taking a break
Joined May 2009
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The one thing crypto does well at is being a casino where the the odds aren't stacked against the player.
Why would you go from that to gambling where the house always wins at casinos disguised as TCG gachas 🤷♂️
Emerging market lending only works in countries with very specific infrastructure conditions with very specific products. Africa is not one of them, and unsecured lending is absolutely not one of them. This lesson has been learnt over and over since 2 decades ago with the wave that came from Grameen bank and Kiva clones.
source: i tried to clone Kiva in the philippines in my early 20s (this was also pre smart phones) and failed spectacularly
I got absolutely rekt by Goldfinch @goldfinch_fi
These idiots mismanaged over $50M of our money. Out of 8 borrowers - 2 are in default and 6 in restructuring. Basically money is gone.
1st time I deposited in Sep 2021, then 2 more times in 2022. It's been fucking five years and I still haven't got my money back in full (and never will), let alone the promised 10% APY.
Dashboard on their website says total loss rate is 20% but in reality its closer to 70% now. Since I requested the withdrawal in August 2023 I received only 30% of my money back. Best case scenario is I get another 10% over the next 1-2 years.
They hired a CRO with a $400k yearly salary who is posting updates twice per month in discord and thats about it. Occasionally they may request $50k - $150k for various other needs. All this money is being taken from the treasury of course.
CT doesn't know about it yet but Goldfinch is closing down soon. There is "wind down" announcement posted in discord, soon it will be public. Their official twitter page is run by a reply bot anyway so who cares anyway.
$GFI token is -99% and imo will be delisted sooner or later because project is dead.
Prime example of how fragile DeFi can be.
Very big assumption these companies own the cards you see in the gacha 🤔
Threadguy explains why Pokémon gacha companies have one of the greatest business models ever
“You have a very finite supply of vintage Pokémon that people want. There's not that many of these cards”
“So you get a bunch of these gambling companies to come in and the only moat these gacha companies have is their supply. So they come up with big VC dollars and they buy everything”
“They put them in these packs. Somebody spends, reveals a gacha and what do they do? They sell it back to the company -15% and then they spend again”
“Almost nobody is actually cashing out, getting the card shipped and letting it hit the market again. Once they're purchased from the gacha companies, these cards never hit the market again”
“Gamble, sell back, gamble, sell back, gamble, sell back”
“The gacha companies never have to sell inventory because they make 15% on every gamble and sell back. The actual gamblers never let the inventory hit the market because they just sell back”
The biggest sign defi doesn't work:
All the yield products available on chain that do not require accredited investor status (ie. centralised) have really bad risk-return profiles compared to what exists in tradfi.
i think it makes sense for defi yield to be > 12%
My oversimplistic way of thinking about it is emerging market credit starts from >10%
The only thing I can think of that is similar in risk profile to protocol risk (hard to underwrite, yet can cause you to go to zero) is poor legal infrastructure in EMs. Doesn't matter what your commercial terms are, you get screwed if your legal recourse doesn't work.
Answer has been there for years in tradfi.
What hedge funds commonly use for yield that is not Tbills and uncorrelated to market:
1. Litigation financing
2. Reinsurance
The biggest yield request I’m seeing from our fintech partners is yield that is:
1. Not directly correlated to T-bills.
2. Not directly correlated to onchain yield (the carry trade)
The Fintechs want to market a yield (6% for example), and not have to worry about it going for at least 2 quarters.
“We are happy with a lower yield, as long as it’s stable.”
Fortunately for them I’m a people pleaser.
Singapore has no startups that scale because there is no large homogeneous market to scale to. If SEA, from day 1 founders have to manage 5-6 language, cultures, regulatory landscapes, cost bases etc. Extremely capital inefficient on top of the immense operational complexity.
Many other reasons but they are all second order. Market stops 90% of the people (founders and investors) from even trying.
"Singapore has no startups because everything is too convenient"
Bro China has the most convenient payment and utility payment systems on earth. That clearly didn't stop them.
The real problem: Singapore's system is so well-designed that the rational move for a smart person is to never leave it. NUS → DBS → $10K/month by 30. The expected value genuinely beats startup odds.
Smartest locals I know "try" startup for one year — after thinking about it for three. Meanwhile US/China founders just jump.
And if Grab started in SG instead of Malaysia, you think MOT wouldn't have shut it down before Series A?
It's not convenience. It's a system optimized for comfort, and a culture that counts the odds before jumping.
Happy Pokemon day!
Mew has been my favourite Pokemon since I was 12 or something. Could not figure out how to get a Mew for the life of me (limited internet access back then)
I met another kid with a bunch of mews in an arcade. We battled, he trashed me. But I convinced him to duplicate one of his mews for me (the OGs would remember: you had to connect those gameboy cables and then plug them out at a specific moment during trading. The receiver gameboy would record receiving the Pokemon but the giver would keep theirs)
That bunch of pixels became the most valuable thing to me ever
Chris Sirise retweeted
On chain lending is cheaper mostly because it is overcollateralised and unlicensed. If we are made to change those 2 components we would see costs go up very quickly.
We would have to change both of those at some point if we want to see the industry grow. We would still have lower costs just because of efficiency of things on chain (the points you mentioned) but no where near what we are seeing now.
Much better than btc collateral. At least I can eat it
This $200M bank is backed by Parmesan Cheese and is lending people money for cheese
In Northern Italy, Credito Emiliano treats cheese like gold
The bank currently holds 430,000 wheels of Parmesan worth about $200 million
Real Parmesan takes two to three years to get ready
This leaves farmers with millions of dollars in premature products they can’t sell, while still needing to pay for cows, bills, and workers
By using young cheese as security for a loan, farmers get cash immediately
The bank provides up to 80% of the value upfront so these businesses stay running
While the loan is active, the cheese stays in high tech vaults where experts look after it
If a farmer can't pay, the bank simply sells the aged cheese for a profit
Any convo about web2 neobanks centre around customer acquisiton costs (CAC).
Web2 fintech already taught us the lesson: customer acquisition only works if you can upsell multiple products on a low cost of capital balance sheet.
Single-product wallets are not banks (yet). Until they solve for cost of capital and make CAC work.
High yield in DeFi usually means "lend me money at a lower rate than you would with fiat"
Markets are honest. Marketing is not.
Credit card interest rates are high because the CAC for a good credit card customer is very high once you factor in all forms of indirect costs on top of the direct sales costs. Losses taken from defaulting customers, having to do merchant acquisition which in many banks is a loss making portfolio etc.
You can narrow margins and that sounds like something people would want, until you realise the card issuers will just react by tightening credit requirements and having less people with access to credit. The solution is to solve for CAC/distribution.
Credit card rates are insanely high for consumers, but capping the rate isn't the solution.
The real problem: the market for these loans is widely uncompetitive and proprietary.
We should strive to build a more open market for trust/loans. Once any lender can compete, customers will get a much lower and fairer rate, based on their creditworthiness. Without this, capping rates will just exclude people from credit entirely.
If only someone was building a universal lending network where anyone can prove their trustworthiness and let a competitive ecosystem of asset curators compete to underwrite them, whoever they are, wherever they are... 🦋
