• As adoption occurs, the token price will go up and the project will have more capital to fund development.
  • Prices reflect whether the market thinks the bond has become more or less risky since it was issued.
  • If a bond has positive convexity, the bond will experience larger and larger price increases as the yield falls.
  • Put simply, if you are long convexity, your risky exposure increases as the market moves in your direction and decreases as it move against you (yay!)
  • Here’s the problem: right now, token projects — despite their talk of antifragility (another word for convexity) — are all short convexity in their overall business models.
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  • In its recent quarterly review, the Bank of International Settlements asked central banks to consider whether cryptocurrencies might make sense for them. Central banks, however, are intrinsically conservative bureaucracies.
  • I’m worried about central banks taking on unnecessary risky projects, thereby rendering them too cautious in other areas. An additional reason for skepticism stems from the nature of crypto assets.
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  • While capital is extremely important, the ICO has another powerful effect: It gets your tokens into the hands of people who are incentivized to help your network grow.
  • The only way to ensure that everyone who wanted to participate had an opportunity to do so was to run an uncapped ICO, which led to ridiculous amounts of money being raised at absurd valuations for seed stage projects.
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  • Although it makes sensational headlines when platforms fall under siege of hackers, reports of individual users who find themselves the targets of malicious actors often go ignored.
  • The situation is a great case for users in the crypto-space to heed Walsh’s warning and utilize ulterior methods of two-factor authentication other than SMS.
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  • The creator of Ethereum has written a blog post that contrasts zk-SNARKs and zk-STARKs.
  • The concept for zk-SNARKs (which predates Ethereum, but in the Ethereum context could be used to verify transactions) caught the attention of several of that blockchain’s developers as a result of its anonymity-enabling properties.
  • Zk-STARKs share this feature with their more famous SNARK “cousins,” but according to Buterin, also several shortcomings, including their “reliance on a ‘trusted setup.
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