Dear Subscribers
Polymarket is the story of the day, with over $500m in volume in 2024, and widespread accolades for the prediction market’s role in tracking & cementing the possibility of Biden dropping out of the 2024 Presidential race. Months ago, experts would have scoffed at the idea, but today Dr. Jill is massaging Biden's weary shoulders, reassuring him that he isn't some doddering old fool who clung on to power too long, but her doddering old fool, her special guy. You, dear reader, are my special guy. Thanks for subscribing.
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While much of the left, and anyone voting for Trump would have agreed that Biden belonged in a nursing home, many in the corridors of power, the centrist, liberal establishment remained firmly behind their man until quite recently. Biden was “the only guy who can beat Donald Trump.” Today, the conversation is whether Biden should step down from the Presidency now, or if he can last till the election. How does a culture, the media, the political class move so far in such a short time? In many small steps. The existence of (semi) liquid markets showed us in real time that it was a real possibility that Biden would step aside. Each public gaff, forgotten foreign leader’s name, and especially that debate performance meant more articles on the topic, more whispered conversations about alternatives, and crucially, an increase in the odds Biden would drop out on Polymarket. These markets became part of the conversation, they were shared in the stories, talked about by family & friends who could care less about crypto. The mere existence of the markets themselves, along with the price action, implied the likelihood of new possible futures, and then they were actually unfolding before our eyes.
Two moments from my own life recently affirm the role Polymarket played in this spectacular reshuffling of the chess board, and also give me pause about participating in prediction markets as a retail trader. If Polymarket is a truth-seeking-machine, most retail users participating in such markets are nonetheless playing a sentiment game. They are betting on vibes. Sometimes these vibes will be correct - in this case, for example, you were right if a year ago you were already convinced Biden was over the hill. You would have been “right” to enter a prediction market and put skin in the game on that conviction, but should you have done so? I’m not so sure.
When talking about things like ‘the corporate media’ it’s important to remember that we are all subject to widespread bias in the media we consume, regardless of our political affiliation. We are what we watch and read, whether our sources of truth are right-wing edgelords posting reels of Biden falling down stairs, long-posting about DEI in the secret service, or dem loyalists replaying clips of Biden fantasizing about beating up Trump behind the gym in highschool, feverishly long-posting court documents from Trump’s latest run in with the law. Our feelings about what's happening become, for most, to mean what’s happening, and those feelings do not emerge in a vacuum of pure, rational information. Worse still, no matter how good we are at identifying the bias of some media, we rarely like to think about our own.
Proximity to information is power, in more ways than one. Two weeks ago, I was in New Hampshire visiting a friend who comes from a wealthy family. His parents have friends who are so-called “super donors” and the buzz at the lake house was that Biden was done, it was already decided, and those donors were raising $50m for Gretchen Whitmer. Here were people much more attuned to a party insider discourse than I was, and yet their ‘truth’, their ‘future’ was as speculative as the one I imagined. I added to a ‘Biden drops out’ position on Polymarket, but did not put money on Whitmer replacing him. I should have put money on Harris, but I did not.
Yesterday, I was driving home from Maine when my phone started buzzing with messages from my group chat with 20 college friends. One of them, Jason (fake name), grew up in an exclusive suburb outside of D.C. and knows a lot of people in the blob’s orbit, people who served in so-and-so’s cabinet, who made a career in Bush, Obama or Trump's State Department. Jason had shared some ‘insider info’ about Biden, and everyone was freaking out. People were tagging me, asking how they could make money on this info. I told them about Polymarket, and a few of us placed bets before the news broke on Twitter a few hours later.
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Ethics of betting on Biden dropping out of the election using ‘inside information’ aside, the fact that I happened into two concrete pieces of information about Biden’s chances of survival in the weeks prior to his announcement tells me that there are others with much greater proximity to power, people who mainline what becomes truth before us plebs. The real question for us retail users of Polymarket is whether people with access to information are betting on a market, and whether as people without such access we should, or should not.
Ironically, it would have been much more profitable to have bet on Biden dropping out based on my own basic analysis of his health: I’ve been a ‘Biden isn’t all there’ guy for a long time. But those feelings were just vibes, and it very easily could not have gone my way. It was far safer to use what little concrete info I had, when I had it. It was my friends & their connections who had the real goods, who were most proximate to reliable source of what became the truth. I was only useful to the group chat because of my proximity to crypto, to Polymarket.
In the future, before you speculate on some politician or another doing something, it may be useful to ask: is there someone in the world who knows what this outcome may be at this moment in time? Are they betting with me, or against me?
ETFs & Presidents
ETH ETFs launch Tuesday, July 23rd. Market action is positive, and paired with Trump’s rising chances of victory and his campaigns embrace of some key pro-crypto stances, we are positioned for a summer and fall bull run into the election this November. I’m not a macro analyst, nor really a financial analyst at all, but I’ll say this: I doubt that Trump’s campaign is happy that Biden is dropping out. Biden was really a gift to Trump. in 2020 Trump lost because lots of people really disliked him, and Dems ran hard against Trump as a threat to democracy, an extremist, a populist. Jan. 6th only cemented this in the minds of many. The plan was basically to run this winning strategy back, but Biden’s rapid, public decline changed everything.
