🧘‍♂️ALERT: Risky But Profitable

Market Meditations | December 2, 2021

Massive Crypto Opportunity

Dear Meditators

As we creep closer towards 2022, we like to look for the big trends of next year. This has shaped much of today’s newsletter. 

Today’s Meditations: 

  • DAOs: What are they? What are the opportunities? Are there risks?

  • Institutions in Crypto: Square becomes a block

  • Guilds: Are guilds the future of gaming?

Read, enjoy and share with your network. Let’s all build wealth together.

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Our Market Meditations are longer format educational segments. Each letter features a Market Meditation which will deep dive and analyse a relevant crypto event, theme or tool. 

? Going DAOn?

Decentralized Autonomous Organizations (DAOs) carry with them amazing potential. Put simply, a DAO is a group of people pursuing a shared goal, using a blockchain to make decisions in a transparent and efficient way.

Some DAOs offer unbelievable APYs, while others gather people together in a common cause with lofty ambitions. This is made clearer through considering a few examples.

Examples of DAOs

1️⃣ Olympus is a DAO purposed with establishing a reserve-based currency.

  • Instead of being pegged to the value of fiat currency, OHM receives its value from being backed by an underlying basket of crypto assets

  • This ensures that the value of each OHM token will never fall below the underlying value owned by the protocol’s treasury

  • Olympus (OHM) is currently offering an APY of around 7000%. This yield is compounded every 8 hours at the end of each rebasing period.

2️⃣ HumanDAO is a play-to-earn collective which connects gamers with digital asset owners. 

  • The platform enables users to lend, sell and rent digital assets and tokens which can be used to generate wealth in P2E titles. 

  • Players who provide these assets keep 70% of the revenue generated by using the in-game items. 

  • The remaining 30% is evenly split between the DAO and managers – individuals who oversee the training and onboarding of participants. 

DAO Use Cases

✅ Some DAOs can be staked. 

Once you’ve got your token (OHM for example), you’ll have to stake it on the app accessed through the website

In most cases, you will receive a designated token in exchange for staking. Sometimes these tokens (sOHM) can be leveraged on other platforms to unlock some of your liquidity.

OHM compounds staked balances every 8 hours, rapidly increasing the rate at which interest is accrued. If gains seem too good to be true, they may very well be. It’s almost always better to get out too early than too late. 

It’s Not All Glitter and Roses

❌ Not all DAO stories have a happy ending. 

Last month, a consortium of investors formed a DAO and pooled $47 million in ether to attempt a purchase of a copy of the United States Constitution. When the bid fell short, it was decided that refunds would be made available to everyone. 

Unfortunately for those involved, Ethereum’s gas fees are still high, resulting in potentially losing more than $1.5 million in transaction costs.

DAOs look set to stick around in 2022 and it’s worth increasing our awareness of them.

⬛ Square Changes Name To Block! 

Though crypto prices are stalled at the moment, numerous businesses are paying very close attention in order to best position themselves and their business for the future that crypto has in store. The most recent rebranding was Jack Dorsey’s company Square which is changing its name to Block

  • You may remember Jack Dorsey leaving his Twitter CEO position, but he is still very involved with Square and, further, the support of cryptocurrency. 

  • He said he is looking forward to dedicating more time to Square’s growing portfolio

  • The reason for renaming themselves Block is that they are currently focusing on technologies such as blockchain and trying to grow beyond their original business.

  • The company name change to Block will be effective as of Dec 10

Why is this important? 

Businesses showing interest in crypto are accelerating wider exposure to crypto. Rebranding shows a commitment and belief to the future (in this case, companies such as Meta and Block – previously Facebook and Square – believe that crypto and blockchain technology is the future). Jack Dorsey is a big crypto supporter so it will be interesting to see Block’s progress now that Dorsey is with Block full time

In 2022, we expect more and more institutional interest in crypto.

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➡️ From Assyria To The Metaverse

Early guild-like associations date back to circa 2334 BC in the city-states of Assyria. These were used by shipbuilders and ship-owners. Fast forward thousands of years and they are being used to facilitate digital avatars in digital universes. 

In crypto gaming, guilds have formalised the method of lending in-game assets in the form of NFTs. Take Axie Infinity as an example: communities pair people who want to make money playing Axie Infinity with the NFTs (characters) they need for starting the game. 

Why does it work? Well, it’s a win-win: the lender will receive a percentage of the player’s earnings and the player gets what they need for playing the game (some of these NFTs are very expensive, making the upfront costs and barrier to entry high for some people). 

Since their inception, guilds have proven both profitable and impactful. Perhaps the most notable example is Yield Guild Games; this project raised $12.5 million via an IDO in less than a minute. 

That being said, more guilds are being established and venture capital appetite remains strong. Cointelegraph recently shared an article about BlockchainSpace.

  • BlockchainSpace is a guild hub for play-to-earn communities that aims to scale and accelerate the progress guilds have made thus far. 

  • The platform’s unique tools and features are designed to save guild operators time, provide valuable data and metrics and give guilds access to capital. 

  • BlockchainSpace raised $3.75 million in an investment round led by Animoca Brands, Yield Guild Games and others. 

  • Since then, they raised another $2.4 million with industry leaders such as Crypto.com and Alameda Research. 

As we slowly draw closer towards 2022, we can imagine guilds will be a popular crypto theme.

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??‍♂️✍️ Stories in this newsletter were written by Misael Calleja, Nick T., Max P., Kimia K., Ellen B. and Koroush AK. Graphics were produced by Gerasimos P.

Not financial or tax advice. The content in this newsletter is for informational purposes only. Nothing in this email is intended to serve as financial advice. We are not financial advisors. Every investment and trading move involves risk. Do your own research when making a decision. See our important security disclaimers here.

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