As we approach crypto ATH, it's worth asking yourself what's changed since 2017?

Well here's a brief history of people/events that brought us from 2017 to today

(A newcomers guide to the last crypto bear market)


It all began with the perpetual swap in late 2017 - conceptualized/popularized by @CryptoHayes & @Bitmex co.

This one instrument has minted a handful of crypto billionaires, so it plays a pivotal role in our story!

But what made @BitMEX perp swap so successful?

1) As prices fell through 2018, $BTC whales/bagholders had nothing *useful* to do with their $BTC but HODL

2) So when $BTC margined perp contracts w/ MM rebates came along, the yield seeking $BTC HODLers came too.

3) While the HODLers came for the yield, the degens came for the leverage (upto 100x)

4) As the degens+HODLers fought it out in the markets, the quants made the money. They played convexity, rebates, and the trading engine to gain million dollar advantages.

In parallel to the perp swap, @cz_binance and @binance were quietly building something entirely different...

A customer service machine built for the global retail trader. And to this day, it remains the largest retail trader playground.

What did @binance do so well?

- Deep liquidity for alts
- Customer service around the globe
- $$ Massive SAFU fund

But most importantly, CZ built trust (in a space that lacked trust). And till today we know our funds will be SAFU with him!

With rise of @binance, came the dominance of $USDT - as the most liquid trading pair for $BTC/alts.

The three big exchanges ( @binance, @OKEx , @HuobiGlobal) noticed the growth of $USDT and the deep alt liquidity they possessed, so they decided to compete with Bitmex

The big 3 launched $USDT margined perp swaps (on alts too). And through 2019-2020, $USDT margined perp swaps became larger than its $BTC counterpart.

For obvious reasons, dollar-neutral quant firms/MMs preferred to create alt liquidity with stablecoins.

Underneath the surface though, $USDT had its own set of problems brewing

- No creation/redemption against USD
- At times, a floating peg
- Simply a lack of trust

And this is where @jerallaire @circlepay + @RafaelCosman @TUSD come into the picture

$USDC + $TUSD tackled three key problems that $USDT failed to do:

- 1 Stablecoin == 1 USD
- Verifiable dollar reserves for each coin
- Time-efficient movement from bank acct to crypto, and vice versa.

Quant firms like 3AC, @AlamedaResearch, @ambergroup_io benefitted from $USD ramps, $USD perp swaps, and ofc $GBTC premiums.

Rumor is that the best quant funds effectively doubled their money each year from 2018-2020... just ask @kyled116 @zhusu about the GBTC premium!

By 2019 retail perp volumes were skyrocketing and cascading liquidations became a real problem. So @SBF_Alameda / FTX came up with the backstop engine.

To build such a system you'd need deep liquidity + the technical chops of quants (and the banter of an MIT Physicist)

With the backing of @AlamedaResearch quants and the onslaught of *sophisticated* retail, @SBF_Alameda brought more nuanced instruments to the market (more than any exchange before them):

- Index perps
- Vol contracts / Vol Index
- Presidential contracts
- And more...

To many's surprise, @SBF_Alameda / @FTX_Official went from a relative newcomer to one of the top derivative/spot exchanges in the market (all within the span of a year)

Oh and there was some *leverage token* drama in the middle, but you can google that.

With the centralized exchanges fighting amongst each other for volume through 2019-2020, the decentralize protocol fish were allowed to swim unencumbered from *too much competition*

In that time

- @RuneKek took $DAI to Multi-Collateral $DAI (allowing any ERC20 to mint a stablecoin)

- @rleshner ( @compoundfinance) built money markets, similar in size to its centralized counterparts.

But back in 2019 it was clunky so the mainstream didn't care just yet

Probably the most fascinating decentralized story (if only for the David vs Goliath style) was that of @haydenzadams + @UniswapProtocol

I came across @haydenzadams sometime after their $ETH foundation grant but before the mainnet launch.

I remember asking myself why anyone would want to compete with @Bancor. They have >$100M war chests. Oh boy was I wrong.

@haydenzadams designed the simplest/most intuitive interface for token swaps + liquidity providing that I'd ever seen. And with a $100k budget that too!

Oh yeah and he went into debt to get it live. They were so broke that they even sold $SOCKS. Like literal fucking socks.

But it worked out in the end, $UNI + $COMP and several other governance tokens went live in 2020. They turned DeFi mainstream + profitable!

That brings us to today. We are a few months past the $BTC halvening and a few days into $ETH 2.0 (Phase 0).

Prices are soaring. Most who stuck around became rich.

So when the next bear market comes, remember to stick around. I bet the future will surprise you.

Oh yeah and follow @crypto_noodles
You can follow @crypto_noodles.
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