What is happening with Tether (USDT) trading volume – $13.76 Trillion
Absolutely insane bursts of Tether trading volume last night at $13.76 Trillion…that's over 200x the entire market cap of Tether! What is going on?
— Cryptohippo (@cryptohippo65) November 22, 2022
I would have just presumed this was a charting error, but @DesoGames has reported on these suspicious USDT vol increases before! pic.twitter.com/upRAkvdl5y
For context, the average 24hr trading volume for Tether is around $63 billion.
— Cryptohippo (@cryptohippo65) November 22, 2022
This is a 200x increase in trading volume. pic.twitter.com/tsuRrP1ykG
The Tron based Tether contract has sent $260 billions worth of this unknown token from since 23 October 2022.
— Cryptohippo (@cryptohippo65) November 22, 2022
Can anyone confirm what this "unrecorded token"?https://t.co/6RxESQI6l5 pic.twitter.com/dmIhKGaNXa
I've gone through all the transacgtions and over
— Cryptohippo (@cryptohippo65) November 22, 2022
"8 TRILLION unrecorded tokens" (8,569,848,184,077)
have been sent by the Tether contract.
Anyone why this is?https://t.co/M1OXFGjgBG
Difference between Web2 and Web3
1/ What’s the real difference between Web2 and Web3?
— Chainlink (@chainlink) November 23, 2022
Cryptographic truth.
?? pic.twitter.com/4d1mGh0vnM
2/ Web2 runs on centralized servers that leave you vulnerable.
— Chainlink (@chainlink) November 23, 2022
You have to trust medical companies not to leak your personal details, online stores to protect your credit card info, and social media companies not to censor you. pic.twitter.com/jpGCTfojZf
3/ Society has a trust problem, yet almost all of the world’s agreements are backed solely by weak paper promises—“just trust us” agreements where a central administrator holds all of the power. pic.twitter.com/V3nO7k8RLC
— Chainlink (@chainlink) November 23, 2022
4/ But with Web3, society finally has the technology to create agreements that can’t be tampered with.
— Chainlink (@chainlink) November 23, 2022
Here’s how: https://t.co/fSf7w1CDiE
5/ So what exactly is cryptographic truth?
— Chainlink (@chainlink) November 23, 2022
Cryptographic truth enables anyone to create tamper-proof contracts that can’t be broken.
It doesn’t matter whether you’re an institution or an individual, agreements that use cryptographic truth treat everyone equally. pic.twitter.com/lpMFvRziHW
6/ For example, many farmers in developing nations can't access traditional crop insurance.
— Chainlink (@chainlink) November 23, 2022
Those that can must trust an unreliable claims process.
That’s why crypto matters: https://t.co/qpEgsfKjvv
7/ In contrast, Web3 apps like @ArbolMarket offer insurance contracts backed by cryptographic truth. That means if there’s a drought, farmers are guaranteed to get paid. pic.twitter.com/MwSAyD14n2
— Chainlink (@chainlink) November 23, 2022
8/ Truth > trust.
— Chainlink (@chainlink) November 23, 2022
While trust-based systems have led to failures that undermine society, cryptographic truth provides a path for a fairer and better-functioning society. pic.twitter.com/SOJ9TSjMzm
Why DCG and Genesis may go bankrupt
1/n – Why DCG and Genesis will go bankrupt – All information from public sources.
— degentrading (@hodlKRYPTONITE) November 23, 2022
2/n – I didn't want to write another thread but seeing the media read @BarrySilbert's letter the wrong way really got to me. I dont want to see people get tricked by another @SBF_FTX
— degentrading (@hodlKRYPTONITE) November 23, 2022
3/n – You can read the long form here. https://t.co/WikkyXHATd
— degentrading (@hodlKRYPTONITE) November 23, 2022
4/n – First of all, from Barry's letter himself. DCG in aggregate owes 2.025bn. 1.675bn to Genesis and 350m to external creditors.
— degentrading (@hodlKRYPTONITE) November 23, 2022
5/n – This is way worse than i thought. I thought the hole was just 1bn. Guess i was wrong by a factor of 2.
— degentrading (@hodlKRYPTONITE) November 23, 2022
6/n pic.twitter.com/QPJGpkNePw
— degentrading (@hodlKRYPTONITE) November 23, 2022
7/n – As a lender, in accounting rules loans are "assets" and deposits are "liabilities". Genesis as a borrrower lender is mostly funded by a small amount of equity and deposits.
— degentrading (@hodlKRYPTONITE) November 23, 2022
8/n – Post Babel, 3AC etc, we can safely assume that the entire equity has been wiped out. Since Genesis was noted to have 2.8bn of loans. We can assume there is a corresponding 2.8bn of deposits to fund the balance sheet.
