Five bullet Friday - issue #115

    Bitcoin hashrate has recovered 90% from the drop we have seen in May. This is hugely bullish for bitcoin as it basically survived the attack from its largest authoritarian nation-state. 

1.  Bitcoin price movements tend to set the market sentiment/mood for the crypto markets. Most of the development activity still happens on the Ethereum platform. However, bitcoin has the name recognition for an unbroken record of never experiencing any hacks to its network and surviving attacks from nation-states. Most people when they enter the crypto-asset market tend to start by buying bitcoin as it has the most liquidity. The good news is as long as central banks print money, bitcoin will go up. Central banks collectively printed $10 trillion in the last year.

2. One partner asked me this question: What is your hedging strategy as related to OHM tokens if some Black Swan event were to occur which would significantly impact the market value of OHM tokens?. The traditional mechanism of buying put options against your assets is not available for OHM tokens. It is possible to hedge your bitcoin position but not possible to do that for OHM. My other option is to reduce my exposure by selling some coins and moving into other assets, but it imposes serious capital gains taxes on the partners, even if they don't withdraw from the fund.

3. We are currently earning 147 OHM tokens every 8 hours as you can see from the below screenshot. At the current market price of $909, we are earning $133,623 every eight hours or $278 per minute. These assets are backed by other currencies that are in the treasury of OHM. If the price of OHM were to fall below its market value of treasury, the protocol guarantees that it will buy back OHM tokens. This gives me confidence that its market value cannot fall below $634 million. This becomes our backstop for losses. We don't have such a back stop for Ethereum or bitcoin.

4. OlympusDAO also has another metric called Risk Free Value, which is DAI backing the OHM tokens that were issued to the public. This is currently at $165 million. If the price of OHM were to go to 0 in a blackswan event and assuming that I am the last one staking, I get to claim all of the $165 million to myself. It will be automatically be distributed to the last staker. If more people leave the staking contract, there is more left for the remaining folks. In April when we started this number was close to $100,000.

5. I am impressed by the growth of KLIMA Dao. Global emissions are 110 million tCO2 per day. KLIMA already purchased 9 million tons in 2 weeks. This may not sound much but all of this is achieved just by code, not by a centralized company or government. There are a number of factors, that will ensure that carbon offset prices are going up. KLIMA managed to buy 80% of the onchain assets in a matter of 2 weeks, which shows the supply is not able to meet the demand.

My partner, Ravi Avadhanam will be attending New Jersey AAPI (physician association) from tomorrow. He will be in the tri-state area for the next 4 days. If anyone like to meet him, he can be reached at 630-536-4115. Please visit our booth for some swag if you are attending New Jersey AAPI meeting.

Have a wonderful weekend!

Sam Ikkurty