For those who know, I'm sticking to my promise of becoming more technically savvy and less concerned with the actions of influencers. In this case, however, dragging Meet Kevin has a purpose.
I feel like Meet Kevin when he was cutting his teeth on Grant Cardone. Those Cardone videos made Kevin what he is today, and rightfully so. He pointed out some real holes in Cardone's strategy along with possible fraud.
But as they say, if you live long enough, you become the villain. With his latest shill piece, Kevin attends more to the health of his channel than he does to the health of your portfolio. If you are a crypto investor, you're in the right place. Unfortunate that noobs who listen to Kevin will be making the wrong moves in response to this latest "flash crash." Let's see how we can take advantage of it.
Correcting Kevin's uninformed bullshit on crypto also leads directly into my expose on a more important problem — Chainlink 2.0. See? I'm being technical.
Meet Kevin Doesn't Know Crypto
In his latest video trying to explain the flash crash to his noobie viewers, Kevin repeats every headline he saw from every hack writer who connected the crash to something. I've explained before how these fuckin hacks write headlines and you should definitely read that post to learn why not to trust everything you read.
So Kevvy boy just rattles off the headlines: 1. there was a brownout in China; 2. the Treasury may be looking into banks laundering money through crypto; and 3. there was $10B in liquidations.
Ok, dumbass...
1. The power going out in China doesn't have shit to do with the price of...tea in China. XD XD XD Just because miners can't mine doesn't mean they are putting selling pressure on the market. What kind of sense does that even make? This is Kevin just reading whatever and saying whatever because he doesn't know. He's using his pristine reputation in real estate as cover for his ignorance in crypto. Sad day for anyone who believes him.
2. The treasury looking into bank fraud. Yeah, on this side of the fence, this is old news. Everybody knows banks launder money. And over here, we don't give a fuck. Kevin somehow thinks that traditional finance has this hold over crypto that it just doesn't have. They can have whatever fights they want over there. The entire purpose of our market is to decouple from their nonsense.
3. $10B in liquidations — This is what actually did cause the crash, but Kevin expresses incredulity that leverage could cause that big of a move. If he actually did crypto instead of just putting his shit on Blockfi for a shit 6% return and that suspect affiliate money, he'd know this leveraged wipeout of noobs happens every damn Sunday. What's more, the blockchain proves this beyond shadow of doubt. Kevin doesn't even know that you can actually prove this quite easily by looking at on-chain metrics.
The last point gives us our edge over Meet Kevin's audience. This audience consists of noobs that will likely take his advice to deleverage after the crash. He couldn't have given worse advice. Deleveraging after a crash is like leveraging after a pump. The market just made an unsustainable move in one direction; it has to come back the other way. These moves happen extremely fast in crypto. And although he does give the salient advice to stay in positions because completely getting out of them makes it hard to catch the rebound, he fails to realize the subtle nuance I'm about to give you.
How to Make Money Off of Meet Kevin's Audience
The only overleveraged positions currently allowed in crypto are those ridiculous margins on centralized exchanges. The defi space still runs on a fully collateralized loan system. Yes, you can dig deep into the corners of defi to find overleveraged plays through apps like Unimex and Wowswap. But on the protocols that are doing the real TVL — Compound, Aave, Cream — you can only leverage between 1X and 2X. And this is the sweet spot.
I've been using the safety of the overcollateralized position to beat the market for my entire time in the market. If you are fully collateralized and leveraged between 1X and 2X, time in the market beats the market. All you have to do is stay in. The longer you stay in, the more alpha you capture.
An overly simple example. You have $100,000 of BUSD. You put it in a defi lender and get 5% on it. You borrow $10,000 at a 15% rate. You put that $10,000 into a Pancakeswap yield farm that pays 100% APY. (The shitcoin in the farm is a solid alt that got unjustly rekt from Kevin's "deleveraging.")
You're paying out 15% and bringing in 100%. Pretty easy math. Over time, that math gets better and better. As alts recover, you can add the capital gains from the token to your 100% APY.
This is how you take Meet Kevin's noob money. While they are "deleveraging," you're buying up their coins at reduced prices and taking on healthy, fully collateralized leverage in protocols they can't ruin with their noobery because you're ahead of the curve on defi and in strategy.
