The Tribal Dive
We’re excited to introduce our first of many newsletters, The Tribal Dive. Every week, we will share insights on the market, crypto-related news, and a commentary section from a Tribal Team member. Please get your friends and family to subscribe and join the Tribe.
Let’s Dive in
There is no question that Crypto and DeFi as a whole ecosystem has been heavily scrutinized and put in the hot seat. With recent events like Terra Luna’s fiasco, Three Arrows Capital going bankrupt, Avalanche’s allegation of hiring a law firm to go after its competitors, and the aUSD’s hack, there is clear evidence that lots of work needs to be done. These recent events also expose DeFi’s loopholes while at the same time educating and helping Defi enthusiasts make wiser decisions on what they put their money into. The crypto community is becoming wiser and noticing that DeFi is unsustainable without a true yield-generating mechanism in the protocol. This is a segway to my next thought.
Lately, there have been rumblings of something called “Real Yield,” which essentially means yield derived from the generation of real protocol revenue. Many DeFi protocols have offered sky-high yields through excessive token emissions and financial smoke and mirrors. A “real yield” philosophy says that DeFi should be about long-term, sustainable value generation. This is a major disruptor in TradFi and has enormous potential for growth in DeFi. The most popular DeFi revenue typically derives from high token emissions; this inflationary model results in low token prices. If I had to guess, we should expect to see more projects implement a “Real Yield” model into their protocol. Check out the link below to learn about the projects that have an active “Real Yield” protocol.
Link https://cryptoadventure.com/real-yield-the-top-defi-tokens-for-generating-actual-revenue/
SEC News
You may already be familiar with the name Gary Gensler; if not, he is the Chairman of the U.S. Securities and Exchange Commission. Gary has been very aggressive and vocal about his beliefs regarding crypto. He’s made statements that he believes every crypto exchange platform is allowing US persons to trade unregulated securities — scary stuff. Bitcoin is the only cryptocurrency that Gary has admitted is not a security; even Ether might be under scrutiny in his philosophy. Under Gensler’s leadership, the SEC has beefed up its crypto enforcement staff to go after the bigger crypto projects. In its Coinbase insider trading filing, the SEC alleged that 9 tokens, including AMP, are actually unlisted securities. Crypto fund Grayscale recently reported that the SEC has been asking them similar securities questions about XLM, ZEC, and Zen. With this information, one can presume that XLM, ZEC, and Zen are certainly next on the list.
The XRP lawsuit remains one of the most important test cases for the crypto ecosystem. The future of regulation relies heavily on the outcome of these cases. Let’s see how this all unfolds in the next couple of months.
Source:https://forkast.news/headlines/grayscale-says-xlm-zec-and-zen-may-be-securities-after-sec-inquiry/
Interesting Tweet regarding this matter
Market Commentary
Are we going up, are we going down? Or just sideways? Who knows? If you observe the sentiment by looking at Crypto Twitter, you’d be asking yourself these same questions. The reality is that no one knows. Some weeks we’re bullish and other weeks, not so much. Some call for a $10,000 BTC, while others say we are at the bottom. This is just very typical in every cycle. Many were waiting for a $5,000 BTC during the pandemic in the last cycle. It’s funny how if you’ve been in the space long enough, you see identical patterns in how the market reacts. In my personal opinion, I think we’re close to the bottom. If you look at the previous cycle, BTC crashed down around the same percentages as it is today, 75%-80%. Alts, on the other hand, were at close to 90%-99% down from the ATH. Today most alts are those levels. But then they climbed back up again.
History doesn’t always repeat, but it rhymes. This tells me we’re close or at the bottom and will probably trade sideways until late 2023. The key takeaway is that timing the market is tough, and it’s best we have a macro perspective. As for what I’m doing, I’m DCA-ing into my favorite projects, blue-chips, and DeFi projects that generate “Real Yield.” Stay tuned until next time.
-Joey
DISCLAIMER: The views and opinions expressed herein are those of the speakers and do not necessarily reflect the views or positions of any entities they represent. The information provided in this newsletter does not constitute investment advice, financial advice, trading advice, or any other sort of advice, and you should not treat any of the newsletter’s content as such. Do conduct your due diligence and consult your financial advisor before making any investment decisions.
