Market Update for Week 2022-08-08

Published: 2022-08-15

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All of the round data referenced below can be downloaded from here. The data is part of a project that downloads round data periodically and uploads the csv.

Ethereum Proof of Stake Migration

Have you heard? Ethereum is moving over to proof of stake. I wouldn't fault you if you hadn't heard, it was only announced more than two years ago. It's been long delayed and pushed back, but it's apparently happening September 15, 2022. I think anticipation of the merge has something to do with the volatility of Ether over the last few weeks/months.

I'm skeptical of proof of stake. A long standing criticism of Ethereum has been that their coin, Ether, has no real monetary policy. There's no real cap on supply and even the growth rate isn't known. For instance, no one can tell you with certainty how many Ether will be circulating 5 years from now. With Bitcoin you have certainty what the exact amount will be. Here is a graph of their issuance

Ether issuance

The distribution of coins is also far from egalitarian. Bitcoin came around at the perfect time, at the perfect conditions that set off this crypto market. Every other coin was (more or less) created in its shadow by opportunists. It's not all bad, as there was a lot of room to improve on Bitcoin and accept different trade-offs. But the creators of the new coins saw the value a new coin or blockchain can create, and tried to capture as much of that value for themselves.

What does this have to do with Ethereum PoS migration? I see a proof of work fork continuing to operate. Why not right? It'll be called "Ethereum Classic" or something, but the money is there and a lot of the old Ether miners will want to keep it going. It'll likely be worth a fraction of the market cap of Ether 2.0, and many miners will drop out, but it'll be worth something. And exchanges will likely list both because they make fees either way.

There will be a lot of hype and action leading up to the merge. I think the overall market cap of ETH legacy and 2.0 will be more than pre-merge, much like Bitcoin split into Bitcoin and Bitcoin Cash kept legacy Bitcoin at around the same price, so the Bitcoin Cash was just a kind of nice dividend for people holding Bitcoin. I'm unsure how exchanges that don't handle Ethereum legacy will handle it and whether they'll credit Ether holders the coin in some other means, but if it is worth something, they'll have to do something to compensate users holding Ether.

The other thing I think will happen is a lot of insider holders of Ether will play some games in a self-serving way. I think overall Vitalik is honest and a good stewart, but there are a lot of other large holders. The incentive is too high and the migration will be a big change. I don't know what it'll look like, but there will be movement.


Volumes continue to drop. Not much else to add there.

It doesn't look great. I hope the PS guys do something. They kind of hid away the BNB games and now default to CAKE/BNB pair which no one wants. It's annoying that they keep doubling on this shit coin when they have a cash cow. They should also lower fees. 3% makes a huge difference. There are a lot of strategies that are profitable at 2% but not at 3%. And these people aren't playing.

Winners and Losers

Note that these are winners and losers from the last 3 weeks.

Placeaccountgames playedwonwon USDWinnings Even MoneyAverage bet size
1 0x706db23375e4808344af82115b7b0f05437739c5 61 53.47 11,122.0 5.96 5.57
2 0xfcf58e5d4e2debf15ef1627e91dd8e366e733cdc 146 23.44 4,875.0 -1.14 0.5
3 0x63844d978799754de7d4e7401e9950ad70f62405 115 19.82 4,122.0 0.46 3.64
4 0xeb6dc04fabbbbeaefd6e68385e9fc515a6ee43a1 133 18.71 3,892.0 7.01 0.69
5 0x4857b63272928751edf22609fe8f50b069b863ec 324 15.85 3,296.0 34.15 0.48
6 0x4437950da24c967f66a5258fe126bd36ecf11768 59 13.85 2,881.0 -4.85 3.31
7 0x89bb80b57a27fd30f00b47071c8344d9fca781e9 28 13.34 2,775.0 6.11 1.27
8 0x0693d8ddb29ac5ed320dd29def57e5fa60afed22 72 13.28 2,762.0 -0.7 3.19
9 0xab71c0cf92fc57e9ccca646e85b313d470fa985e 64 13.05 2,715.0 30.87 0.41
100xdf15ebd6e1204359a331236dd76a54a03aa8071b 162 11.47 2,385.0 12.15 0.91

Few big winners. No one is cracking 100 BNB wins anymore, and volumes of the winners are down. Our top dog got lucky on a few games, and only won 6 games even money. Some of the winners are actually down on even money, meaning they had a few luck big bets but overall their strategy is a loser. Not very inspiring.

I usually praise the algo players because let's be honest, if you're betting large and winning, you're just lucky and that luck will eventually change. If you really do have an edge you'll play often and bet small. But you should also consider their even money winnings. Even money winnings normalizes the bet size to 1 BNB. If an algo-bot played 460 games, and only won the equivalent of 16.53, that means their edge is 3%. That's solid but it could easily shift. It's just a very thin margin to play long term.

Let's look at the losers

Placefromgames playedwonwon USDWinnings Even MoneyAverage bet size
10x69b5de00de2a10df806feeab64aa7ff988266051 378 -117.81 -24,504.0 -10.84 4.95
20x792f0dd8e8c9416c1a5325fd8730f6463242d5c7 142 -82.28 -17,113.0 -6.17 5.57
30x7f9f833f28ae5f5afa7a9714c9958cde3ec6f7aa 714 -45.95 -9,557.0 -22.23 1.38
40x9a6b4cd49fad073fdf566f82a4858e8713555ea4 159 -38.82 -8,075.0 -20.48 0.81
50xd820b68e7c4e822692a805567f4b57e832730533 822 -37.28 -7,755.0 -16.43 1.5
60xf40297d1d5f142fbdce0b178d11618afba2d1dba 105 -36.75 -7,644.0 -10.49 1.54
70xc1f265e222c5a4b6c8c536f9cc138c648518b6ac 165 -29.71 -6,179.0 -9.2 2.66
80xaaede87806c0f8a3ed671f104cb927dfb5daf2a9 194 -26.47 -5,505.0 -14.63 1.07
90xfaded83f9cab5f8975ca34395c01c3e455ffdb93 827 -25.86 -5,380.0 9.54 0.79
100xacb96427d63c00eadf8ae0c9c595b3ffc2f98152 454 -24.13 -5,019.0 -4.32 1.49

Losers be losing. The algo bots dominate the loser board this week. And it makes sense because volumes are down, which means odds against you more when you bet which all translates to big losses. If you're betting 5 BNB into a 15 BNB pool, you're moving even odds from 2.0 to 1.6, and that's before the fee!

Anyway, sending love to all our losers. Keep your head up and keep playing.

As always, feel free to reach out with questions or comments or want my to highlight anything different on my weekly market recaps. If you like what you read and want to subscribe to receive an email when a new post is published, click here.

Good luck and bet responsibly!