I’ve never been one to write in a blog-related style nor share much regarding personal situations. I don’t believe my experiential position is adequate for telling truly insightful stories. Nevertheless, some thoughts are due for the markets and what I want to be writing about in the near future.

Macro

The Macro looks bad but won’t be as bad as it seems.

I’ve never been a macro person — opting into the very grounded and very self-righteous belief that macroeconomists are always right in the direction but never on the timing. Frankly, I don’t believe anyone ever gets it right on timing hence firms that make themselves out to be armchair anthropological gods do little to actually profit vs everyone else but certainly get the most invitations to be on television and present in economic conferences. Since the dawn of COVID unfortunately the markets have largely been beholden to macro events with everyone's eyes glued to FOMC meeting notes trying to understand how they can one-up the US central bank as it decides whether to shoot themselves in the heart or the lungs.

Bottom line is that the free money era is currently in steep decline, interest rates will continue to climb and growth + sectors that relied on printing will continue to decline at the pace of rapid spikes down followed by temporary relief spread throughout. The question is no longer when the fed will turn hawkish but whether that hawk is a wild beast or from a zoo (my bet is on the zoo). Neither outcome is good. I don’t foresee the next 8 months being a good environment to DCA into your favourite tech companies that are -80%. However, if you are a legitimate practitioner from the house of DCA — please continue to buy into real companies with real cashflows: Google, Apple, Amazon, and Microsoft. My personal bet on Palantir is listed because this is my article, but also the pending geopolitical state of the world supports Palantir in making a boatload of money.

As I am not a macro expert, there are currently a few narratives being watched by people far smarter than I: The corporate debt crisis, the potential collapse of the European Central Bank and EU, and apparently auto loans are having their own “08 moment”.

My belief in markets overall remains positive, yes the next year or maybe two will continue to be bad and we can let the macro traders continue partying on but eventually, we will make it to the next bull cycle where everything will be good again. Stack cash right now and be ready to hunt once Spring comes back.

TL;DR: Times are bad but get a job and try to make as much cash as possible. Get the cash ready to buy severely depreciated assets, you can DCA or wait a few months to see if the market is ready to stop imploding from government incompetence.

Defi Opportunities

Back to the actual world of crypto. I actually see a great opportunity to buy heavily depreciated Defi governance tokens in projects that have proven utility or mechanisms that can support scale without ponzinomics like Terra. Here is my list and the prices at the time of writing (ToW), they also have quite good tokenomics given that FDV isn't a multiple higher than 2:

1. Convex Finance ($50 peak → $7.80 ToW)

2. Compound ($854 peak → $55.83 ToW)

3. Aave ($632 → $90.06 ToW)

4. Maker ($6012 → 986.82 ToW)

The reasoning is quite simple: TradFi wants into crypto, hell crypto-natives are racing to create funds and aching to deploy capital at new generational lows. The first gateway to enter will be Defi projects, particularly the governance tokens. The listed projects all have great Mcap:FDV ratios, working projects with functional utility, and also funds like power, so getting to vote on proposals is their view of “bettering the ecosystem” through their involvement.

I haven’t looked deeply into each whitepaper to figure out whether the value capture happens exactly at the protocol or token level, frankly, I’m a bit lazy to validate this hunch too much but I want to put this into writing as an obvious trade and will gather more evidence down the line. See you in 2024.

NFTs

Surprisingly NFTs haven’t completely died yet. I had an interesting thesis I wanted to witness: In the instance that the underlying asset such as ETH or SOL depreciates heavily, would the NFT price rebase into dollars or remain priced in crypto? To put it into English, would a monkey Jpeg worth 100 ETH = $400,000 given that ETH is $4000 still be priced at the $400,000 tag if ETH declines to $1000 or remain at 100 ETH? As we can see from the graph below on BAYC floor prices from the last 90 days

Prices did fall from a high of 149E to their current floor at 88E, but it's holding consistent

Price of ETH during the same time period,

This is actually quite fascinating as it disproves that NFTs were by nature purely speculative vehicles and community forces indeed lend a perception of value. Apes together = strong.

Yes, the dollar value fell in conjunction with the fall in price on ETH but the fact that NFTs didn’t go to 0 immediately proves that they aren’t simply a leverage slider on crypto but actually might hold on their own as an asset class that currently traces its underlying asset. Does the same apply to non-blue chips or new kids on the block such as Azuki?