Instead of hitting Trump on issues popular with the Dem base (Roe, the Supreme Court ethics scandals, lawsuits, Jan. 6th, etc) Biden mainly whispered, and his age & mental state dominated the news cycle. Trump & Republicans have been in charge of the narrative, which has been whether Biden is unfit to be president now, or again.
Now, Trump will have to shift strategies. I anticipate a closer race, regardless of whether its Harris or someone else on the ticket, which may affect our little markets given that crypto is now openly a partisan political issue.
Parody Accounts
The hottest thing on Farcaster are accounts making fun of Farcaster. We have multiple fake Dans, fake Jonny, and fake Ted. The only one I really like is Ran Domero, all of the others are mid. It’s nice to see the linked-in vibes get shaken up a bit, and the Farcaster cult (of which I’m certainly a member of) could use some more self-awareness. Ran has made me laugh a bunch of times, which is not typically what I show up to Warpcast to do.
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I worry a bit that the jokes aren’t going to last, Ran has already created a channel, /rando, and 4484 preemptively launched a meme-coin on Party’s new token-creation platform, which Ran did NOT appreciate.
/rando will probably launch a token, feels sort of inevitable, but until then we’ll vibe. Stop trying to guess who runs the account, yes its probably one of the 100 people on here who post a lot. Knowing would ruin it.
$MIGGLES and Ape.Store
Base is sort of back, but not in the way that we might have expected. A bunch of cool projects are featured on Devfolio’s Onchain Summer quadratic voting leaderboard, including three built out during FBI x Proxy Studio’s Summer Camp. Side Bets by Saumya and Zora Cart by Harpal are two of my favorites.
But as much as I love what everyone is building, when I say Base is back I mean it in the most…base way. Meme tokens, vaporware, is trading up again on the Coinbase chain. There are a bunch of examples but the biggest is $MIGGLES.
Woj explains what happened with $MIGGLES well.
Besides the fact that $MIGGLES went up, a LOT, its important where the token came from. We’ve seen a bunch of Pump.Fun forks, most have languishhed in relative obscurity, but Ape.Store seems to have ‘clicked’ recently with speculators. It’s where $MIGGLES launched, before it began three straight days of pump from sub 1m mc to 100m mc. Other ape.store tokens, like $CTO (peak: 10m), have performed well.
I can’t handle the pump game, its too frenetic and manic for me, but a lot of people love it, and pump has been where most of the huge SOL memecoins have launched. it is nice to see people talking about Base again on Crypto Twitter, buying tokens - and maybe one day they’ll start using our consumer crypto apps too.
$BASED
Another Base project to keep your eyes on is also a Farcaster native token, and one of the more interesting tokens I’ve seen: $BASED or BasedEvo (Based Evolution). Full disclosure, the founder Garrett is a friend and a long-time Proxy Studio subscriber, so I’ve been following this project since launch.
In February, 2023 Coinbase announced the testnet launch of Base, an Ethereum L2 and issued a commemorative, Zora open-edition mint titled “Base, Introduced,” on Ethereum Mainnet.
Limited to 1-mint-per-address, the commemorative NFT was widely minted - in part due to speculation that minters might qualify for a future $BASE token airdrop. As we all know, no $BASE token is coming anytime soon, but in February 2023, 400k+ people took the chance and minted the NFT.
BasedEvo is distributing a meme token, $BASED, to people who “evolve” or “redeem” their Base, Introduced NFTs during three redemption periods. The first period ends on July 26th, and offers 500k $BASED tokens per NFT evolved.
The token supply will be based on the amount of NFTs redeemed in the 3 redemption periods, 50% of the supply is allocated to users who redeem their NFTs, 35% reserved for LP, 10% for future airdrops, and 5% for “based experiments.”
Please note that several people have been sweeping Base, Introduced floor, evolving the NFTs and then re-listing them on Opensea. The basedevo account has made clear that people who do this will be penalized in some way. I'd just evolve the NFT, and then leave the token in your wallet to make sure that you receive your token claim without issue.
Before buying the Base, Introduced NFT, I also recommend using the basedevo.fun website to check if an NFT has already been redeemed or not, so you don't spend $9 on an alread-redeemed NFT.
Why is this worth your attention? Tokens often try to achieve healthy, wide distribution. The basic concept of BasedEvo is to use a massive existing token holder base, one of the largest, and most-aligned with the Base narrative, to bootstrap attention. The meme BASED is also pretty straightforward, and has probably already been featured on 100 tokens. But I anticipate that the gradual evolution or redemption process of basedevo, combined with increased interest in Base tokens will create some buzz around this one, and encourage you to take a look. It also helps that the founder seems to have pretty straight-forward and positive intentions, this isn't about extracting profit personally, there is no founder token allocation.
Moxie
Everyone is wondering: what is Moxie? Its the hottest new airdrop & protocol on the network, and no one has any idea what the hell is going on.
Moxie is a protocol developed by the Airstack team, but I’m actually not going to try and explain Moxie to you today. First, I recommend you read the docs. What I can do is help you understand how to ‘play’ the Moxie launch, coming up on July 29th.
