Baskerville Jiu Jitsu
Reclaimed Hops 1
Well, this wasn’t a very conclusive poll. Personally, I’d like to get a few more emails out (not just for engagement, but because good content and idea flow is derived from conversation) but as someone who obsessively multithreads content down different pathways (e.g. a newsletter email, personal work email, work email, socials, texts) I can see why blog readers would not want X content and vice versa.
That being said, I am frequently losing things on the internet and link sharing also helps me bookmark stuff and referential search on X and stuff isn’t great. So I’ll try to keep the majority of the posts main ML (I’ll use a different numbering system for posts that aren’t “worthy” of that categorization), but if I see a thread that can be transposed and fit the form, I’ll try and add some links/reading recs to those threads as well, especially old posts from the archive. Ergo, if the main posts are “malt liquidity”, maybe this is a subset of ingredients that were a bit too rough around the edges — Reclaimed Hops.
On the Reddit IPO and profitability:
The most important thing to remember is that showing a profit is for selling a company, whether to the public or an acquirer. Revenue projections are what will determine whether fundamental roadshow investors buy in (FWIW, I don’t think they will). Ideally you don’t want any profits, bc profits are taxed. Revenue growth helps your borrow rate. Taxed income prevents reinvestment. Yeah, eventually people have to get paid, but that’s why you sell to someone else rather than take profits. It’s why “at least you made a profit” is the worst logic. You want the idea to be correct not the variance moving in your favor.
I wouldn’t buy this IPO, “exit liquidity” is the proper term for any post-2014 IPO not named Uber. Some, I assume, make money, but it ends up just being a rates trade unless the business is proven cash printer, which Reddit provably isn’t.
On banking vs fintech vs web3:
You just know that nobody actually knows banking or what Dodd-Frank did or why fintech even exists (it’s a regulatory workaround) when they say stuff like this. The point of money is not wanting people to think about it and look closely, bc the entire concept breaks upon scrutiny (see: Is Central Banking a Religion?). Banking by and large works for everyone other than contrarians and dissidents. Most issues with the banking system are solved by flat out having more money so you don’t have to think. The txn layer has never mattered more than debt-facilitation, which nobody seems to get. Banks do debt facilitation very well! Nobody knows what people in finance actually “do” bc the system is itself so distributed that no one person other than the Fed chair has any control whatsoever. (see: The Theory of Liquidity). But undoubtedly fractional reserve banking is what built the world. Banking is a massively difficult, leveraged, low margin, expensive business to be in. It’s *why* a central bank stabilizes things, you don’t *want* ordinary people worried about their money. Just look at the creation of the Fed and the FDIC and the history of the Great Depression (see: The Leveraged Sellout). Banks *can and did do* everything that a fintech or MM firm or crypto did. It’s just that WF would be fined $130mm in a week for doing a single thing that cashapp has over the past decade.
A PVP system where the best tech savants win is not a better system. It’s a better game, sure. The core issue with crypto is its pure postmodern irony. You can’t build a product just pointing out the flaws endlessly about a system — you need an actual use case. Liquidity is value but there still is not a single practical popular use case out there other than “number go up” (see: 2023 year in review — Cranial Correlation pt 4). It’s why I’m anti-ETF. The ethos is not to add a nifty layer to the existing system. There are improvements to be made but you have to think *outside* the traditional architecture. Being a game is a feature, not a bug. Video game economies can and do exist parallel to “real” ones. Liquidity itself is a value add but in web3 more than anything else, it has to be designed right from the beginning. Liquidity without a use case — even something like playing WoW is a use case — is too unstable. As I like to say, WilE Coyote only made it 4 steps off the cliff before falling.
Odds and Ends:
Jia Tolentino on the failures of the rollout of legal marijuana (NYer)
FT on Runescape (note: I am working on “stories from the Grand Exchange” myself)
Book rec: Systemantics by John Gall. I talk a lot about systems and their generalized principles (e.g. liquidity theory), but here’s a more careful examination with examples in a more common book format. Referred to by some as “The Systems Bible”).
Comment question: What level of math do you consider “advanced” colloquially? For a practitioner in industry? For a college student? For genpop?
Thanks again for being patient folks, looking forward to publishing a lot in March.