Azuki also had a near 50% drop, also holding the line

I won’t look at every collection on OpensSea but here is Moonbirds as well

30E peak to currently 22E

The conclusion was that we saw declines but the declines in NFTs weren’t amplitudes above their underlying asset. Certain collections even have spikes in price based purely on community speculation and independent trading patterns that disregard the performance of crypto. The only firm conclusion I can say at this stage is that NFTs are certainly going nowhere and will definitely come back stronger next cycle. As to whether they will stand as a flight for capital preservation during an apocalyptic event or worse; an extended bear market is too soon to tell.

Hubris vs Conviction

We had a few instances of complete Hubris that I found incredibly valuable as learning opportunities.

The implosion of 3AC which used non-collateralized loans to margin long crypto to their demise and the creditors that were brave enough to lend hundreds of millions to billions of customer funds is an insane yet exemplary example of the confidence game.

This was not the only example nor the first of its kind, it led me to wonder the following question:

Where is the line between hubris and conviction?

If we look at some of the greatest trading opportunities within the past 5 years, the best examples were:

1. Holding Bitcoin from $9 to $69,000

2. Holding Tesla stock from $6 to $1200

3. Holding Dogecoin from $0.011 to $0.77

These were simply three prominent examples that came to mind, and where one could reason there were several reasons these prices exploded as they did, a part of me wonders whether the difference between conviction and Hubris is whether or not the idea simply worked out or not.

Hardcore early adopters or believers will say that they always saw this coming. We’ve heard the tales of basement tech-bros mining Bitcoin dreaming of a new financial system in 2011, families that sold all their assets to buy Tesla stock and Dogecoin millionaires that might’ve gotten lucky because they liked the dog meme. I find it ridiculous to juxtapose these principles in stating that 3AC were conmen or that Do Kwon was a scammer, to me they were also believers and heroes of their own stories that were fighting important battles.

There may exist a world where Tesla did not have every advantage in the book to help them succeed nor the retail marketing efforts that drove hysteria to prop their stock at 100x earnings valuation. There may exist a world where Bitcoin was shut down by central authorities long before its cult could prosper. There may exist a universe where Doge was never more than a meme. In contrast, there could also be a situation where Terra did indeed reach critical mass to survive without its egregious emissions structure or 3AC’s supercycle did come to fruition. The people at the helm of these ideas or the ones who all-inned their savings at the very beginning often stood by their thesis as “conviction”. I believe that the line between that and Hubris is often just the resultant conclusion that is grandfathered by the onlookers.

My conclusion for this thought-nugget is this, a conviction in an idea is good, but more often than not we must realize that even though we can find a thousand reasons why an idea should succeed, in the event of its failure there will be a thousand reasons dug up for why it failed. We cannot afford to be blind-sighted in good ideas once the market has turned against us, we cannot be arrogant in ever thinking our conviction isn’t hubris. The best way to trade may indeed be Sorisian, recognize and pull out of failures fast but double down heavily on winners, and do not marry ideas. At the end of the day, the market decides who is correct and who is wrong by the dollars in your account and the debt in your legal proceedings.

Here's to the crazy ones.

High level overview of everything web3 (article)

DAOs

Overview of the DAO ecosystem (article)

History of DAOs (article)

NFTs

What NFTs mean for digital ownership (article)

Internet ownership via NFTs (article)

Creators

How crypto impacts the creator economy (article)

Transformation of creators on web3 (article)

Finance + Trading

Probabilistic thinking - setting up a thesis (article)

Traditional finance vs crypto and Defi (article)

Collectivizing finance (article)

Gaming + Metaverse

Crypto in gaming (article)

Developers

Web3 university (online bootcamp)

To Eat From a Pie Which You Own

Ever since the implosion of ICOs as reliable funding vehicles for teams building in the crypto space (circa 2017), we’ve seen a fallback toward the traditional model of funding rounds for many of the current and upcoming prominent projects. While I won’t speak on the matter of whether VCs are yet again taking the majority of the pie, I do notice a trend towards their investing style and from reading a lot of articles on several of their involvement thesis that hints at the future they envision for the “end-game” of how blockchains are involved in our world - more particularly a multi-chain future.

