The Quarterly
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The Oracle of DeFi: Are You F**king High?
Protocols have lost a combined $394 million to oracle and price-manipulation exploits since 2020. The root cause isn't thin liquidity — it's the mark-to-market fallacy itself, smuggled in from TradFi and assumed to hold where it cannot.
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The Oracle of DeFi: Are You F**king High?
Protocols have lost a combined $394 million to oracle and price-manipulation exploits since 2020. The root cause isn't thin liquidity — it's the mark-to-market fallacy itself, smuggled in from TradFi and assumed to hold where it cannot.
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Sybil Disobedience: Cypherpunks Code Rights
A document alone cannot protect human liberty. It never could. Only systems that make oppression too expensive can. In decentralized systems, code is law — not as metaphor, but as reality.
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Crypto's P/E Ratio: Price-to-Floor (P/F)
Market cap is borrowed from equities and smuggles in the marked-to-market fallacy. P/F — a token's price divided by its true price floor — gives a cleaner measure of risk, applicable across all crypto assets over time.
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Building Secure Hyperstructures
Password-protected. A working paper on the design constraints of non-upgradeable, immutable protocols and how to harden them before deployment.
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How To Make Fuck You Money
Bitcoin is not 'fuck you money' yet. It's permissionless, but not private — and censorship-resistance requires both. The infrastructure for true monetary sovereignty hasn't been built; the path to building it has three steps.
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Nerds, Normies, And Grifters: Keeping Crypto Weird
Every subculture dies the same way: geeks build it, MOPs dilute it, sociopaths extract from it. Crypto has unique tools to resist that arc — token-gated spaces, profit-oriented builders, and a fanatic class that can still convert outsiders.
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Actually Quantifying Decentralization
Password-protected. A first-principles measure of decentralization that goes beyond Nakamoto coefficients and validator counts.
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Building Defensibility in Open-Source Crypto Protocols
How do you compete when your competition knows your secrets? Five moats — network effect, Lindy, documentation, brand, and gas efficiency — and how each builds defensibility without breaking open-source.
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The Hierarchy of Value Capture
The more value a protocol captures, the less defensible it is. Mechanisms can be ordered by tokenomic leverage — and only monopolies can sustain the high end. Uniswap, Curve, Synthetix, and what McDonald's understood that most builders miss.
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Tokenomics 101: The Principles of Tokenomics
Three principles — utility, value capture, and economic security — and the tradeoffs between them. The demand-side tokenomics framework, distilled.
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Tokenomics 101: The Principles of Tokenomics
Three principles — utility, value capture, and economic security — and the tradeoffs between them. The demand-side tokenomics framework, distilled.
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Building Valuable Hyperstructures
Hyperstructures inherit blockchains' properties, but most fail at the one that matters: capturing value. Without it, builders create billions in utility and see none of it. Why high prices are temporary, fueled by speculation, and what value capture actually requires.
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Value Capture and its misconceptions
Two biases warp the way crypto thinks about value capture: utilitarian (assuming value creates value) and teleological (reversing causality to prop up beliefs). The Labor Theory of Value lives on through 'BTC must rise because security depends on it.' It doesn't.
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Valuation Methods: Finding PQ
PQ represents the total value of purchases made with a cryptocurrency. Two ways to find it: direct on-chain observation, and orthogonal proxy metrics for chains like Monero where surveillance fails.
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Terra (LUNA) Tokenomic Post Mortem
Shady dealings notwithstanding, it was Terra's tokenomics that caused its demise. LUNA's value came from a single use case — collateralizing UST. When Anchor's 20% yields collapsed, the death spiral took the chain with it.
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Why Market Cap Is A Bad Metric
Market cap is borrowed from equity valuation and smuggles in the marked-to-market fallacy. Even 'fully diluted' is only a partial fix. Circulating supply — coins that actually moved in a time frame — is the right input for the equation of exchange.
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What is the Equation of Exchange?
MV=PQ is as old as economics itself — first derived by John Stuart Mill, referenced by Adam Smith, popularized by Friedman. It's the foundation of cryptocurrency valuation in the ESC framework.
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Equation of Exchange: M, Monetary Base
M, the monetary base, is what economists solve for when they want to find the minimum supply of a currency needed for commerce. In crypto, prices appreciate instead of supply expanding — and price floors emerge.
