digital slowmad

Digital Slowmad newsletter

29 September 2023

📊 Crypto portfolio update

Exposure: 520.7%

Net return: 53.7%

Comments: It's been 6 weeks of choppy price action as both leveraged longs and shorts got whipped on both sides of the range:

So the market is in a holding pattern waiting for the next major event to take prices out of the range.

Anything can happen over the next couple of weeks but in the medium term (over the next few months) I'd expect prices to turn down. The weak macro environment simply isn't conducive for a bull market, and after such a bullish 9 months for BTC I'd expect to see a meaningful pullback before the end of the year.

This being said, the low liquidity environment can quite easily lead to savage rallies that'll wipe out the heavy/leveraged shorts... so here's my take on the situation:

  • Now is not the time to go "all-in" in either direction
  • It might not be a bad idea to accumulate some BTC at these prices, with the expectation of buying more if prices go lower
  • Regarding most altcoins: Either ignore them, or short into rallies

A small minority of altcoins will outperform in this environment (such as MKR), but unless one is deeply in tune with what's going on in the space most people are better off not holding altcoins in this environment. Just my 2cents.

Current allocation:

Details available in private group

🏰 Kingdom Studios announces MythicSwap

Fresh off the press: Kingdom Studios is launching a "new" project, MythicSwap.

This was just announced today so exact details are sparse.

From what I've gathered:

  • This DEX runs an order book system similar to DFK's bazaar
  • MythicSwap will be separate from DFK and will have its own token (MYTHIC)
  • Development of MythicSwap will mostly be a one-time effort that won't sap much development resources from DFK
  • Jewel stakers will have no claim on MythicSwap revenues, though there might be a token airdrop
  • George from CryptosRUs is coming on as an advisor to Kingdom Studios (will likely be paid)

I've been asked about my opinion on this so I'll talk about it. But first, a disclaimer:


I've withdrawn all meaningful assets from DFK (many months ago) but have been keeping tabs on the project in case things turn around. So I have no horse in this race and this is as unbiased as my opinion can get.

Also: These views are based on available info on the day of the announcement. If the facts change, these views may change as well.

Ok, now on with it.

My views

The decentralized order book system works well (in my experience) and should be monetized outside the DFK ecosystem; MythicSwap as a standalone project is a good idea.

However, I think Jewel holders are not being treated fairly.

Let me explain:

Imagine you are a shareholder of a company and the R&D department invents new tech for your business.

Then one day, the R&D director sets up a new company under his own name, and sells that tech as a product without you having anything to do with it (i.e. you don't get any revenue from it).

This is basically how I see the situation.

Although Jewel holders are not technically shareholders, based on what I've observed over the past 2 years (in the Discord and AMAs), there's an implied expectation that everything the devs do to generate revenue should accrue back to Jewel holders. (Tell me if I'm wrong!)

But from what I've gathered, Kingdom Studios' stance is: MythicSwap is a separate project/business from DFK, so Jewel stakers will have no claim on MythicSwap revenues. All such revenues will only go to KingdomStudios and CryptoRUs. (The only consolation is there might be an airdrop for Jewel stakers.)

If I were a Jewel staker (which I no longer am, thank goodness), I wouldn't be happy about this because the order book tech was built on 'DFK development time'. This is no different than in the corporate world where all technology developed on company time (and related to the company's business) belongs to the shareholders, not the developers.

In crypto, of course, the lack of regulation means that token holders are not shareholders.

And with that, we now see a major reason why Kingdom Studios was incorporated.

Previously, it was understood that revenue from all sources would be distributed to Jewel stakers (including the devs themselves). Now, Jewel stakers would only be entitled to DFK revenues, while Kingdom Studios alone would be entitled to all revenues (including revenues coming from DFK-developed tech such as MythicSwap).

So basically: The devs used a corporate tactic to kick Jewel stakers to the curb, not unlike how Eduardo Saverin was cheated of his share of Facebook's later success. 

This has been done in such a subtle way that no one has yet to bring up this point. Many in the DFK community feel cheated but can't explain why and how. Now you know.

Next, consider this: If we follow the logic of "MythicSwap is separate from DFK", then what's to stop the devs from spinning off any portion of DFK into other "new projects" and cut off Jewel holders from those revenues too?

If I were a Jewel holder I'd be very concerned about such a precedent.

All this being said, I can't say I'm surprised that Kingdom Studios has decided to go down this path. It's the smart (though ruthless) thing to do... and given the implied state of their treasury I can't say I blame them.

I only feel sorry for the DFK maxis that keep getting shafted left and right. Many of them trusted the devs to have their interest at heart and staked their Jewel for 3 years. I wonder how they're feeling now. All I can say is, I really did try to warn them.

Hopefully, this article will get the devs to reconsider their approach and better reward the Jewel stakers that supported them throughout the bear market.

📝 Admin update

🤯 Erik Voorhees opening speech for Permissionless II

This magnificent speech gave me goosebumps. Easily the best one I've watched this year.

💬 Quote of the week

Our greatest fear should not be of failure but of succeeding at things in life that don’t really matter.

- Francis Chan

Thanks for reading, and have a great weekend. 🥃


P.S. If you have any questions or feedback, let me know at: chris[at]digitalslowmad[dot]com

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