Hello dear readers. I’m Lady PumpNDump and this is my journal. I tell it how I see it, but I’m also a fine, high society English lady. Every once in a while, I journal about a few of the many characters in the crypto space and their machinations. Please enjoy.
As a new round of carnage struck the markets last week, an on-chain sleuth noticed a curious development. Framework Ventures – standard-bearers for an ascendant class of crypto-native, founder-aligned VCs a mere few years ago – were spotted “rebalancing” out of a few million SNX tokens. Lady PumpNDump wonders what happened to the bright-eyed brothers of yore: sworn partners of Portcos and investors on a horizon denominated in decades.
While Her Ladyship is a mere observer, the misanthropes of the metaverse speculate that the carriage of Michael and Vance flew too close to the Kwon. If this tempestuous market has taught us nothing else, this novel paradigm – where VCs are hedge funds and hedge funds are VCs – deserves greater scrutiny. The blessing and the curse of the blockchain – liquidity liquidity liquidity! – has proven too seductive to many a venture capitalist of would-be virtues.
Just as 3AC should not “custody” the treasuries of their Portcos, Framework and its ilk should not manage an active book. One is compelled to ponder which other Portco token-darlings have met a similar fate to Framework’s SNX, but have slipped undetected through the quotidian chaos that is this industry.
Alas, the margin call exists on a different plane from the moral scriptures of humans. And, Her Ladyship’s dear readers would agree, booking a few X on a sliver of a core holding is a prosaic exercise. So, let it be known: Lady PumpNDump wishes shame upon no one - he, she or they. She merely holds them to their own standards.
The Fei protocol commenced its final chapter last week with a proposal – from independent entity Fei Labs – to wind down its flagship stablecoin. Let it be known: Lady PumpNDump commends any good faith experiment in this wretched kingdom. Her Ladyship can forgive multiple instances of haphazard code and protocol design more befitting of our court jester Harold than a project with a billion dollar multisig. However, the events of the few months previous have established that the protocol’s proprietors have no place in this scarcely lawful domain we call Web3.
It would have seemed that Fei’s current predicament could be traced to last year’s union with Rari Capital. The $80 million loss on Rari’s mainnet and Arbitrum deployments earlier this year exposed the inherent tension between a collateralized stablecoin protocol and a permissionless lending market confederated awkwardly and lacking in both a coherent vision and a pro forma creditor hierarchy.
But it may be that the putrescence goes deeper than a poorly conceived merger. Joey decreed that victims should be fully recompensed. The governance proposal affirmed it. But months later, with nary a carrier pigeon in the interim, came a final decree that no one – save for a few profit-capitalizing traders on the inside – saw coming.
Hear ye hear ye, all victims shall be compensated in full, except Olympus, Frax and other DAOs who will instead receive pennies on the dollar. Finally, FEI will be redeemable in full. And oh yes I almost forgot, TRIBE token holders will be cashed out at a premium to spot.
Lady PumpNDump frowns upon the pre-decree trading action. She is similarly disillusioned by yet another sampling of Shakespearean governance. But Her Ladyship is most perturbed by the many micro-instances of apparent greed. Team-controlled liquidity flowing out of Rari contracts. Team TRIBE tokens continuing to vest during months of inaction. An uneven compensation plan that triggered an extraordinary occurrence: a founder calling out another founder for running a racket.
Her Ladyship contends that for a kingdom under siege, communications should be the currency valued at a premium - not tokens.
No entity this side of chaotic neutral confounds more than the Flashbots organization. The syllogistic contortion required to understand MEV and Flashbots’ role in it all causes our court jester Harold to tie his arms behind his back, stick his head under his legs and jump up and down until he is restrained by the guards.
Are they protecting users from value extraction or pronouncing the inevitability of that value extraction? Are they providing a vessel for transparency, for censorship, or for transparent censorship? The recent developments pertaining to Tornado Cash, USDC and staking providers at various points on the decentralization spectrum have resurfaced essential questions about what exactly is going on and where exactly things are going. Lady PumpNDump is a scribe and not a logician nor a technician so she gratefully defers to those in the know.
In the last week, posts from Banteg and Micah have laid bare the values-centric conundrum facing Flashbots and others. Voluntary and monocratic submission to the OFAC regime: justifiable legal compliance or cowardly acquiescence?
Nothing in this byzantine ecosystem is black and white. Her Ladyship scorns absolutists, but she brings with her a lesson from the battlefield: overestimate your enemy and cosign your defeat.
Until next time.
Yours truly,
Lady PumpNDump