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Equation of Exchange: Simple Examples
A worked example of MV=PQ at human scale: a mechanic buying parts in CNY, then scaled up to cryptocurrencies. The mechanism by which a currency's price appreciates to meet demand for its use.
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Equation of Exchange: V, Velocity
Velocity is the average number of times a coin in circulating supply changes ownership. The higher a coin's velocity, the lower its price.
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The economics of #Monerun and the hidden benefits of rehypothecation
Exchanges stand accused of selling Monero they don't have — rehypothecation, the same trick fractional-reserve banks pull with cash. Counterintuitively, for a coin used primarily for real-world purchases, rehypothecation may stabilize price rather than wreck it.
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Valuation Methods: Calculating M, Monetary Base
Reordering MV=PQ to solve for M lets you find the price floor of a coin given just three inputs: circulating supply, velocity, and total purchases.
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Valuation Methods: Identifying Circulating Supply
Circulating supply is the number of coins actually in circulation. It can be defined any way you like — the key is consistency across components of the equation of exchange.
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Valuation Framework: Cryptocurrencies
Cryptocurrencies get their value through use as a medium of exchange. The equation of exchange — first derived by John Stuart Mill — gives us a way to calculate fundamental value, separate speculative premium from price floor, and identify support.
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Equation of Exchange: PQ, Total Purchase Amount
PQ — the total value of all purchases made with a currency in a given period — is the demand side of the equation of exchange. Together with velocity, it determines a currency's required monetary base.
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Valuation Components: Circulating Supply
Circulating supply is the number of coins in circulation. The time frame is arbitrary — what matters is that it's consistent across all components of the equation of exchange.
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Valuation Components: Total Addressable Market
TAM is the total amount of value which could be expected to flow through a cryptocurrency across all use cases. All else equal, the larger a token's TAM, the higher its price.
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Tokenomics 101: Tokenomic Levers
Three types of levers act on the equation of exchange: supply (burns, staking, lockups), demand (fees, collateral, dividends), and velocity (mostly theoretical, since constraining velocity tends to break fungibility).
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Tokenomics 101: Tokenomic Leverage
In the physical world, leverage multiplies force. In tokenomics, leverage multiplies value capture. Synthetix's 3-5x leverage is only possible because the protocol has a monopoly — high tokenomic leverage requires extreme defensibility.
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Tokenomics 101: Value Capture
Peter Thiel called value capture the 'most important, yet least understood' aspect of business. Inadequate value capture leaves a token vulnerable to economic exploits — a problem that compounds when other protocols build on top of it.
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Tokenomics 101: What Are Tokenomics?
Tokenomics describe how a token's use affects its price. Good tokenomics prevent bad actors from destroying a network. Poor tokenomics leave it vulnerable. Munger: show me the incentives, and I will show you the outcome.
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Token Economic Analysis, Token Flow Modeling, and Token Engineering
The equation of exchange applied at the micro-level. Three goals: a token analysis script that pulls on-chain data, a Sankey-style flow model, and a token engineering framework that uses both to design protocols for maximum value capture.
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The role of Bitcoin in the coming Cashless Society
Under a fully cashless society, agorists and crypto-anarchists imagine a technocratic dystopia. The reality is more nuanced — even with bans, cryptocurrencies remain accessible and liquid, and politicians will leave themselves an out.
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Hijacking Bitcoin, narratives, and the nature of truth in cryptocurrency
Cryptocurrency is the most competitive industry in the world. How does one discern truth among all the competing claims? Narratives are necessary for human comprehension, but those out of touch with reality doom those who operate by them to failure.
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Bitcoin dominance is a flawed metric
Bitcoin dominance assumes BTC is comparable to every other cryptocurrency. But BTC is no longer a currency — it's pursuing 'digital gold' positioning. Apples-to-apples comparisons would use Total Addressable Markets, not aggregate market share.
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The Bitcoin Trilemma
Of the three desirable properties of a blockchain — decentralization, security, and scalability — pick two. Each of Bitcoin's three forks chose a different pair: BTC, BCH, and BSV correspond to three positions in the trilemma.
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Trustless stablecoins solve economic abstraction
Tether's backed model lets infinite stablecoins be issued without increasing the underlying asset's price, opening the chain to double-spend attacks. Dai's collateralization mechanism increases the price of the underlying — offsetting economic abstraction risk.