First of all, if you're active on Farcaster you probably have a $MOXIE airdrop to claim. These airdrops are vested for 180 days, so you won’t be able to sell them, but you can use your full airdrop immediately to buy and sell Fan Tokens. Aside from the $MOXIE token, the protocol always has something called Fan Tokens.
Fan Tokens can belong to a user or a channel, and are sold first in Batch Auctions. This means that during a batch auction, a fixed amount of Fan Tokens are available for purchase (10% of the follower count of a channel or a user account). You enter the price you are willing to pay per Fan Token, and how many you want to buy. The batch auctions will finalize at the average of all bids, so if the closing price is lower than the bid you submitted, you’ll receive a refund and the Fan Tokens. If the closing price is higher, you will be able to claim your $MOXIE back but will not get any Fan Tokens.
After the auction closes, anyone can buy a Fan Token on the bonding curve. Fan Token supplies have no cap, and supply will go increase if more people buy them, or go down in supply & price if people sell them. After the auctions, Fan Tokens will trade on a bonding curve - there will always be liquidity to buy and sell Fan Tokens. All Fan Tokens are denominated in $MOXIE. So you'll either have to use your airdrop to buy Fan Tokens, or buy $MOXIE on the market.
At launch, Airstack has white-listed a bunch of users and channels for Fan Token Auctions. Most of these accounts and channels will be familiar to you, so how do you know which to buy? And why should you buy any?
The way Moxie works is that on launch, every account and channel earns $MOXIE rewards. These rewards are determined based on Airstack’s “Cast Score” system.
Rewards are automatically distributed as follows:
50% to the member who casted
20% to their Fans (holders of their Fan Tokens)
20% to the Fans of the Channel casted into (holders of their Fan Tokens)
10% to Fans of Farcaster overall (holders of the Fan Tokens)
Imagine that I cast in /openventures and it’s a real banger. The. cast earns a high cast score, and gets 10,000 $MOXIE rewards for being highly engaging. 20% of those rewards go to my fans, people who own the “proxystudio.eth” Fan Token. 20% of those rewards go to people who hold the /openventures Fan Token, and 10% goes to people who hold the Farcaster Protocol Fan Token. I get 50% of the rewards.
15% of the overall $MOXIE token supply, or 1.5B tokens, are reserved for Farcaster Engagement Mining. On launch, most users will care about their airdrops, buying Fan Tokens for people who typically earn a lot of Moxie, and earning Moxie themselves for producing ‘quality content’ on Farcaster.
So, how do you play $MOXIE launch? My advice would be to peruse Airstack’s Fan Token auction schedule, and use one of several Dune Dashboards freely available.
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Find accounts that earn a large amount of $MOXIE per day, and try to find ones with lower followings, who are slightly less well known. Because these accounts may have less followers, the initial supply of their Fan Tokens will be lower. You might end up paying more $MOXIE per-Fan-Token, but all that really matters here is how much $MOXIE you are earning from holding these Fan Tokens.
Example
Linda’s auction is on July 29th - August 1st. There are 36,991 Linda Fan Tokens available at auction. On average, Linda earns 6,597 $MOXIE per day. Linda has earned 547,616 $MOXIE all time.
Proxy Studio’s auction is on August 1st - August 4th. There are 1,770 Proxy Fan Tokens available at auction. On average, I earn 8,738 $MOXIE per day. I have earned 742,798 $MOXIE all time.
This data tells us that my Fan Token would earn a holder more $MOXIE rewards than Linda’s Fan Token. However, I could stop casting so much (earning less $MOXIE) and Linda could post hot takes and great content (earning lots of $MOXIE). Further, a lot more people know who Linda is, so there may be more secondary market demand for her Fan Token than mine. We don’t really know yet the effect low or high supply will have on Fan Token pricing during auction, but I expect it will be fairly predictable. The point here is that a big name is not necessarily the Fan Token to speculate on here, unless you just want to flip the Fan Token itself. If you want to ‘play the Moxie game’ its best to look at the data and find high daily Moxie earners.
The last tip is that many of the top $MOXIE earners for the initial airdrop are not large accounts, but Frames devs. Building frames using Airstack API qualified some devs for huge initial airdrops, and if they continue to build frames, they may earn outsized $MOXIE rewards.
Identify these devs, or anyone you think may build something directly on Farcaster that incorporates Moxie - frames, cast actions, composition actions - or leverages Airstack tools. These people could earn a lot of $MOXIE, and their Fan Tokens may be overlooked on launch unless they have large followings. Next week, I’ll go into more depth on how Moxie protocol works, what Moxie is, but I hope this helps prepare you a bit.
Closing Remarks
Thank you for reading my first newsletter. I’ve been on a two-week vacation, and am quite excited to get back to Farcaster. I’ll be toying with this newsletter structure, and trying to make it as relevant as possible for you all. Please help support my work by sharing the link to the hypersub newsletter tier, and as always - remember to survive. Our little market is growing, if slowly, and opportunities await. Don’t die now betting big on vapor, have some patience.
Best,
Proxy
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