How can we survive the THORChain/Maya bear? 🐻
THORChain and the Maya Protocol are two of the most important cross-chain decentralized exchanges out there.
And they're doing great business! THORChain alone generated $30 million in protocol revenue last year, while businesses that integrated it earned another $25 million! 👀 This is a significant number in the crypto world of today.
But the price of both native assets (RUNE and CACAO) just hasn't done that well, especially compared to the rest of the space during this bull market.
There are lots of reasons for this: liquidity providers underwriting Savers and Lending, market manipulation, general FUD, knock-on effects from certain assets underperforming, etc. etc. But the result is the same:
Investors in both profitable projects haven't been exposed to that profit!
So how do we fix this and stay in profit until those assets start to turn around? How do we survive the RUNE/CACAO bear?
Short answer: I don't know. 🤣
Long answer: I have an idea I wanted to workshop:
Maximize REVENUE exposure, NOT APPRECIATION/DEPRECIATION exposure.
Basically, for THORChain this would look like providing liquidity into the highest-APR pools. For example, Tether on Binance Smart Chain is at a staggering 288% APR! 🤯
Certainly this carries a different set of risks, but with that high APR, it seems like a much more logical way to maximize profit than to just hold RUNE and watch it keep going down (for now). And, the stablecoin aspect is nice since it removes half of the volatility potential for the pool.
For Maya it would look the same (Tether on Arbitrum is at 44% APR), except you have an additional option: the MAYA token. This token's holders automatically earn 10% of the network's fees, generated in CACAO. No impermanent loss volatility, just revenue earning.
So maybe for Maya you split between MAYA and high-performing pools.
Why isn't everyone doing this already?
I don't know.
Seems like a lot of people don't like the risk of exposure to some of these token pools for less-trusted chains. Seems some may not fully understand the economic dynamics of the system, and just think "Oh I'll buy RUNE or just provide liquidity into a pool of an asset I already like."
I'd bet some people might just be in the old-school mindset of "I buy the coin that sounds cool and I'll get rich," i.e. Bitcoin. This mindset is so strong in crypto, people's brains default to "which one do I buy?" whenever I tell them about anything cool!
NONE OF THIS IS FINANCIAL ADVICE! I'm just mentally working through how THORChain and Maya supporters can be exposed to profits, not losses.
Okay, tell me what you think. Tell me if I'm right, if I'm wrong, and why. And if you have a better idea for people who want to buy into the cross-chain vision and benefit from its success, I'm all ears.