Intro

I am but a humble fool. 

I have been researching a lot these past few months but realized that I haven’t collected my thoughts nor truly analyzed the outcomes. Weekly wisdom will serve as a medium to do exactly that. I will share all the videos, threads, and articles that I have looked into, as well as a very brief summary of what I learned from them. Hopefully, this process may help you too.

Although these markets are brutal, you are sitting on a fortune waiting to be cashed in, if you take the time to properly research and learn. There are not only investment gems that you would previously have overlooked due to inflated prices, but there is time, time to truly level up.

This week has involved finding core gems and high conviction plays that will play a vital role in the future DeFi infrastructure. As always, the macro landscape plays a pivotal role in what happens in the next few months, having an understanding of what is going on is crucial, so we will explore that too. 

Opportunity is everywhere. You just need to dig a little.

So, what’s seized my attention this week?

• ChainLink

• Atom 2.0

• MEV

• Layer 1 narrative retrospection

• Is October a bullish month for Bitcoin?

• FED pivot (or not?!)

ChainLink

The wise Rektomodies shared an excellent thread on the best videos he has watched in September. If you aren’t following this man you a truly missing out. Knowledge and wisdom galore. A true gigabrain.

Eric Schmidt and Sergey Nazarov at SmartCon

One that caught my attention was a conversation between ex-Google CEO, Eric Schmidt, and Sergey. I started digging into ChainLink shortly after. Here is the video if you want to check it out. ( I highly recommend it)

Chainlink Articles and threads

I believe ChainLink is a fundamental piece of infrastructure that is way ahead of the pack. If you are interested in digging deeper, I recommend first researching the oracle problem in the blockchain.

What is the BlockChain Oracle problem?The essential takeaway is this: How do you connect the web2 world to web3? Smart Contracts will only reach their full potential when off-chain and on-chain data can seamlessly communicate. Oracles are the middleware that facilitates this communication, and ChainLink, my anon DeFi friend, has placed itself at the very core of this realm.

Interested in finding out more? You can then get into the plethora of information that ChainLinkGod has put together.The ultimate ChainLink Research ArticleAlso, check out this great thread about the future of $LINK.

MEV

Maximal Extractable Value

Just like it sounds, MEV is the maximum value that can be extracted out of a block. It involves users building bots that reap tiny fractions of rewards but when culminated can offer lucrative returns. So far $672M worth of value has been extracted from Ethereum this way.

The process involves an intricate flow from MEV searchers > Transaction Bundles > Block Builders > Block Proposers.This bankless article was super useful in breaking it down. It also explained why ETH 2.0 is set up to ensure that stakers are the ones benefiting. Ethereum Watershed

COSMOS 2.0

Cosmoverse went down last week.

As expected, they revealed some promising changes to the mechanics surrounding the Cosmos Hub as well as tokenomics of Atom.

There have been a lot of good threads covering the changes with Atom, but If you have the time then you may as well read the ATOM 2.0 Whitepaper.

Changes include:

• Issuance rate will reduce to 1% yearly in the long time frame but to do so will be far higher than before for the next 8 months.

• Mesh security allow an interconnected decentralized approach to security for chains in the cosmos ecossytem.

• Liquid staking is coming.

• Interchain Scheduler & Interchain Allocator essentially generate revenue via renting blockspace

ATOM is looking like a very promising token to hold.

Here are some of my favorite threads:

Layer 1 Rotation

After stumbling across ChainLinkGods medium I found a really intriguing article around the Layer 1 narrative last year. The concept of programmable money is pretty bonkers when you really think about it. Last summer was a crazy time, with a constant cascade of capital flowing between up-and-coming Layer 1’s. The Layer-1 Chain Rotation Thesis: A Retrospective Analysis

Simply spin up a new fork of ETH, boast less traffic, cheaper gas, faster transactions, new sparkling tokens, and watch the money flow.

Keeping an eye out for new narratives potentially developing for the next run is a wise move.

• Real yield has been evident recently

• Privacy Coins

• Proof of Liquidity

Macro

Do you even macro dude? The financial markets ebb and flow in a reactive system, having an understanding of why tides shift is a superpower. Here are the macro resources I dug into this week. You should check out the All in Pod if you haven’t before, never fails to cause a laugh. This week was a good one covering topics such as the FED, debt, and Russia. Key takeaway: The economy is screwed, we’re playing chicken with a KGB agent and no one has a clue what’s going to happen.

Bullish October?

October has notoriously been a bullish month for BTC, with only one out of the last 7 years producing a negative monthly return.

Guess what was happening during this period?The FED was raising rates.

Is the FED going to pivot? Will they reduce interest rates? Today all equity markets have rallied in what the Twitter chamber hopes of QE.

Is that likely to happen?This Interview with Jim Bianco was enlightening on the subject.

“The FED has to pivot right?!”

Well, no. The FED has to stop inflation and they will break something trying to get there. We have yet to see anything break.

Jim quotes Powell in saying, “Yield rates have to go above the CPE inflation rate”

Core PCE was Recorded at 4.9% in August, with nominal rates currently at 3.25% any reduction in rates seems entirely unlikely.

Jim explained three reasons why the FED would pivot.

1. Evidence that inflation is falling

2. Financial crisis

3. Recession

Inflation rates aren’t showing signs of falling, and we have yet to see any signs of a financial crisis, well, apart from the UK destroying the pound/bonds/pensions (and then saving via QE).

So, in my foolish humble opinion, I do not believe we will see the FED pivoting anytime soon.

Conclusion

What did I conclude from my research this week?

1. Atom and ChainLink have a lot of potential to be a core part of the crypto infrastructure going forward. As such, LINK and ATOM have moved into the portfolio list alongside ETH as high conviction plays and will begin scaling when markets look favorable.

2. The Macro outlook is bleak. I don’t believe the FED is going to pivot anytime soon, even with the UN pleading… Till next time anon!