I think it’s important to discuss how VCs are positioning themselves and the industry itself top-down. While the last statement may be bold I truly do believe crypto is at the stage where institutional money has enough weight to throw around and decide ultimately what lives and dies via capital control alone. We’ve seen the emergence of ETH-competitive L1s such as Solana and Avalanche arguably sole-championed by VCs into their current prominence. Their voices for better or for worse empirically has the ability to influence markets and how extended actors such as developers will position themselves.

Crypto VCs come in all shapes and sizes, we’ve seen VC firms have made a name for themselves as strictly crypto native firms such as 3AC, Multicoin Capital, and Paradigm. Firms that stem from tradfi such as Jump Crypto and Bain Capital Crypto, as well as extended investment arms of well-established entities such as Samsung Next, FTX Ventures, or Binance Labs.

Ultimately, do not be mistaken, VCs are not friends of the people. Their objective is first and foremost to generate a return on their capital - in any manner they deem necessary.

It is not my place yet to give a strong opinion on the presence of VCs. There has been debate as to whether they are a net positive or negative force in crypto and if they are fundamentally antagonistic to the mission thesis of crypto itself. However, one cannot deny the impact VCs have had in preserving and increasing capital flow into building the expanding infrastructure of crypto which makes it easier for all participants at the end of the day.

I can leave my thoughts as such: As long as VCs are incentivized to continue supporting the crypto ecosystem, they can be seen as a net positive force. Indeed this has been the side of supporting VC presence in the space and where my analysis comes into play.

Where Exactly Are VCs Aligned?

The point I am attempting to illustrate is quite simple so I won’t waste time using long-winded setups. Why the hell are there so many L1s? Furthermore why the hell are more L1s being funded into existence?

I refer to L1s as “layer 1 blockchains” which compose of a core consensus protocol. The most prominent L1s traditionally have always been Bitcoin - the foundation of cryptocurrencies itself and Ethereum - built to introduce computational execution within a blockchain that Bitcoin was not originally designed for. Ethereum will be the focus of this article.

Given that Ethereum itself is Turing complete, has a clear scalability roadmap and has already grown substantially since inception in terms of real users, developer ecosystem, and organization. One might wonder why new L1s are even needed? At a glance, the baseline argument is that just like with Bitcoin there are flaws within Ethereum’s original design Vitalik Buterin did not account for and thus an alternative is needed to address them.

If we look at the closest competitive chain to Ethereum: Solana, the biggest competitive point is that Solana is cheaper to run transactions on (lower gas fees) and it processes transactions at a much higher throughput. These apparent advantages don’t come without tradeoffs, and many market participants view Solana as anti-fundamentalist on the key principle of decentralization given that the SOL blockchain does not utilize an EVM. Its ludicrous scalability at the L1 layer relative to ETH is possible because Solana processes computation at the hardware level which naturally leads to less decentralization as the barrier to running nodes becomes hardware-gated.

Adding onto this fact is that Solana has major shareholders via the use of token SAFTs from early backers which as you probably guessed, are comprised of VCs. SAFTs are locked token stake accounts that vest over a given number of years categorically similar to equity stake contracts obtained from web2 funding rounds but in tokenized form, and often at ten or hundred multiples cheaper than the open market prices. The notion of having an “investor stake” in essential protocol layers for crypto seems like a ridiculous notion but it’s not something I want to dive into right now.

Adding to this is the empirical evidence that Solana has indeed gone offline multiple times and we arrive back to our question for this section: Why is there the need to fund/sustain additional L1s when everyone can help pool and build on ETH?

The one insight we can glean at this moment is back to SAFTs and the incentives for VCs to become founding investors. They are motivated to increase the value of their investments and hence need to continue supporting the development of their own protocols, not the majors.

Eternal Market Capture

It is my belief that Ethereum is largely abandoned by the broader VC community.

I posit 3 conditions for why from a VC perspective this is the case:

1. Ethereum has missed the window for compounding network effects

2. Ethereum has over-optimized itself as money

3. Ethereum network participants are not incentivized by sufficient opportunity

I can go further and bundle the 3 reasons ascribed above into a singular point:

Ethereum cannot capture the market at an acceptable rate.

Growth is the primary engine of valuations going up. The biggest earworm touted around crypto has always been about “network effects” and having sufficient critical mass to reach broad adoption - meaning, crypto becomes a standard in day-to-day life in some capacity. Ethereum has always remained a poster child destined to carry on a torch that Bitcoin has long passed that being the torch of reaching such critical mass.