And speaking of staying ahead in strategy...
Chainlink 2.0
The Chainlink 2.0 whitepaper contains some very disturbing things that could change how defi operates. The long and short: Chainlink 2.0 is Chainlink's attempt to bring offline data onto the blockchain. This offline data will be used as credentials to verify your identity, prove ownership of offline assets and comply with regulation.
Offline data — On-chain data is data like the price of BTC. Offline data is data like your current physical location or birthdate. You know... the stuff that we got into crypto to avoid giving up.
Credentials — Attaching a reputation to an identity to compare that individual's trustworthiness to another's or to a scale like a credit score. You know... the stuff that we got into crypto to avoid being judged by.
Comply with regulation — Give traditional "authorities" an information honeypot they can use to control crypto.
Some of the most disturbing language:
It is also possible using tools described in this paper for DONs to enforce special trust-model requirements, such as compliance with regulatory requirements. For example, using techniques discussed in Section 4.3, nodes can present evidence of node-operator characteristics, e.g., territory of operation, that can be used to help enforce compliance with, e.g., the General Data Protection Regulation (GDPR) Article 3 (“Territorial Scope”) [105]. Such compliance can otherwise be challenging to meet in decentralized systems [45].
I'm sorry; isn't getting rid of limiting jurisdictional regulation what this space is all about? Why is crypto's premier information delivery service willingly providing information to authorities that they don't need for outdated compliance measures that aren't required in this space?
Oh, I get it. We're so eager to introduce overcollateralization into the space that we're willing to give up our anonymity for it. Yeah, oh boy, I can't wait to turn defi into an irresponsible fractional reserve derivatives playland just like the system we already got!
The way that Chainlink is selling us (or really them) these new changes is that it will bring us undercollateralized loans and other tradfi features. If you introduce credentials to prove ownership of offline assets and credit history, you can create a profile of a user and loan to them based on reputation rather than collateral. The problem here is that traditional authorities hold sway over the systems and scales of "real-world" credit. Chainlink isn't making a new system here independent of the old system's foibles. They are just giving old authorities the power to invade our system and impose its regulations and limitations on it. In return, you can more easily leverage your BTC. Wow.
First of all, like I said, you can already do this. There are little-known apps that let you trade on margin in defi, no questions asked. You don't have to give up any information. It's trustless. If that can't scale to the entire world, good. Perhaps that part of defi should stay small. That way it can't tank the entire system if, let's say, big banks who are known for laundering money and bankrupting clients with fractional reserve shitvesting want to use it.
I wouldn't give a fuck about Chainlink being a government lapdog if they weren't cornering the market. All of these so-called decentralized startups can't wait to announce their affiliation with Chainlink, no matter how hazy or dubious. "We're proud to announce our new Chainlink partnership because we pulled up the Chainlink website twice this week! Thank you, Chainlink!"
If Chainlink becomes the only game in town, then authorities have a chokepoint they can regulate. Oh, you want to interact with defi that uses Chainlink? Sorry, we're gonna need your personal info. Oh, you want a trustless loan? Sorry, we don't determine trust through collateral any more — we use personal credit score now. Yeah, for the people's safety. Oh, you want to participate in decentralizing the network? Yeah, we're gonna need your passport, 24 months of bank records and a lock of hair from your wife's pubes.
It's essential that we maintain choice in defi and disallow Chainlink monopoly status on oracle services. Through them, traditional "authorities" can gain control over the entire defi space. They will eventually force you to fully identify yourself and connect your tradfi banking records to your online identity. You'll then be subject to the same limitations you had in the old world. This may not be a problem for some of you, but if you're so selfish that you can't see past your own interests, then we really don't agree on much.
I'm invested in other oracle projects including Berry on BSC and Band. As I grow in technical knowledge, I'll definitely be looking to create my own oracles for any projects I found. Read the Chainlink 2.0 whitepaper. Perhaps I'm misreading something. If so, let me know about it. If not, let THEM know about it. The individual still has sway in this market. Use your power to say something if you see something going wrong.
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YOUR GUIDE TO MAKING MONEY IN CRYPTO STARTS HERE ---> Making Money in Crypto Part 1
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