The Whale Who Was Up $100 M: Why I’m Leaving HyperLiquid
Protocol Survived, Users Didn’t I just made a personal—and painful—decision: I will no longer trade on HyperLiquid. I’m not calling for a boycott; I’m simply following the drift of my own values. After clearing $95 M on HL—and crossing nine figures across venues—my P&L is still positive this year. But on 10 October I lost $62 M in a single liquidation cascade. That day showed me the industry has out-grown its “hope and prayer” risk architecture.What Actually Happened on 10·10Binance’s interna...
From Meta to Blockchain Rising Stars: The Rise of Sui and Aptos
In recent years, the cryptocurrency market has experienced explosive growth. The success of mainstream cryptocurrencies like Bitcoin and Ethereum has attracted widespread attention from global investors. Emerging projects continue to emerge, offering a variety of investment opportunities. Investors are attracted by their high potential for returns, while also being aware of the market's high volatility and risks. Sui and Aptos are two blockchain projects that have recently garnered significan...
When the “Infinite-Ammo” mNAV Flywheel Reverses: Hidden Sell-Side Risks in the Crypto-Treasury Narra…
Executive Summary Treasury-driven alt-coins have turbo-charged this bull run. Ethereum has risen from US$1 800 to US$4 700 (+160 %) as listed “mini-MSTRs” like SBET and BMNR relentlessly buy ETH. Solana, BNB and HYPE have spawned copy-cat treasuries of their own. But the same flywheel that lifts prices can spin backwards. WINT—once a BNB-treasury poster-child—was delisted by Nasdaq and fell 91 %. Lion Group just trimmed US$500 k of its own HYPE stack. If mNAV (market-to-NAV ratio) drops below...
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The Whale Who Was Up $100 M: Why I’m Leaving HyperLiquid
Protocol Survived, Users Didn’t I just made a personal—and painful—decision: I will no longer trade on HyperLiquid. I’m not calling for a boycott; I’m simply following the drift of my own values. After clearing $95 M on HL—and crossing nine figures across venues—my P&L is still positive this year. But on 10 October I lost $62 M in a single liquidation cascade. That day showed me the industry has out-grown its “hope and prayer” risk architecture.What Actually Happened on 10·10Binance’s interna...
From Meta to Blockchain Rising Stars: The Rise of Sui and Aptos
In recent years, the cryptocurrency market has experienced explosive growth. The success of mainstream cryptocurrencies like Bitcoin and Ethereum has attracted widespread attention from global investors. Emerging projects continue to emerge, offering a variety of investment opportunities. Investors are attracted by their high potential for returns, while also being aware of the market's high volatility and risks. Sui and Aptos are two blockchain projects that have recently garnered significan...
When the “Infinite-Ammo” mNAV Flywheel Reverses: Hidden Sell-Side Risks in the Crypto-Treasury Narra…
Executive Summary Treasury-driven alt-coins have turbo-charged this bull run. Ethereum has risen from US$1 800 to US$4 700 (+160 %) as listed “mini-MSTRs” like SBET and BMNR relentlessly buy ETH. Solana, BNB and HYPE have spawned copy-cat treasuries of their own. But the same flywheel that lifts prices can spin backwards. WINT—once a BNB-treasury poster-child—was delisted by Nasdaq and fell 91 %. Lion Group just trimmed US$500 k of its own HYPE stack. If mNAV (market-to-NAV ratio) drops below...
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The core of the buy now pay later appeal is to solve the current shortage of funds by overdrawing future consumption capacity. This payment scenario has also extended from web2 to the web3 world. In order to meet the consumption habits of Generation Z, web3 builders have also begun to apply this payment method to the NFT field, including Cyan, Cedar, Teller and other products.
