What's speculation?


  • some cryptoassets have P/E ratio due to the protocol revenue

  • usually it’s not paid as dividend but used to buy back the stock

  • Ethereum has actually better P/E ratio than SP500

Don’t look for the price now - notice that ETH shifted some of it’s supply side revenue ( miner’s revenue ) into protocol revenue ( EIP-1559 burn )

It means that ETH now has Price to Earnings ratio.

And the ratio is as follows ( hint: it’s dropping - so for the “value“ investors it’s becoming more and more attractive ) If the market is saying that 38x P/E ratio is reasonable when applied to stocks, maybe it’s somehow reasonable as well when applied to crypto-asset which can be both money and productive asset giving you yield or dividend buyback.

Is Ethereum money?
Non-Oracle Smart Contracts Are Useless, Anyway Ethereum’s value proposition was something general (enabling a high rate of project-creation). However, Ethereum’s use cases are few (if not nonexistent), making the “generality” objective inappropriate…
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The more profitable something is the more competition it would attract. Ethereum currently enjoys being the dominant position in the DeFi / NFT space but high fees can convince even diamond hands into using other blockchain platforms.

Crypto is actually boring

Hypothesis for 2020-2030

1. Bitcoin has higher Sharpe ratio than other asset class when hold for 4+ years

2. It looks like the bitcoin market cap would be something between 1T and 10T by 2030

3. Timing the bottoms and tops is hard and emotionally painful

4. DCA is best ( not that it’s mathematically best but it’s best at removing having to decide when to buy and sell.
5. When to sell? That’s a good question - maybe when your savings are enough to have meaningful change in your life ( I’m not there yet unfortunately )

So what should you do? Just DCA

https://deltabadger.com/ref/KACPER ( affiliate link to the DeltaBadger which is a DCA software )

You don’t actually need more charts or more data - it’s just the noise.

Mexican Peso problem

DeFi is about re-learning the history of finance.

Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

Plot twist: Russian ruble collapsed as well.

And now one could see what happen to people who pursued yield without any diversification “yield hogs“


Track time series automatically

How I've automated annoying manual process.

I’ve posted some charts in previous editions of the newsletter - gathering, cleaning and parsing data into readable format so I can chart multiple variable and infer some hypothesis takes more time and effort than actually writing the analysis.

My workflow is usually something like this:

  • find interesting endpoint ( usually public REST API )

  • either download historical data or

  • set up a crontab ( program that runs on say 10 minutes intervals ) to download the current data into the database

  • perform some operations on data ( usually multiplying or calculating the difference )

  • plot with matplotlib ( python charting library )

    And all of the work above just to create 1 single image/chart.

    I’ve decided to automate boring parts: I’ve created small flask ( web framework ) app that: gets url, then it would flatten the json and download the data each 10 minutes. Do you know some interesting endpoints that you would like to add?

    Feel free to play with it! Let me know which API to track and which features to add. ( right now I’m working on making the charts more readable )

    ( Link below )


Understanding bucket shops and Polkadot futures contract

Aka how to trade IOU without access to underlying commodity.

Polkadot is currently like Ethereum pre-genesis, participants that bought tokens have just wallet.json file with keys that would allow them to claim Polkadot real tokens when the network will launch.

Technically there is ERC20 token that’s not transferrable - it’s just an indicator that somebody owns the Dots.

Then how it’s possible to have exchanges offering DOT/USD trading?

Enter bucket shops.

bucket shop is "an establishment, nominally for the transaction of a stock exchange business, or business of similar character, but really for the registration of bets, or wagers, usually for small amounts, on the rise or fall of the prices of stocks, grain, oil, etc., there being no transfer or delivery of the stock or commodities nominally dealt in" ( wikipedia )

Do you actually need to hold the stocks or currencies to trade them? There are multiple shady “forex / CFD“ operators that just that:
A customer is sending some real dollars to the account controlled by the “forex“ then trades with large leverage. Note that his profits = losses for the “operator“ = usually people lose 90% of money trading in 90 days so you can actually operate such schemes until regulator would get after you.

And what’s the DeFi? Same thing but with some transparency and smart contracts.

How exactly it works?


Buyers : Buyers post fully funded USDT for purchases and therefore have no leverage. CoinFLEX has the right to introduce leverage, thus lowering margin requirements in the case where DOT Futures build up enough liquidity, at the sole discretion of CoinFLEX.

Sellers: Sellers have to post USDT T600 (CPC) for every Dot Futures they sell on the orderbook. This is to ensure that in any situation, longs can be made whole. At the point where Polkadot’s mainnet launches, CoinFLEX may allow sellers to replace the T600 USDT with 1 DOT as margin.

1. Use some cryptocurrency as collateral

2. Have some price feed or final settlement date

3. Polkadot seller has to deliver $600 worth of Tethers to the exchange.

4. Buyer would receive either real Polkadots before 30th June 2020 or if the network would not launch before this date then they would get $120 worth of Tethers.

Current price ( orderbook ladder )

If you want to buy Polkadot right now you have to pay roughly $180 per DOT

If you want to sell Polkadot right now you could sell it for about $100 but you have to lock ($600 - current price = $500 per dot ) until 30 June 2020 ( about half a year of opportunity cost and default risk for the CoinFlex - say it’s 10% p.a :

Then it cost about $25 per DOT. So if you factor the opportunity cost in then you can sell the Dots right now for $75.

If you are enduring you can post buy order at $100 and wait until it will be filled but then it’s even better option than other IOU as in case of network failure you will get back $120 ( roughly 40% annualised return rate )


  • you can buy and sell Polkadot already

  • selling Polkadots require lot of collateral ( $500 per dot )

  • buying Polkadot on CoinFlex is better than buying raw IOU as if the network won’t launch you would actually profit

  • You will lose money if the Polkadot mainnet will launch with lower price then current $100

In the next newsletter I will explain how SNX works in the detail

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