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Bitcoin Is Digital Platinum
'Bitcoin is digital gold' is a popular trope, but BTC's unique value proposition was as a permissionless payment network with a native asset. A better analogy: digital platinum — scarce, durable, and actually useful in its own production.
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Blockchain, not Bitcoin? Legitimate non-cash uses of blockchain
Blockchains are redundant databases. Most data doesn't need the 100x overhead. The exceptions: censorship-resistant voting, prediction markets, and selectively archiving controversial content on-chain. The common thread — anything threatened by state force.
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Bitcoin Valuation and the Importance of Adoption
Using SWIFT as a proxy for Bitcoin's addressable market, the equation of exchange yields a conservative $50 million per BTC by 2030 — but only with adoption as a medium of exchange. First-world users don't need Bitcoin. Venezuelans do.
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Explaining 'Price Follows Hash'
JPMorgan claimed Bitcoin was overvalued at $8000 because it deviated from costs of production — a recycled Labor Theory of Value. In bull markets, hash follows price. In bear markets, price only appears to follow hash, as marginal miners get undercut.
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The Goldilocks Principle and Bitcoin Forks
Each Bitcoin fork can be summarized by its ideological preference for transaction volume vs. decentralization. BTC fetishizes one, BSV the other; BCH alone strives for sufficient levels of each to retain utility as a medium of exchange.
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Who Is Mystery Miner 'Satoshi Nakamoto'?
An unknown miner calling itself 'Satoshi Nakamoto' appeared on the BCH chain and amassed 37% of network hash. Examining the block version numbers, the source isn't Calvin Ayre — it looks like a Bitmain test pool optimizing for profit, not a malicious entity.
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Investor Series #5 — Binance Coin
BNB is best valued as a currency, not an equity. Running the numbers through the equation of exchange with fee discounts as the demand driver gives a fair value of $0.35 in Q2 2019 — suggesting BNB was 70x overvalued, riding speculative demand.
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Investor Series #4 — Bitcoin SV
BSV's bet is to be the data storage layer of the internet. Modeling its costs against Google Cloud's $0.007/GB coldline pricing, BSV can technically undercut Google if miners stay near three. Even at full adoption, the equation of exchange yields just $869 per BSV in 2030.
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Price Floors In Cryptocurrencies, Part Five
The sturdiest price floor in any currency comes from the denomination of goods and services in it. Once a closed-loop economy prices its goods natively, the floor stops moving — Big Mac Index logic applied to crypto.
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The Finger Trap Effect: The mechanics of BTC's downward spiral
BTC is in a perpetual bull trap. Price rises attract speculators, who fill blocks, who create high fees, who alienate merchants — and the value foundation collapses. The cycle reverses itself the moment speculative interest tries to lift the price.
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5 Reasons The Lightning Network Can't Scale (And Remain Decentralized)
Lightning's economics price out third-world users; its UX requires 24/7 node operation under threat of fund loss; routing demands instant knowledge of channel balances at scale. With custodians it becomes the existing banking system. Without them, it doesn't work.
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How to Explain Cryptocurrency Valuation to Your Grandma
An email exchange with Grandma about the equation of exchange. Why is another valuation method needed? Isn't the value just what someone will pay? The answer turns on the difference between a price floor created by demand for goods, and a speculative ceiling.
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Why Bitcoin Maximalists…
Maximalism stems from a faulty understanding of money — treating it as special rather than as a good like any other. Tide detergent, cigarettes, and food are all currencies in their target markets. What makes money valuable is utility, not collective faith.
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How to Value Cryptocurrency: The Equation of Exchange
Cryptocurrencies are not stocks or commodities — they are currencies. The equation of exchange, MV=PQ, was used by John Stuart Mill and Milton Friedman to model fiat money; it works for crypto too. A worked example with US dollars, then WidgetCoin.
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Investor Series #1 Addendum
Bitcoin can't scale to SWIFT volumes without second-layer solutions, and Lightning isn't ready — Gavin Andresen called it 'an order of magnitude more complex than Bitcoin.' Adoption is the metric that matters, and BTC has stalled. Bitcoin Cash continues the original scaling path.
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Investor Series #1 — Bitcoin
Using SWIFT as a proxy for Bitcoin's addressable market and running it through the equation of exchange yields a 2030 Current Utility Value north of $50 million per BTC. The point isn't the number — it's the framework for justifying any assumption you'd care to test.
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