The model of BNPL products is basically similar. Take Cyan, a representative product in the BNPL protocol, as an example:
a. Cyan will list the blue chip projects they recognize as whitelist projects.
b. Then the player initiates a BNPL plan on Cyan to purchase NFTs currently on the Cyan whitelist.
c. Next, Cyan provides users with an installment payment plan, including the term and interest rate of the installment repayment. Under the BNPL model, buyers only need to pay a certain down payment to lock the price of the NFT for three months. If the price of NFT rises during the process, you can repay in advance to earn the difference in the increase. However, the interest will not be reduced, and users still have to complete the payment according to the agreed plan.
d. After the player accepts the plan, he will receive ETH from the Cyan fund. When all installments are completed, the NFT will be transferred to the address. If the overdue payment is considered a default, the NFT will be retained in the Cyan fund for liquidation.
e. Regarding Cyan's profit model, it is mainly through lending services, and users pledge NFTs to obtain loans.
BNPL is a very attractive solution for Generation Z, who have weak consumption power but strong consumption willingness. The overall gameplay is currently relatively monotonous, basically a BNPL+lending model. And its lending has a strong demand for pricing and valuation, such as Cedar's cooperation with SPICYEST to provide accurate prices for NFTs. At present, Cyan is in a leading position in the NFT BNPL sub-market, and the gameplay of various competitors is relatively similar, such as Teller's ANPL, Ceda and Pine Loans and Halliday.
As a financial infrastructure, lending has broad development space. The core mechanism of NFT lending is to use NFT as collateral to obtain loans. The most core element is risk control, which requires the market to have a consensus on the price of NFT. Since the current pricing and valuation projects are relatively early, risk control is mainly carried out from two aspects: project type (blue chip) and loan value ratio (Loan to Value). Like defi, lending is also a relatively early project type in NFTFI. Currently, NFT lending projects include: BendDAO, NFTfi, JPEGd, Pine Protocol, Arcade xyz, etc. At present, NFT lending can be mainly divided into two types: peer-to-peer and peer-to-pool.
Peer to peer
a. The borrower places an order to show his needs, and then the lender browses all the borrowing needs on the platform, selects the intended order and negotiates the interest rate and term with the borrower to complete the loan.
b. When the loan is repaid as scheduled, the NFT is returned to the original owner; if it cannot be repaid, the NFT belongs to the other party.
Currently, NFTfi and Arcade xyz use a peer-to-peer mechanism.
Peer to pool
a. After NFT holders pledge NFT, they can get a loan, which is similar to the logic of Aave and Compound in defi. Funds are borrowed through over-collateralization, and interest needs to be paid at the same time.
b. Borrowers inject currency to obtain interest.
Currently, BendDAO, JPEGd and Pine Protocol use a peer-to-peer mechanism.
Among them, JPEGd's design is similar to MakerDAO, which mints PUSD (over-collateralized stablecoin) by pledging NFT for circulation and use.
Peer to peer and peer to pool comparison
Peer to peer lending:
a. Advantages: wider lending range, no need to rely on oracles.
b. Disadvantages: longer transaction cycle and low efficiency.
Peer-to-pool lending:
a. Advantages: high efficiency
b. Disadvantages: NFT rarity is underestimated; when the market is not good, lenders panic collectively, resulting in liquidity depletion, which can easily form a death loop.
For example, the bank run phenomenon of BendDAO in August, a large number of NFTs faced liquidation, and because the liquidation threshold was very close to the low price, no one was willing to buy. Users frantically withdrew liquidity, and ETH deposits once plummeted from 15,000 ETH to 12.5 ETH. Later, BendDAO urgently initiated a vote to shorten the auction time from 48 hours to 4 hours, and cancelled the first bid limit of 95% of the reserve price, and gradually began to recover.
From the data on Dune, we can see that in the current NFT lending market, NFTFi accounts for 58%, BendDAO accounts for 32%, and other types account for about 10%. In general, NFTFi and BendDAO, as the leaders of peer-to-peer and peer-to-pool, still occupy an absolute leading position.
In general, the development of NFT lending is closely related to the overall market of NFT on the one hand, and is also closely related to the development of pricing and valuation projects on the other hand. Since the development of pricing and valuation is still in its early stages, the current peer-to-peer project NFTfi is in a more leading position. However, with the development of various oracles, peer-to-pool also has a lot of room for growth. But overall, due to the large price fluctuations and difficult pricing, the market still accounts for a small proportion of NFT lending. If NFT lending wants to develop rapidly, it is basically strongly bound to NFT pricing and valuation.