Can old grandpa Bitcoin run smart contract code and replace the existing financial system? It’s much safer to bet on a new layer of digital infrastructure with ETH that can add or extract value from existing systems instead of backing the OGs aiming to replace gold or the dollar as Bitcoiners would dream.

However, such expectations don’t always guarantee a smooth delivery and as the years went on throughout several crypto boom/bust cycles there arose a sentiment that Ethereum’s many promises of shipping new upgrades to scalability and performance were nothing but vaporware and empty promises. This sentiment would further exacerbate with every new on-chain innovation being plagued by network bottlenecks.

It seemed our darling Ethereum was being outpaced by its own innovations, if this was to continue, then where was the growth? How do we increase the valuations of the future crypto economy we’d envisioned and promised when the base chain everything ran on was not performing well and not upgrading as fast as everyone had hoped? Beyond the early wave of crypto speculators, the worst-case scenario is convincing a new basket of developers, investors, and customers into an ecosystem where nothing actually worked as promised - we’d lose the momentum and would hence never achieve the network effect we’d dreamed of. This was unacceptable.

It was time for a paradigm shift.

The New Kids in Town

I’ll skip a ton of historical stuff as this wasn’t meant to be a total recap of all the events that transpired since 2017. The main focus is the now - looking at the landscape of crypto and L1s from my perspective there is an ideological shift away from the traditional belief that a monolithic Ethereum would power all of “web3”, and instead, we are moving into what will be the new norm: a multi-chain future. One where not only tens but maybe hundreds of viable L1s can exist, all having a different set of tradeoffs given the blockchain trilemma but interconnected via bridges or omnichain protocols directly.

The narrative has already been changed, we will see the words “interoperability” and “composability” as the new focal point during investor pitches and VC thought leaders. I think the value proposition for this new narrative is very clear: If Ethereum cannot scale at a rate we are satisfied with, we can simply work around this by not relying on Ethereum at all. With nearly infinite funding coming from a flurry of investor interest it’s rather easy to compose new base chains in serving whatever purpose is needed whether it’s hyper-secure or high-throughput chains.

SOLUNAVAX is an abbreviation to outline the first three alternative L1s to reach general community acceptance within crypto (Solana, Luna, Avalanche). This itself is already a huge achievement given that veteran crypto-natives generally view all alt-chains to be shitcoin pump and dumps except Bitcoin and only recently Ethereum.

Does it matter that Solana shuts down from time to time and isn’t very decentralized?

Does it matter that Avalanche has ramping fees that may rival Ethereum if unchecked?

Does it matter that Luna has a stable coin that is backed by reserve assets purchased using itself?

The question to the three questions above is “not really”. I think it’s evident by now that crypto participants don’t really stand by fundamentalism or traditions that validate the concept of “web3”. Humans, after all, are driven primarily by self-interest first and laziness second. To face reality for a second I doubt the broader community actually wants to run their own nodes, manage wallets and seed phrases, or actually care if transaction finality is validated in a decentralized way as much be fast. I don’t see this as necessarily a bad thing as I believe overall that systems can be designed in such a way where the broader mission of crypto is pushed via the pursuit of self-interests much like the ideal state of capitalism. We’ve also progressed past the intention of having crypto as an alternative currency, there is so much more that blockchain networks can offer from providing real permissionless architecture - but that will be a topic for a different time.

My main point is the one demonstrable fact that speaks volumes which is that there’s nothing you can’t do when enough capital is being deliberately concentrated whether it’s attracting users onto a new chain via ridiculous APYs for farming/staking incentives or developers with mouth-watering grants.

The opportunity to make money will always be the best catalyst for the continued growth of these chains and many more L1s will continue to follow suit on a now proven model. For many new arrivals to crypto, there is now a strategic question of which network to begin with - a network with high fees, slow throughput and a community that has largely already made it financially or networks that will shower you with rewards just for paying them attention, filled with hungry folks that are in solidarity and looking to make their big break? I think the answer to this for most entrants will be obvious, humans are after all largely in the pursuit of their self-interests.

I have no doubt that crypto will continue capturing the attention of the world over the next upcoming boom/bust cycles as it always has. As a former Ethereum maximalist myself, I have since resigned my own belief in embracing this new multi-chain future as frankly, I see no stopping this narrative. VCs want their innovation, they want their returns in funding scrappy new startups.

