it’s all a big joke, actually – but investors don’t seem to fully understand.

Ideally, I believe that mass adoption of DeFi could be as beneficial to the advancement of the human species as mass proficiency. However, on days like April 20th, I think this is an unusually efficient mechanism for separating fools from their money.

From Chapter 49 of Moby-Dick, “The Hyena”:

“There are certain strange times and occasions in this strange mixed business we call life when a man thinks this whole universe is a huge practical joke […] And as for small difficulties and worries, the prospect of a sudden catastrophe, danger to life and limb; All this and death itself seem to him just clever, good-natured hits and funny punches on the side given by the invisible and inexplicable old Joker. “

I’ve endured pump-and-dumps. I’ve learned that, like Ishmael’s god, the market often cackles as a predator when he tenderizes your ribs. The best – and maybe just – To stay, you have to cackle right again, smile across the red sea in your portfolio and move on.

I would like to welcome the new group of investors who have taken their first euthanasia roller coaster ride (or are still taking it while SAFEMOON recovers). For you, my stimulus check investing, tik tokking friends! You’re confused, you did it and I hope you stick with it. Avoid rebase games and remember that boring old 10% APY stablecoin farming is always an option.

DeFi is better when you can laugh about it.

What’s wrong with Aave?

Perhaps the biggest story of the week somehow went largely unnoticed: money market and credit giant Aave is considering switching to social media.

The bizarre shift was spiced up for the first time on Saturday by Aave’s official Twitter account:

I immediately got in touch with Aave co-founder Stani Kulechov to confirm the tweet isn’t the work of a lumbering intern celebrating early April 20th. He gave me a brief explanation, the visionary weight of which raises more questions than answers:

“At Aave, we believe in a thesis that interactions in the Web3 area ultimately become finances, whether it be likes, picture sharing or moments. Everything becomes a user-related value that is strengthened with the Aave protocol can. ”

I remember this tortured act in The office Social media features are featured on the Dunder-Mifflin paper company’s sales website. How would it work, what synergy does it have, if any, with decentralized lending, and really? Why?

Aave’s head of integration, Bily Zeller, provided some additional background, suggesting that there would be a pay-per-mail model where interest on deposits could be used to post:

However, this does not necessarily mean the “posts-as-value” model designed by Stani. Right now I’m skeptical: if Stani ever reacts to my DMs, I’ll interview him for more background information. I look forward to being convinced.

Aside from entirely new industries, the log is fired at all cylinders.

Yesterday, Stani teased a picture of the money market with increased returns from Aave token distributions, which is part of the tests for a liquidity reduction program currently running in the Kovan test network:

Aave is already a core layer in many retail and protocol level farming strategies. Adding AAVE token rewards for borrowing and borrowing would increase TVL metrics. I’m a little concerned about the token price (see what Governance Token Rewards did to CRV last year) but I suspect the program could make the ecosystem a lot stronger.

Bright, if sometimes enigmatic, days for the record.

Other big headlines:

Pancakeswap on the rise

Uniswap v3 meets test networks

The rise in CRV could mean shock fruits for high yield farmers