Investment Opportunities in the Blockchain World

• Alternative to local national currencies (hedge for inflation)
   
• Store of Value (scarcity, portfolio diversification, seizure resistant..)
   
• Remittances
   
• Global Immutable Database

Value Drivers & Market Opportunities

Key Stats

Bad 

Great 

Private Offshore Wealth

Resillience Stack

Components of Cryptoeconomic Evaluation:

• The project requires a token to work
   
• Properly aligned incentives across stakeholders
   
• Mechanism to maintain scarcity
   
• Mechanism to generate value
   
• Mechanism to generate network effects

Things that accrue value:

• artificial shortage - buyback and burn (Binance)
• profit sharing (securities!)
• running the platform infrastructure , receiving fees (Renprotocol)
• network effect (Ethereum)
• decentralised governance (Decred, MakerDAO)
• ownership rights (NFTs, STOs)
• PoS with slashing (Cosmos)
• Forced token utility (Celsius -- hard to do)

Staking

Ethereum staking payouts schedule

Ethereum staking - Risks and Costs:

- Computing Costs:
$120/year for a beacon node and $60/year per validator client
 

- Acqusition Costs:
32 Ethers (locked up)
 

- Code Risk:
Consensus & Client side

- Maintenance Risk:
Uptime (Internet, HW) & Hot Wallets

Decentralised Finance

• 0x/AirSwap -set of open smart contracts for exchange of Ethereum based tokens. Developers can leverage these tools to create ‘relayers, --> essentially application interfaces that allow users to trade in a decentralised manner -->off-chain order books with on-chain settlement
• Augur/Gnosis - decentralised prediction market around any event . --> ‘wisdom of the crowd’ --> great hedging tools. anyone can create a market for around $40 USD and trade outcome shares for a few dollars in fees --> global risk allocation much more efficient
• dy/dx -  creation, issuance, and trading of decentralised derivatives for ERC20 tokens
• {Set} Protocol - indexing and collateralised baskets of ERC20 tokens of ERC20 tokens
• Dharma -  protocol for debt tokenisation in form of ERC20 token. What this means is that anyone can leverage their development tools and smart contracts to originate, underwrite, issue, and administer debt agreements without a central third party.

Layer 3

Layer 2

Layer 1

Layer 0

Earning Interest on Crypto

Dai

• Dai is simply a loan against Ethereum. Anyone can create Dai — all that’s needed is ETH and the technical know-how to use a decentralized app
• Most users — 99.999+% — will never need to create Dai, nor understand how it’s created.
• Dai is always worth $1 USD each
• It can be freely traded like any other ERC20 token
• Anyone with an Ethereum wallet can own, accept, and transfer it
• It can be exchanged without any middleman
• No individual person or company has control over it
• No government or authority can shut it down

More: http://bit.ly/2S72pMF

Dai - How

• First, ETH is turned into “wrapped ETH” (WETH), which is simply an ERC20 wrapping around ETH. This “tokenizes” ETH so it can be used like any other ERC20 token
• Next, WETH is turned into “pooled ETH” (PETH), which means it joins a large pool of Ethereum that is the collateral for all Dai created
• Once you have PETH, you can create a “collateralized debt position” (CDP), which locks up your PETH and allows you to draw Dai against your collateral (PETH).
• As you draw out Dai, the ratio of debt in the CDP increases. There is a debt limit that sets a maximum amount of Dai you can draw against your CDP.
• Once you have Dai, you can spend or trade it freely like any other ERC20 token

Dai - Why

• You need a loan, and have an asset (ETH) to use as collateral for your loan

• You believe ETH is going up in value. You can use your CDP to buy ETH on margin — you lock up your ETH in a CDP, draw Dai against it, use the Dai to buy more ETH on an exchange, and then use that ETH to further increase the size of your CDP.

--> without any third-party or centralized authority
 

• The demand for Dai drives the price above $1 USD. When this occurs, you can create Dai then immediately sell it on an exchange for greater than $1 USD. This is essentially free money, and is one of the mechanisms the Maker system uses to keep Dai pegged to $1 USD. Dai being worth over $1 USD encourages more Dai to be created.

Dai - Peg Mechanism

• If Dai < $1 USD, CDP owners can pay down their debt at a cheaper price!
• fe. CDP with $1000 in ETH --> draw out 500 Dai

to close the position --> pay back 500 Dai (paying debt destroys Dai).

• If Dai < $1 USD, then buy cheaper DAI (fe 0.99 USD) --> pay off debt with a 1% discount == free money — $500 loan (500 Dai) --> 500 Dai for $495 (0.99 * 500 = 495, a 1% discount)
• --> demand for Dai increases its price, until it approaches $1 USD.
• If Dai stays below $1, CDP owners continue to pay down debt and remove Dai from the system.
• --> When Dai goes above $1 USD, Dai is created to feed the demand. It is this push and pull, creation and destruction, supply and demand which ensures that Dai always matches the $1 USD peg.

Dai - taking a loan

1. Deposit ETH to Metamask
2. Wrap ETH --> WETH (via Dai.makerdao.com)
3.Exchange it for PETH (pool eth), used for collateral
4. Create CDP (the loan)
5. Lock your PETH collateral
6. Mint new DAI (max. 60% of collateral)
7. Exchange DAI for ETH at Oasis DEX
8. Send ETH to any exchange and get EUR, BTC etc.

Repaying the loan

1. Get some ETH
2. Exchange it for DAI (which you owe) and MKR (for governance fee) on Oasis DEX
3. Return DAI to the smart contract and pay the fee in MKR
4. You cancel CDP smart contract
5. Unlock your PETH
6. Exchange PETH for WETH
7. Unwrap WETH --> ETH
8. You have your ETH back

Thank you!

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