NFT financial derivatives are mainly divided into two categories: option contracts and prediction markets.
a. Option contracts: Similar to traditional options, the option issuer creates the right to buy or sell NFTs at a certain strike price at a certain time and charges option fees. The buyer of the option pays the premium to buy or sell NFTs at the strike price before the agreed date. Projects include: Nifty Option, Putty, Hook, OpenLand, etc.
i. At the same time, perpetual contract projects have also been derived. Similar to FT perpetual contracts, there is no fixed delivery date. The contract price and spot price are anchored by funding fees. When the futures price is higher than the spot price by a certain value, the long party pays the short party (or the long party's handling fee increases and the short party's handling fee decreases); conversely, the short party pays the long party. Projects include: NFTperp, injective.
b. Prediction market: a new way of playing, prediction and betting through mint, secondary and rental of NFT. For example, in this Qatar World Cup, if you think the German team will win, you can mint/secondary purchase/rent the German team NFT, and finally distribute the bonus according to the winning situation or holding time of the NFT. For example, Reality Cards, the bonus is distributed by holding the corresponding NFT for a certain period of time; and like OKX, it is distributed according to the winning situation of each game in the World Cup and the proportion of NFT in the bonus pool.
Derivatives are relatively mature in the traditional financial market. Currently, the gameplay of NFT is basically just changing the underlying assets, and there are no new breakthroughs. At present, NFT derivatives are still in a very early stage. NFTperp is still in the test network stage, and the transaction volume of putty is also in the double digits. All types of projects are in the early stages. It is difficult to have explosive growth before the NFT liquidity and deposit valuation system are improved. Projects like prediction markets are fresh gameplay and a new model brought by NFT. If we make good use of major events such as the World Cup and the Olympics, there will be some innovative imagination space in the future.
The core of the buy now pay later appeal is to solve the current shortage of funds by overdrawing future consumption capacity. This payment scenario has also extended from web2 to the web3 world. In order to meet the consumption habits of Generation Z, web3 builders have also begun to apply this payment method to the NFT field, including Cyan, Cedar, Teller and other products.
The model of BNPL products is basically similar. Take Cyan, a representative product in the BNPL protocol, as an example:
a. Cyan will list the blue chip projects they recognize as whitelist projects.
b. Then the player initiates a BNPL plan on Cyan to purchase NFTs currently on the Cyan whitelist.
c. Next, Cyan provides users with an installment payment plan, including the term and interest rate of the installment repayment. Under the BNPL model, buyers only need to pay a certain down payment to lock the price of the NFT for three months. If the price of NFT rises during the process, you can repay in advance to earn the difference in the increase. However, the interest will not be reduced, and users still have to complete the payment according to the agreed plan.
d. After the player accepts the plan, he will receive ETH from the Cyan fund. When all installments are completed, the NFT will be transferred to the address. If the overdue payment is considered a default, the NFT will be retained in the Cyan fund for liquidation.
e. Regarding Cyan's profit model, it is mainly through lending services, and users pledge NFTs to obtain loans.
BNPL is a very attractive solution for Generation Z, who have weak consumption power but strong consumption willingness. The overall gameplay is currently relatively monotonous, basically a BNPL+lending model. And its lending has a strong demand for pricing and valuation, such as Cedar's cooperation with SPICYEST to provide accurate prices for NFTs. At present, Cyan is in a leading position in the NFT BNPL sub-market, and the gameplay of various competitors is relatively similar, such as Teller's ANPL, Ceda and Pine Loans and Halliday.
As a financial infrastructure, lending has broad development space. The core mechanism of NFT lending is to use NFT as collateral to obtain loans. The most core element is risk control, which requires the market to have a consensus on the price of NFT. Since the current pricing and valuation projects are relatively early, risk control is mainly carried out from two aspects: project type (blue chip) and loan value ratio (Loan to Value). Like defi, lending is also a relatively early project type in NFTFI. Currently, NFT lending projects include: BendDAO, NFTfi, JPEGd, Pine Protocol, Arcade xyz, etc. At present, NFT lending can be mainly divided into two types: peer-to-peer and peer-to-pool.
