So to clarify for those who don't care to know about defi, 2 people made on-chain leveraged bets with up to 2X leverage (which isn't a ton compared to what some people do).
If they are up 120M when ETH has gone up ~26% since it's low point of the last 30 days, they must have deposited ~150M to start with.
Looping 3 times, and borrowing ~80% of their deposit value each time (pretty close to the max for most defi protocols), they would have borrowed (likely in a stablecoin) 120M, then 96M, and finally 76M, giving them a total deposit of 442M worth of ETH against a borrow of 292M of the stablecoin.
After ETH went up by 26%, their initial 442M deposit is now worth 557M. Had the value of ETH gone down 21% at any point from the beginning of their levered position, their initial stake of 150M in ETH would have been liquidated by the protocol, so this is an incredibly risky play as you can imagine
The fact that such a large position likely moves the market does at least make it a little bit safer for them, but by that same token, unwinding their position will move the market in the other direction just as easily (so they might only see a 110M in profit if they tried to unwind entirely, at this article was written)
> The fact that such a large position likely moves the market does at least make it a little bit safer for them
I would not be surprised if they had some inside information about some big moves that were likely to move the market in some way. I doubt their entry and exit timing was randomly chosen.
DeBank is a sort of social network, for wallets, so I've linked the two below so that you can clearly see what is going on here.
What nobody here is discussing, is the fact that these wallets already have $1.2B and $1.8B worth of funds in them. Depositing $150m is not a big risk for them.
If you are into DeFi, it is obvious they know what they are doing. These wallets are using money to make money, pure and simple.
While $120M is a huge amount of money, it doesn't necessarily mean they got a huge percentage return. I don't see how much they staked to get this return. The article does mention that the two wallets are collectively worth $3B, and that they used 1-2x leverage in this bet. I'm curious how much they actually bet on this.
Was it a 10% overnight return? That's a fantastic return, but plenty of traditional market gamblers have pulled that off. Doesn't diminish their success in any way. I'm trying to figure out how much they gained as a percentage of the gambled amount, as the actual dollar amount doesn't mean much.
Yeah, it's interesting that the way Ethereum works make it possible to see exactly how the trade worked and how much it made, but "traders with huge resources made a leveraged bet and won" is something that happens constantly.
One time I made nearly 20 times my money in one night of playing poker
I mean, I used to have a poker game pretty regularly with some friends and friends of friends. We'd basically just play until one person got all the chips, but we also allowed buying back in once if you were out before 11 PM. One night when it was especially big, we had a lot of people playing and a bunch of them bought back after going out quickly, and I happened to win that night.
Also, the buy-in was $5, so I won like $95 total
Notice how you can make the story sound really impressive or really piddly depending on how you decide to count it. 20x ROI sounds crazy! Winning less than a hundred bucks doesn't. Also, probably over all the games we ever played I came out about even or maybe a little ahead. I'm okay at poker compared to my friends who played. Not amazing, better than average maybe. But there was no amount of losing that would have represented an untenable risk for me.
Similarly, this article is describing the gains from a single bet in isolation. When you say $120M it's, well, more money than most normal humans will see in their lives (though probably the average income here is more like the top quartile of US incomes), but when you say it's like maybe a 2X ROI on that bet, which represented like sub-5% of the assets of just the wallets making the bet, which I doubt even represents the total assets of whoever owned those wallets (Which could also be jointly-owned), it's a lot less impressive. I'm not sure why it's even worth reporting on unless your goal is to push Ethereum through this kind of number-jiggling for the credulous
Rather, a common belief is that over a long time horizon, the debasement of USD will hurt buying power, and that BTC and friends will benefit from that.
Not such an oddball belief if you look at the change in the value of a dollar over the last century.
Readit News
If they are up 120M when ETH has gone up ~26% since it's low point of the last 30 days, they must have deposited ~150M to start with.
Looping 3 times, and borrowing ~80% of their deposit value each time (pretty close to the max for most defi protocols), they would have borrowed (likely in a stablecoin) 120M, then 96M, and finally 76M, giving them a total deposit of 442M worth of ETH against a borrow of 292M of the stablecoin.
After ETH went up by 26%, their initial 442M deposit is now worth 557M. Had the value of ETH gone down 21% at any point from the beginning of their levered position, their initial stake of 150M in ETH would have been liquidated by the protocol, so this is an incredibly risky play as you can imagine
The fact that such a large position likely moves the market does at least make it a little bit safer for them, but by that same token, unwinding their position will move the market in the other direction just as easily (so they might only see a 110M in profit if they tried to unwind entirely, at this article was written)
I would not be surprised if they had some inside information about some big moves that were likely to move the market in some way. I doubt their entry and exit timing was randomly chosen.
What nobody here is discussing, is the fact that these wallets already have $1.2B and $1.8B worth of funds in them. Depositing $150m is not a big risk for them.
If you are into DeFi, it is obvious they know what they are doing. These wallets are using money to make money, pure and simple.
https://debank.com/profile/0x28a55c4b4f9615fde3cdaddf6cc01fc...
https://debank.com/profile/0x741aa7cfb2c7bf2a1e7d4da2e3df6a5...
Was it a 10% overnight return? That's a fantastic return, but plenty of traditional market gamblers have pulled that off. Doesn't diminish their success in any way. I'm trying to figure out how much they gained as a percentage of the gambled amount, as the actual dollar amount doesn't mean much.
I mean, I used to have a poker game pretty regularly with some friends and friends of friends. We'd basically just play until one person got all the chips, but we also allowed buying back in once if you were out before 11 PM. One night when it was especially big, we had a lot of people playing and a bunch of them bought back after going out quickly, and I happened to win that night.
Also, the buy-in was $5, so I won like $95 total
Notice how you can make the story sound really impressive or really piddly depending on how you decide to count it. 20x ROI sounds crazy! Winning less than a hundred bucks doesn't. Also, probably over all the games we ever played I came out about even or maybe a little ahead. I'm okay at poker compared to my friends who played. Not amazing, better than average maybe. But there was no amount of losing that would have represented an untenable risk for me.
Similarly, this article is describing the gains from a single bet in isolation. When you say $120M it's, well, more money than most normal humans will see in their lives (though probably the average income here is more like the top quartile of US incomes), but when you say it's like maybe a 2X ROI on that bet, which represented like sub-5% of the assets of just the wallets making the bet, which I doubt even represents the total assets of whoever owned those wallets (Which could also be jointly-owned), it's a lot less impressive. I'm not sure why it's even worth reporting on unless your goal is to push Ethereum through this kind of number-jiggling for the credulous
https://archive.ph/EFGPO
Rather, a common belief is that over a long time horizon, the debasement of USD will hurt buying power, and that BTC and friends will benefit from that.
Not such an oddball belief if you look at the change in the value of a dollar over the last century.