These kind of model charts, or however you want to call them, are pretty stupid! Even if they carry some truth, they’re too general to bring some value. They often give you an illusion of being right when you’re not and can lead to fatal actions.

I could also tell you that markets always go up in the long-term or they die. It’s true, but it doesn’t really give you an edge.

Most of the BTC models are in this category, too. All these charts are basically only engagement farming, but nobody really has a serious thought about them.

DeFi Updates

In times of extreme stress, the best opportunities occur. Almost all of LSTs and LRTs depegged on most L2s last week. It didn’t take much time until the peg has been restored.

With a slight leverage, you could have made a pretty good r/r-trade in a very short time.

However, you should be careful with too much leverage in times with extreme stress. A 5x usually gives you enough buffer in case of a stronger depeg.

You can do this manually on Aave or with more convenience on Contango or DefiSaver. More convenience brings more contract risk, of course.

The Mantle cat says, there might be other assets besides ETH in the LSP in the future 👀

Good read and thoughts about Solana.

My thoughts about Solana and the whole memecoin crase is that people are a little too confident about the situation. I’m not saying it’s a bad thing per se, but telling everyone that swapping a few memes around is more valuable than a mature eco system, is short sighted.

Most metrics posted by supporters are just a snapshot in history and nothing more. It doesn’t prove anything.

On the other hand, ETH maxis think they’re superior and totally miss the fact, that most Defi token are basically memecoins as well. People love gambling and there’s a reason why that’s a multi billion industry.

But I also think that’s not enough for a chain to stay relevant over the long-term. Fortunately, Solana is maturing as well.

If you’re hunting for COOK, the Puff NFTs could be a good option.

Pendle YT-mETH play. Hourglass is another candidate to get huge leverage to farm Powder.

With Hourglass, you can get even more leverage for your mETH Powder. For 1 mETH, you get 41 PYT-mETH.

So 1 mETH rewards you with 1025 Powder per day. On Pendle, 1 mETH gets you 30 YT-mETH and therefore, “only” ~750 Powder per day.

However, Hourglass is quite new and I wouldn't deploy as much funds as in Pendle. Hourglass has around $423k TVL in the mETH market on Mantle and $5.62m TVL in total.

You can set limit orders on Odos now. Odos and Oku are my current aggregators atm.

Aurelius Finance’s AU is launching.

Investing

I didn’t do much during the last week. I increased my JLP exposure to hedge a little against a drawdown.

I also looped my mETH with the new Timeswap pools again.

Of course, I shift some farms over the last days. My Notion Site is a more up to date medium, where you can check my current farms 👇

Macro

The conditions are pretty loose already. This shows that they can loose without cutting rates. Monetary policy is just one part, but everybody is too focused on rate cuts.

Will we get a crash when the FED pivots? It happened several times in history when this occurred. But that wasn’t always the case and it depends on the whole market situation.

As I wrote in the last letter, the Yen carry trade is still one of the big risks, which could tank the whole market. Are affected parties closing their trade after the BOJ wake up call? The question is how many are under water, so they can’t close their position and how much of the unwinding will flow into other assets.

Deutsche Bank estimates that there’re up to $20T in this Yen carry trade by the way. But it’s not the size that’s so dangerous, but the movement that could come to roll all of a sudden.

Also what will happen if the FED cuts? Will it have an impact on this?

JP Morgan thinks that 50% of the trade are already out. However, everything is just speculation. But one thing is sure… we will get a massive liquidity injection.

Abruptly, the recession topic is in everybody’s mouths again. The US economy doesn’t look too bad, but I think most of the gov data is screwed.

The recent event just shows how fragile the system is. A small interest rate change from the BOJ just caused one of the worst drops in years. And one minor unexpected event could tank the whole markets before the liquidity flows into our precious assets.

Being too pessimistic on the other hand, is dangerous as well and can let you miss the whole party. Difficult times.

If you’re interested in one of the following projects, I appreciate if you’d use my code!

Mantle Methamorphosis (Gets you 10% extra Powder):
https://meth.mantle.xyz/campaigns/methamorphosis/seggsy
Rabby Wallet (Best EVM wallet):
https://rabby.io/rabby-points?code=SEXYLIFE
Spot On Chain (Analytics Platform):
https://platform.spotonchain.ai/referral?code=0r3wi0eg6n33
Karak (Restaking):
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Stay Sexy!

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