Under the multi-chain future, the doors are now open to an infinite number of participants that can cater to every need. There will be more L1s, more protocols and more bridges to help connect everything all together neatly wrapped under the Markham of the “composable and interconnected ecosystem”.

The VCs will get their share of everything. There will be the continuation of the innovation march. There will be eternal market capture.

(Skippable Prelude) I haven’t been satisfied with the quality of “newbie” guides for people just looking to get their feet wet with things within the crypto-sphere. Either they assume a base level of knowledge that many simply don’t have, or are too long and don’t deliver value fast enough to be accessible en masse (or are filled with buzzwords). This post is part of my series in attempting to highlight the main value propositions and key terms to help direct people to quality, more in-depth resources written by people far smarter than me.

(Actual Content) Defi is short for “decentralized finance”, a concept that all traditional financial services typically gated and controlled by middlemen such as banks or brokerages are instead available 24/7 to the end-users directly. While it may not be obvious at first glance there are tremendous benefits to the end-user and greater accessibility with Defi compared to traditional finance (the status quo) which we can call Tradfi in the spirit of shortening things.

Background knowledge to know:

Financial Instruments are “monetary contracts” literally meaning “money contracts” as they are quite literally contracts that involve money in some way.

Financial instruments can be:

Created (create some contract conditions).

Traded (contract can be given to someone else).

Modified (contract conditions are changed).

Settled (contract conditions are executed).

These contracts can be created technically by anyone since they’re just a piece of paper with writing that promises currency, ownership, or a right to buy or sell. I’ll give a few examples:

Currency: literally cash, or foreign currency (forex)

Debt: bonds, loans

Ownership: equity (meaning shares of stock that represent ownership)

Right to buy or sell: derivatives (options, futures, forwards) are a bit trickier but these contracts typically lock prices to buy or sell for a given time period or condition.

In Tradfi, financial instruments are managed solely by “middlemen” think banks, exchanges or brokerages. This is justified in the past because they are touted as central figures that can be trusted or at least vetted to uphold and honour the terms of money contracts created by them.

Tradfi historically has had some major areas of opportunity that build off each other to form even bigger problems:

1. Its not fair - the level of access to financial instruments and subsequent financial opportunities is not the same for all levels of society. Trading for example is only available for the average person on weekdays but institutions can trade all the time with special connections or privileges.

2. Its not transparent - the lack of equity in finance leads to information advantages as well as black boxes around how money is being moved through middlemen because their ledgers are all private. Even for public institutions, balance sheets can be outdated the minute they are published for the masses.

3. Its not fast - Because middlemen need to be vetted and audited, there are often big inefficiencies with settling transactions between clearing houses. The Robinhood stock trading freeze was an example that lead to a financial burden for its users directly caused by this issue.

4. Its not innovative - Financial instruments are controlled by middlemen and thus the technological pace of services doesn’t reflect or match the speed of growth in demand from society, businesses, startups, or everyday users.

5. Its not safe - We have seen time and time again that poor human-based control mechanisms allow excessive greed to pollute our financial systems stemming directly from the middlemen themselves and cause systemic collapse.

The gaps mentioned above is solved by Defi and some. Defi is built on top of blockchain technology which is a distributed, shared ledger that is immutable - meaning it cannot be altered and is publically verifiable because anyone can read the ledger. This allows us for the first time in history to build a protocol layer that allows trust without the need for middlemen or extra vetting.

Blockchain takes care of the trust portion but what about financial instruments? Remember since they are just contracts, we can replicate their function on top of blockchains via smart contracts which are functionally the exact same, but written via code. A smart contract enables self execution of contracts without the need for third parties because its technically a computer program, therefore when conditions are met the code is automatically triggered.

Now that we have our two major building blocks, 1. the trust enabled by blockchain and 2. the smart contracts, we can now build out our vision for Defi through the use of decentralized applications (dApps). dApps is a fancy term for saying an application that operates via smart contracts, which basically means an application that can perform in our context; financial functions and operate financial instruments completely autonomously, 24/7 and without human interference or involvement.

What this means in a broader sense is that all financial functions can now be performed without middlemen institutions. This means users can now directly transact and operate financial instruments with other users directly through dApps and not have to go through approvals or arbitrary scrutiny from institutions. Nobody can tell you what you can or cannot do with your money and the best part is everything is transparent.

