Not Investing Advice

Not Investing Advice explores the intersection of finance, technology, and governance, with a focus on web3, decentralized finance (defi), cryptocurrency, and how technology impacts traditional financial structures and societal governance. It critiques growth hacking, lending practices, market design, big tech dynamics, shareholder voting, and global commodity reserves.

Decentralized Finance (DeFi) Cryptocurrency Governance Market Design Technology in Finance Corporate Governance Commodity Markets Social Media Regulation

The hottest Substack posts of Not Investing Advice

And their main takeaways

The Market for Promises

923 implied HN points • 13 Jun 22
  1. Financial assets are essentially promises to exchange items in the future based on certain conditions.
  2. Trust plays a key role in trading promises, requiring an effective legal system for enforcement.
  3. Blockchains offer a new way to enforce promises, potentially revolutionizing finance in developing countries.

The Structure of Competition between Cryptocurrency Exchanges

137 implied HN points • 07 Jun 23
🔮 Crypto Competition Exchanges Market Dynamics Regulation
  1. Crypto exchange ecosystem is competitive with over 100 active exchanges in the US trading similar assets.
  2. Binance and Coinbase listing new tokens increases trade volume on other exchanges, making them complements not substitutes.
  3. Small exchanges rely on market maker arbitrage with Binance/Coinbase for liquidity, showcasing the 'leader' role of large exchanges in crypto markets.

Growth Hacking and Decentralized Finance

334 implied HN points • 08 Jul 22
  1. Growth hacking prioritizes customer base over product development.
  2. Profitability is often ignored in the growth phase of startups.
  3. Naively applying growth hacking in finance, like promising 20% risk-free returns, can lead to significant challenges.

Automated Market Making and Loss-Versus-Rebalancing

78 implied HN points • 27 Jun 23
💰 Finance Cryptocurrency
  1. The paper discusses Loss-Versus-Rebalancing as a model for AMM liquidity provision.
  2. Comparing AMM liquidity provision to a centralized exchange strategy shows AMM position underperforms.
  3. Hedged LP-ing could offer a smoother payoff profile compared to non-hedged LP-ing.

Big Tech Bloat and Efficient Markets

117 implied HN points • 18 Nov 22
  1. Big tech companies like Google and Facebook could run inefficiently due to lack of competitive pressure in product markets.
  2. Capital market pressures on big tech were low due to factors like founder/exec-favored governance structures and overvalued tech stock prices.
  3. Changes in tech prices and CEO dynamics may lead to increased capital market pressures and potential for hostile takeovers in big tech.
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The Market for Meaning

137 implied HN points • 26 Aug 22
  1. Tasks perceived as meaningful often pay less than tasks not perceived as meaningful.
  2. The demand for meaning in labor markets is high, but the supply is limited.
  3. CEOs can attract skilled labor by synthesizing and selling meaning, while keeping a large share of the rewards.

Soulbound token-collateralized loans

176 implied HN points • 03 Jun 22
  1. Traditional lending involves either secured or unsecured loans.
  2. In web3, unsecured lending can be facilitated by soulbound token-collateralized loans.
  3. Soulbound token-collateralized loans tie identity and reputation to borrowing, creating incentives for repayment.

Market Design for Text-to-Image Generation

98 implied HN points • 01 Oct 22
  1. Consumers providing data for tech firms' AI models should be paid.
  2. Creating a market for art inputs in text-to-image software can be ethically and economically beneficial.
  3. Market design for text-to-image bots has the potential to improve AI output and help compensate artists efficiently.

Yield Farming as Growth Hacking

137 implied HN points • 25 Apr 22
  1. Yield farming in web3 is like growth hacking using newly issued equity instead of discounts.
  2. Yield farming works by issuing equity tokens with governance and cash flow rights at lower costs than traditional methods.
  3. In yield farming, users who sell equity before dilution benefit, while the protocol owners balance between gaining adoption and diluting themselves.

Shareholder Voting and Social Choice

98 implied HN points • 28 Jul 22
  1. Shareholder voting is designed to aggregate information from shareholders, not solve a full social choice problem.
  2. Majority share controllers can use their power to benefit themselves at the expense of other shareholders.
  3. Shareholder voting works best when all shareholders are aligned in maximizing the company's profits.

The War for Eyeballs

58 implied HN points • 16 Apr 22
  1. Social media platforms control valuable eyeball time.
  2. Governance of social media platforms is crucial due to their control over eyeball time.
  3. Regulation may play a role in determining the future governance of social media platforms.

The Not Investing Advice Podcast!

19 implied HN points • 17 Jul 22
  1. The podcast covers recent happenings in defi and analogies to traditional finance.
  2. The first episode discussed topics such as the Celsius bankruptcy and collateralized lending in crypto.
  3. The podcast is co-hosted by Anthony Lee Zhang and Max Resnick from Risk Harbor.

Commodities runway

19 implied HN points • 08 Apr 22
  1. Above-ground oil reserves are surprisingly small compared to daily US oil usage.
  2. Storage costs for oil are high, leading to complex and costly arbitrage opportunities in the oil futures market.
  3. When considering commodities like food, electricity, and oil, it's important to assess the 'runway' or the amount of reserves available in case of emergencies.

Transaction size caps for defi protocols

0 implied HN points • 09 Apr 22
  1. Implement transaction size caps to prevent large defi hacks by limiting the amount that can be traded in a single transaction.
  2. Include a kill-switch that allows developers to stop potential hacks by monitoring transactions and intervening if necessary.
  3. Consider manual approval for transactions over a certain limit, with a cost attached to rejection to align developer incentives and prevent discrimination.

Governance Games

0 implied HN points • 03 Apr 22
  1. Governance games illustrate the challenge of aggregating individual preferences into social choices.
  2. Introducing aggregation mechanisms can help coordinate group actions in governance games, like in Twitch Plays Pokemon.
  3. Governance games involve splitting tasks meant for one person among multiple people, making seemingly simple tasks difficult.