Peer to peer
a. The borrower places an order to show his needs, and then the lender browses all the borrowing needs on the platform, selects the intended order and negotiates the interest rate and term with the borrower to complete the loan.
b. When the loan is repaid as scheduled, the NFT is returned to the original owner; if it cannot be repaid, the NFT belongs to the other party.
Currently, NFTfi and Arcade xyz use a peer-to-peer mechanism.
Peer to pool
a. After NFT holders pledge NFT, they can get a loan, which is similar to the logic of Aave and Compound in defi. Funds are borrowed through over-collateralization, and interest needs to be paid at the same time.
b. Borrowers inject currency to obtain interest.
Currently, BendDAO, JPEGd and Pine Protocol use a peer-to-peer mechanism.
Among them, JPEGd's design is similar to MakerDAO, which mints PUSD (over-collateralized stablecoin) by pledging NFT for circulation and use.
Peer to peer and peer to pool comparison
Peer to peer lending:
a. Advantages: wider lending range, no need to rely on oracles.
b. Disadvantages: longer transaction cycle and low efficiency.
Peer-to-pool lending:
a. Advantages: high efficiency
b. Disadvantages: NFT rarity is underestimated; when the market is not good, lenders panic collectively, resulting in liquidity depletion, which can easily form a death loop.
For example, the bank run phenomenon of BendDAO in August, a large number of NFTs faced liquidation, and because the liquidation threshold was very close to the low price, no one was willing to buy. Users frantically withdrew liquidity, and ETH deposits once plummeted from 15,000 ETH to 12.5 ETH. Later, BendDAO urgently initiated a vote to shorten the auction time from 48 hours to 4 hours, and cancelled the first bid limit of 95% of the reserve price, and gradually began to recover.
From the data on Dune, we can see that in the current NFT lending market, NFTFi accounts for 58%, BendDAO accounts for 32%, and other types account for about 10%. In general, NFTFi and BendDAO, as the leaders of peer-to-peer and peer-to-pool, still occupy an absolute leading position.
In general, the development of NFT lending is closely related to the overall market of NFT on the one hand, and is also closely related to the development of pricing and valuation projects on the other hand. Since the development of pricing and valuation is still in its early stages, the current peer-to-peer project NFTfi is in a more leading position. However, with the development of various oracles, peer-to-pool also has a lot of room for growth. But overall, due to the large price fluctuations and difficult pricing, the market still accounts for a small proportion of NFT lending. If NFT lending wants to develop rapidly, it is basically strongly bound to NFT pricing and valuation.
NFT financial derivatives are mainly divided into two categories: option contracts and prediction markets.
a. Option contracts: Similar to traditional options, the option issuer creates the right to buy or sell NFTs at a certain strike price at a certain time and charges option fees. The buyer of the option pays the premium to buy or sell NFTs at the strike price before the agreed date. Projects include: Nifty Option, Putty, Hook, OpenLand, etc.
i. At the same time, perpetual contract projects have also been derived. Similar to FT perpetual contracts, there is no fixed delivery date. The contract price and spot price are anchored by funding fees. When the futures price is higher than the spot price by a certain value, the long party pays the short party (or the long party's handling fee increases and the short party's handling fee decreases); conversely, the short party pays the long party. Projects include: NFTperp, injective.
b. Prediction market: a new way of playing, prediction and betting through mint, secondary and rental of NFT. For example, in this Qatar World Cup, if you think the German team will win, you can mint/secondary purchase/rent the German team NFT, and finally distribute the bonus according to the winning situation or holding time of the NFT. For example, Reality Cards, the bonus is distributed by holding the corresponding NFT for a certain period of time; and like OKX, it is distributed according to the winning situation of each game in the World Cup and the proportion of NFT in the bonus pool.
Derivatives are relatively mature in the traditional financial market. Currently, the gameplay of NFT is basically just changing the underlying assets, and there are no new breakthroughs. At present, NFT derivatives are still in a very early stage. NFTperp is still in the test network stage, and the transaction volume of putty is also in the double digits. All types of projects are in the early stages. It is difficult to have explosive growth before the NFT liquidity and deposit valuation system are improved. Projects like prediction markets are fresh gameplay and a new model brought by NFT. If we make good use of major events such as the World Cup and the Olympics, there will be some innovative imagination space in the future.
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