On top of this, users now have access to MORE services than they could with Tradfi. As a high level example, Defi users can take loans with more favourable rates in an open market driven by user competition instead of being set by banks. They can also lend out their own digital assets and generate higher yield than what Tradfi savings banks can offer. Users can also have access to markets 24/7 with no opening or closing times. They can also invest in a range of opportunities typically gated for “accredited investors” in the Tradfi world and also send money globally to anyone, anytime without delays.

Let’s compare at a high level how Defi can cover gaps from Tradfi:

1. Its fair - because blockchain is quantifiable trusted, we can build financial instruments that are accessible by anyone which aren’t locked behind middlemen or arbitrary rules. Financial instruments built on blockchain are self executing contracts that automatically fulfill requests 24/7.

2. It’s transparent - blockchain data, which include all transactions ever made can be openly verified by anyone, the ledger is public and immutable meaning it cannot be altered.

3. Its fast - transactions processed through blockchains are faster than Tradfi in terms of actual real-time settlement, no holding periods, no verifying fund sources, no clearing houses. Scalability for processing transactions will be a topic for a different time.

4. Its innovative - Defi allows access to financial instruments traditionally not available for the masses. Crowd funding, asset lending, and other innovations allow increased money velocity through all levels of society and fuels new ideas. People are able to take out loans or earn interest on their money at better rates and with easier access to accelerate the economy.

5. Its safe(er) - Defi protocols often have strict rules implemented to protect the ecosystem. Smart contracts are often audited several times before being pushed live and careful thought is taken into consideration when designing protocols. As an example with lending often the ration of collateral to loans a user can take out is 2:1 which protects the network in case of asset devaluation events or defaults. The highly automated nature of Defi removes elements of human operational risk.

I don’t want to make this article too long as I will likely revisit this topic in the future with more depth into how everything works. I hope for you as a beginner to Defi I have exposed conceptually the benefit of having an open and transparent financial system which includes everyone as equals. Although I am aware that Defi in its current form isn’t perfect and has a long way to go. Its a significant component of my idealized world and one which I hope to continue contribute in building.

Yours truly,

People are being gaslit by Wallstreet every day. We see it in the mass media when CNBC assumes retail investors are children who can’t keep track of their own expenses much less manage their own money. We see it in the very institutions that control the ability for us to choose when and where we spend money. Having my employer match my RRSP is great but god forbid I take their hard-earned contributions and decide what to invest in for myself, no please be rational and buy one of Blackrocks's ETFs to let them decide what’s best for me. No thanks.

The truth is when you dig into the highs and lows of financial markets, you see the irrationality that drives not merely the lower echelons of society but the so-called top as well. With extra sprinkles of fervent irresponsible greed that’s caused most of the previous financial meltdowns and will do so again. They get the play the game this way because they know there are no consequences, after all, it’s not their money and hey who else is gonna manage your money for you? Hand over your savings and get back to working that 9-5 you child.

I love apps like Robinhood. Actually, let me set myself straight, I hate how Robinhood operates but love the idea of Robinhood. Decentralizing the market for its participants and allowing normal people at the individual level to participate in wealth-growing is fantastic and only serves to provide organic liquidity + increase the velocity of money within an ecosystem. The very foundation of capitalism is that people can vote with their dollars and the very best ideas win since they serve the greatest pool of people. We can’t have that when monolithic behemoths control how capital moves at every step nor can we expect true innovation to occur in such a situation. Yet this is the financial world now.

I’ll continue to ramble in the future about the financial world and great projects being built to truly democratize it. I originally wanted to write this post to share some short and funny anecdotes to demystify the financial industry so here they are:

1. Wall Street analysts are professional blog writers.

2. Venture Capitalists are professional blog readers.

3. Hedge funds only outperform themselves.

4. Diversification is masking indecision.

5. Technical analysis is astrology (I didn’t come up with this).

6. Making a lot of money investing is drastically easier when you have a lot of money.

7. Investment bankers are professional PowerPoint makers.

8. Finance professors never make money through finance.

9. Venture Capital is kind of a Ponzi Scheme.

10. Everything is a bubble.

This excerpt follows the announcement of Facebook’s rebranding and a highlight of Mark Zuckerberg’s (Facebook CEO now Meta) vision for the metaverse.

What is the metaverse?