— degentrading (@hodlKRYPTONITE) November 23, 2022
9/n – Given that @BarrySilbert has admitted that DCG owes Genesis 575m and 1.1bn – that means that Genesis's balance sheet looks like this pic.twitter.com/c1N7CocrBG
— degentrading (@hodlKRYPTONITE) November 23, 2022
10/n – The 1.1bn was a hole created from 3AC's default. It was used to plug the hole in the balance sheet presumably so that Genesis could avoid defaulting and being insolvent.
— degentrading (@hodlKRYPTONITE) November 23, 2022
11/n – But as anyone with enough sense can tell you, this is just sheer financial trickery. Unless DCG pays back the money, Genesis's balance sheet looks like this pic.twitter.com/lA2hpzfYq3
— degentrading (@hodlKRYPTONITE) November 23, 2022
13/n – Also BECAUSE DCG took on the promissory note, Genesis creditors HAVE recourse to find DCG for the money. Which is why they suddenly need to raise
— degentrading (@hodlKRYPTONITE) November 23, 2022
14/n – DCG's main assets at this point is (1) Their GBTC stake of 67M~ in shares (2) Value of Grayscale Biz (3) Genesis (probably worth zero)
— degentrading (@hodlKRYPTONITE) November 23, 2022
15/n – It is unlikely that they have much cash on hand given how in the letter, Barry said that DCG took that 575m loan from Genesis to buy back stock from employees and "investment opportunities" pic.twitter.com/NJAQQrRJ1Q
— degentrading (@hodlKRYPTONITE) November 23, 2022
16/n – These investment opportunities was probably MORE GBTC…which kept on dipping. pic.twitter.com/4UQnGppfmI
— degentrading (@hodlKRYPTONITE) November 23, 2022
17/n – How much is the Grayscale biz really worth? The earnings mostly come from GBTC and ETHE. At current BTC and ETH prices, this works out to be ~280m in revenues. Given costs should be low, we can assume this to be earnings.
— degentrading (@hodlKRYPTONITE) November 23, 2022
18/n – However, even at crypto's peak in Nov 21, DCG was only able to raise at 10bn valuation. Grayscale's run rate revenue should be about 1.1bn and Genesis was running at 1bn. i.e At it's peak, DCG was only able to command a 5x PE ratio
— degentrading (@hodlKRYPTONITE) November 23, 2022
19/n – In a market now damaged with a crisis of confidence post FTX, Barry can probably only find buyers at 2x PE or less. Given that the earnings have crypto delta. and crypto is a dirty word now.
— degentrading (@hodlKRYPTONITE) November 23, 2022
20/n – This means that the Grayscale biz can only fetch 560m – 840m….very short of 2.02bn.
— degentrading (@hodlKRYPTONITE) November 23, 2022
21/n – What about the GBTC on hand? They can probably sell that into the stock mkt. However remember that they are 10% of the outstanding. There is appetite in the market for GBTC stock. Going this route probably only nets them 300m at best.
— degentrading (@hodlKRYPTONITE) November 23, 2022
22/n – Which is why they went hat in hand to the SEC for Reg M relief. However there is close to zero chance that the SEC will allow this because the optics of it for the SEC is terrible
— degentrading (@hodlKRYPTONITE) November 23, 2022
23/n – Doing that means that the SEC would allow DCG to redeem its BTC and dump it into the market only. Which is unfair to other investors in GBTC.
— degentrading (@hodlKRYPTONITE) November 23, 2022
24/n – This leaves the only real way to monetize the GBTC stake as unwinding GBTC so that everybody gets out. This is the apocalyptic scenario for BTC with 633k of BTC hitting the market
— degentrading (@hodlKRYPTONITE) November 23, 2022
25/n – The only way for sufficient dollars in the system to bid such a pile is for prices to go low enough. The last BTC will probably clear at 8k (GBTC disc applied to spot) with an avg selling price of 12k. Optimistically.
— degentrading (@hodlKRYPTONITE) November 23, 2022
26/n This fetches him about 750m of cash. Also they get to keep ETHE and the rest of the other businesses
— degentrading (@hodlKRYPTONITE) November 23, 2022
27/n – Regardless of what Barry does…none of these is enough to raise 2bn and to repay the hole in Genesis. This means that Genesis will collapse.
— degentrading (@hodlKRYPTONITE) November 23, 2022
28/n – "It's gonna be a looooong week" and "That daisy chain of leverage" aint looking so good now.
— degentrading (@hodlKRYPTONITE) November 23, 2022
29/n – As the institutional "prime broker" of the space, the collapse of Genesis will lead to even more contagion as many of the depositors are institutions vs BlockFi.
— degentrading (@hodlKRYPTONITE) November 23, 2022
30/n – Depending on whether DCG unwinds GBTC – that leads to 633k of BTC sell pressure or just selling their own GBTC shares in the market (which will lead to 33k of equivalent spot sell pressure)
— degentrading (@hodlKRYPTONITE) November 23, 2022
31/n BTC might go to either 8k or 12k…and we have Saylor looking very nervously below
— degentrading (@hodlKRYPTONITE) November 23, 2022
