Back in the 1980s, Oldsmobile came out with a pretty clever ad campaign, using a slogan “this is not your father’s Oldsmobile.” Here’s one such ad and it’s a fun 30-second investment of time.
That ad is kinda cool for me to see, for a couple of reasons. One: the dashboard and its electronic numbers, now standard everywhere, were ahead of their time, and it seems as if everyone I knew had a car with those display numbers at some point in the late 80s or early 90s. Two: my Dad talked often about his all-time favorite car, which was a Cutlass Supreme. It was a late 60s or early 70s model, so this ad is showing something that is not *my* father’s Oldsmobile, natch.
Enter DeFi, and $YFI
After a busy couple of weeks in the Bitcoin, cryptocurrency, and (especially) DeFi spaces, it’s now obvious that “this is not your father’s market.” We talked about the concept in our post about Liquidity Machines; it’s obvious that it’s the Wild, Wild West (Kool Moe Dee version preferred), and there is quite a bit of new-sheriff activity happening just about everywhere.
We thought we’d outline just a few real-world examples — “ripped from the headlines” — that we are trying (again, we like experiments) with our own portfolio. Our first one is no surprise: Yearn.Finance, ticker symbol $YFI.
YFI burst upon the scene two weeks ago. It has had quite the run. See chart; drool.
What’s most amazing about this coin is that the founder, Andre Cronje, has said that the YFI coin has no value and that he’s building tools that might have bugs in them.
No matter: YFI is the yield-farming technology that underpins so many liquidity swaps that even if it is deemed by the founder to have no value, it does actually have value. Quite a lot of it. Plus scarcity: only 30,000 of these will be created.
Using stupid-simple math, if this becomes a $1 Billion platform, each coin will be worth $33,333. Financial pundits call this an “asymmetric bet.” And it’s one we’re willing to make.
Of Course, We’re Also Investing in Meta
Funny enough, I first saw this platform in a tweet and the platform looked slick as heck. Here’s a Medium post explaining more: Medium Post on Meta.
Oddly for us, we had a tiny tiny stake in Balancer — at least a couple months ago — but decided to focus other opportunities, so we moved away from that platform.
What makes this one unique is its goal to insure users against the instability of dollar-pegged stablecoins as one side of a liquidity pool. Other coins talk about risk of loss of the value of a stablecoin were it to fall significantly below zero; with questions about coins like Tether commonly brought up, the potential for a loss is real. As explained by the token team:
This, to be honest, is purely opportunistic: low “market cap” right now, huge upside, and worth watching. (YMMV, DYOR, all that stuff.)
Finally, Watch for Curve
Curve is lurking in the background somewhere, waiting to launch its token. Curve has invested in Yearn, and, if there’s ever an asset that may very well pop almost instantaneously, Curve is possibly it.
Here’s a snapshot of Curve’s current pool APRs and its volume:
Whales are already using Curve and have been since earlier this year — cumulative volume on the platform has exceeded $1.5 Billion — and there’s thought that Curve is possibly “The Next Big Thing.” This is because, as with other platforms like it, you’re adding liquidity to pools and sharing in the trading fees.
(Speaking of “The Next Big Thing,” though, we should caution everyone that we were told in 1988 that Bros would be the next big thing in music.)
When the coin is released — “any day now” — only 2 million will be released each day. Scarcity will set in. Volatility is almost assured — so you’re really going to be on a roller coaster here. But that roller coaster, like the rest of the coin- and token- and liquidity-driven assets, could give you a nice pop. OR…well, you could end up like the career of Bros.
Or like the Oldsmobile: a relic of the past, a nice story about the growth of automobiles, and a defunct brand name.
As with any and all of these, what are the lines you should keep in mind? “Bet with your head, not over it.” “Don’t invest more than you can afford to lose.” “You may get rekt.” And “this website is not investment advice.”
Good luck. Happy Liquidity.