The metaverse I believe has always existed even before Facebook’s announcement. I think of it as akin to a different dimension or abstract space created by humans. Every digital interaction or “imaginary-spaced” object created puts a new piece into this dimension and continues the expansion of the metaverse. There is a lack of physical characteristics that can be used to describe the metaverse in succinct detail so I will refer to it as a “different dimension” for our understanding.

The metaverse can be transposed right onto our own or can be visited in itself. One thing for certain is that one cannot access the metaverse or see the metaverse without a sufficient “portal” (eg. VR headset) I draw a parallel here to fantasy trope portals to access a different world.

I want to differentiate the metaverse from something like a VR game, a game is only a pocket dimension compared to the extent of the actual metaverse. We can say that connectivity is the barrier between what indeed belongs to the metaverse versus pocket dimensions.

An example to make the prior point clearer is we can imagine a house. A house next to another house is simply two homes but connects enough houses together through shared access and it becomes a complex. If we draw this to the metaverse all connected digital experiences can be part of the metaverse which in turn becomes an incredibly large “complex”

Facebook is in essence merely opening “portals” to the metaverse, do not be mistaken they are not solo creating it as the media leads one to believe. It is impossible for Facebook to build the metaverse on their own or try to control it, I believe Zuckerberg’s vision entails controlling the rights to the access portals (at least initially) leading to controlling of the tools used to build the metaverse more efficiently - thus as the world shifts into the cloud, then the metaverse it will generate trillions of dollars in revenue for Facebook (now Meta).

The metaverse is a human construct birthed from the advent of digital communications - it's a hyper-virtualized digital twin of our physical universe with one main difference: It transcends physical space. There is a concept called “non-euclidean space” which to simplify imposes that one can have infinite space within the confines of traditional Euclidean space. The biggest boon and shift the metaverse offers humans is the ascension from physical space. 

Just as the theories imply if we can transcend our 3 dimensions, we can be free from the boundary of time or gravity - the metaverse allows freedom from the boundary of space.

In economics, the fundamental thought of space utilization can be challenged directly. Production AND recreation can exist within the same space. I’m probably not selling the idea as well as in my head but essentially land value becomes worthless because there will no longer be “good” and “bad” land - I’m simplifying here but all the finite land on earth has its inherent value based on various economic principles and evaluations. 

Our world is driven by physical space and the demands + needs that revolve around it.

Can we imagine a future where land is hyper-efficiently utilized? What does this mean?

This starts getting into “bruh that’s a stretch” territory but a world where highways don’t need to exist as frequently. A world where the only sensible utilization of space is for food production (sustenance) and living spaces (shelter). This may seem bleak at first but I believe it's due to the mass media effect because you are probably thinking of a world that looks like a giant prison when in reality it can be quite beautiful and in tune with nature. A hyper-advanced society can live in similar conditions “objectively” to the hunter-gatherer tribes that used to live as one with their environment. I believe after all it was due to space limitations that drove humans to industrialize into our current state.

In the metaverse physical space is not a real concept - we believe it to be true in our universe because actual humans are tied down by physics and other natural laws. The metaverse in contrast is bound only by code and computing power + imagination.

End of part 1.

Whether by nature or nurture I’ve never been the type to openly share thoughts and opinions in their raw form away from the confinement of corporate lingo or well-prepared scripts for Zoom meetings. Here is a chance in my tiny corner of web3 to finally start the process of sharing my work - whether it be thoughts, ideas, ramblings, or an investment thesis for those unlucky enough to stumble here to see.

I believe in the coming years it will become increasingly important to be transparent about our work, whether it’s to temper our own egos or to obtain valuable feedback for greater gain. I was supposed to read “Show Your Work!” By Austin Kleon which was supposed to help coax people like me to begin this process earlier but alas procrastination got the better of me once again. As I continue that trend in putting off an important project in favour of starting a blog out of the blue, I hope we are able to extract some value out of the incoming poorly-structured ramblings published here.

A bit about myself, I’m a 22-year-old living in Vancouver, Canada. I’ve been trading and studying financial markets for around a decade now (you do the math) and currently work in tech full-time alongside completing my university degree. I’ve been involved in crypto on and off since 2015, missed the DeFi train completely but am a staunch believer of web3 and the metaverse as a whole (no not the Facebook one).

Let’s enjoy this ride together while it lasts.

Yours truly,