Part time : investor, Auditor, content creator. /////// Full time : Crypto
Joined March 2023
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RedTiger retweeted
For the past 6 months, I’ve been using my free time to build Yellowcake Analytics, a free resource about the uranium industry. Everyday it ingests new filings and announcements from dozens of miners.
If you’re getting up to speed on the uranium trade, it’s a great place to start
RedTiger retweeted
Every day DIEM holders let real money evaporate.
Each staked DIEM gives you $1 of Venice inference per day. Use it or lose it. Most of it goes unused.
I built a marketplace where that idle allowance is sold instead of burned. Holders earn USDC and buyers get Venice cheaper.
Meet Gondola 🛶
Seriously, USDe transitioning from the cash-and-carry trade to a more hedge fund-like model is sneaky...
A lot of actors made assumptions early on, and won't change them.
And that's how some people are going to get rekt.
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The moat of a stablecoin = the number of independent actors who must choose to switch.
Barring any regulatory ban, USDT will never be dethroned.
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Not a word for STRC holders...
UST vibes are real.
Volatility tests every capital structure. Strategy remains focused on Bitcoin, disciplined capital allocation, credit quality, and long-term value creation. We appreciate our investors and will continue to execute with transparency and resolve. $MSTR
RedTiger retweeted
Authority bias is the most important trait in crypto for making it.
Vitalik's proposal goes in the right direction. A way for normal folks to get leveraged exposure
- without the constant risk of liquidation of perps.
BUT, it still suffers from
- constant recurrent fees (rolling the options)
- path dependance
- does not strictly track the price of the underlying
On Sir we have an even more sophisticated version of it that achieves everything Vitalik wishes for, but we are not in the cabal of crypto influencers and we don't make it into podcasts🤷♂️.
This Vitalik's 2016 Reddit post gave core idea for Uniswap:
'Let's run on-chain decentralized exchanges the way we run prediction markets'.
Hayden then built it and DEXs became core infra of DeFi where price discovery happens, LPs farm, and ppl can trade without KYC.
What if the new idea by Vitalik becomes a new Uniswap? Or in this case Aave?
He proposes DeFi without liquidations, built on options instead of debt.
How it works in practice:
Today on Aave you deposit 1 ETH at $1.5k and borrow $1k USDC.
If ETH dumps too much (likely lol), a bot sells your ETH with a penalty.
The whole system depends on real-time oracles being correct every second. Late liquidations incur bad debt.
In Vitalik's design your 1 ETH splits into two tokens: a 'stable dollars' token and an 'ETH upside' token.
- Borrowing: sell the stable token for cash, keep the upside token.
If ETH dumps you just lose the upside. No liquidation bot and no penalty
- Stablecoin: hold the stable token.
Worst case it slowly turns back into ETH rather than depegging overnight
- Leverage: buy the upside token. Max loss is what you paid and you can't get liquidated
It works like buying a call option: you pay once upfront, that payment is the most you can ever lose, and a temporary price wick can't liquidate you since only the price at expiry counts.
The two tokens always add up to 1 ETH, so the protocol can't end up with bad debt.
And the price oracle is only checked once at expiry so slow prediction-market style oracles are enough, no real time price feeds.
Since positions expire you have to roll them. But this creates new DeFi products like Pendle-ish vaults that automate the rolling for a fee.
This design removes cascading liquidations from DeFi lending.
Gotta keep an eye on it.
RedTiger retweeted
Extremely satisfying to see Vitalik pitch what is essentially Sir Trading. Let us address Vitalik's proposal and compare it to us.
What if the use options as the base of defi, instead of CDPs and liquidations?
On Sir, traders pay a one-time fee, just like in options. There are no liquidations.
Instead your exposure to the index diverges quadratically from your preferred exposure in a smoother way.
This is exactly how our leveraged tokens work. Notice from the chart below that our ETH² does not decay over time (still went down because price of ETH went down oc). If you check 2 time instant with the same ETH price, you will notice that ETH² also preserves the price.
A key benefit is getting rid of the need for instant oracles, and instead making everything work on top of "slow oracles"
Precisely, we use 30-min TWAPs.
This design has a significant downside - the need to do regular rebalancing - and an open question of whether and how this rebalancing can be made slippage-resistant enough. But it's worth considering and trying IMO.
We have actually fixed this part. We fixed by adding more flexibility in the contract between traders and LPers. Instead of performing actual leverage rebalancing, we derived the formula if the leverage was maintained perfectly constant, and just recalculate amounts when someone enters or exits a position.
Building index-tracking assets on top of options instead of debt
ethresear.ch/t/building-inde…
What if the use options as the base of defi, instead of CDPs and liquidations? So instead of extreme price movements creating a sharp and global "you get liquidated" effect, instead your exposure to the index diverges quadratically from your preferred exposure in a smoother way?
A key benefit is getting rid of the need for instant oracles, and instead making everything work on top of "slow oracles" (ie. the type that prediction markets use)
This design has a significant downside - the need to do regular rebalancing - and an open question of whether and how this rebalancing can be made slippage-resistant enough. But it's worth considering and trying IMO. I would feel much safer holding algostables inside something like this, than in something that depends on an oracle that has to give real-time answers (and therefore could be tricked into giving wrong real-time answers with no time for human recourse).
Special thanks to @TokenBrice for the article that was the inspiration for this thread and to the @leveragesir SIR Trading Team for developing such an innovative product.
In my opinion, it’s awesome but could benefit from additional security audits.
PS : Market cap of 145K...
Let’s simulate the results for the ETH/USDC^1.5 pool.
If you deposit 1 ETH and the price doubles, you’ll end up with 1.17 ETH.
If it triples, you’ll have 1.43 ETH.
If it quadruples, you’ll get 1.65 ETH. Moreover, there’s enough liquidity in this pool.
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Still, it may be one of the best ways to accumulate SIR if you’re bullish on this token’s future.
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Ready to give it a shot?
Check out the vaults that match your market outlook—bullish, bearish, or somewhere in between.
For the most degen, there’s the ^5 SIR/ETH Vault. Be careful, though: the saturation price is only about 20% away from the current price.
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For now, and possibly forever, ^5 vaults leverage is not sustainable long-term.
Once the price increases significantly and reaches the saturation price, the leverage starts to decrease.
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One major risk is liquidity. High-level exponential vaults (like ^5) require ample liquidity.
That’s where SIR incentives come into play—attracting capital so even high-octane strategies can function. However, proceed with caution!
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Top vaults like ETH/USDC^1.5 have healthy liquidity (e.g., 107 WETH) and organic usage.
Security matters: if all goes well, the protocol transitions to “Unstoppable” mode.
If something goes wrong first, devs can pivot to “Emergency” and then “Shutdown.”
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Prefer to LP? Become a Gentlemen.
You’ll earn a share of APE fees in the same token you supply—autocompounded.
Incentivized vaults also offer extra SIR rewards, sweetening that consistent revenue stream.
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