Buy Cherries
The Tomb Fork Saga : Chapter 5
2omb over the peg ... and rising
Yesterday, I told you about how LP stakers and share stakers could have diverging interests. This was some kind of theoretical case. Let’s apply that to what’s currently going on 2omb.finance.
Price of 2omb against FTM
2omb over pegged … and rising!!
4 days ago, when I started to investigate this case, 2omb was trading around 1.2 FTM. 2 days ago, 2omb was around 1.3 FTM, and yesterday, it was still going up, to 1.4 FTM.
Aren’t the smart incentives around that protocol supposed to get 2omb back to its peg all the time? Is the 2omb protocol broken?
Let’s dive in …
I had to understand this funny money printing, so I gathered a few FTMs, and decided I would follow their kind indications and start providing liquidity to the 2omb-FTM pair. To do that, I first needed to swap half of my FTMs for 2omb. But wait … 2omb was at 1.3 FTM !!! Hey, do you think I am the kind of animal that would buy at 1.3 FTM, something that is supposed to be worth 1.0 FTM?? The whole point of the thing is to go back to peg, so I’m clearly not buying 2omb at 1.3 now!!!
So, if you read LP stakers vs Share stakers from yesteday, you already know what I went for: strait to the good stuff. I went a few streets away, to a bar I know called the SpookySwap, and fired all my FTMs to get a nice wad of 2shares.
After that little visit and a few drinks, I went back to the 2omb.finance laundry, and skated all my 2shares. Was I really about to get all that juicy cash within the next 6 hours?
Let the money rain
I had to do it to be sure it was real. I had to feel the flow of cash in my hands. And I felt. 6 hours after I had staked my 2shares, I was receiving 1% of their value in 2omb. I waited another epoch, then got distracted by a pretty gazelle coming into my bar. Time passed, and when I came back to my case, 2ombs were accumulating. I had pocketed a 4% yield in just 24 hours, paid in freshly printed 2omb.
I remembered how an old rhino had once told me, that cryptocurrencies had been invented in reaction to central bank funny money printing … well, I’ve just fact checked this is plain wrong, haven’t I?
I had the cash in hand, but it just did not feel right. I know algorythms can get pretty clever sometimes, but an algorythm cannot ejaculate 4% yield per day in a world where US Treasuries give less than 4% a year. This value had to come from somewhere. Ponzi? Money laundering? Witchcraft? Was my soul slowly being channelled to hell while 2omb was flowing in my account?
Dump the funny money …
As epochs were passing and my wad of 2ombs was getting thicker, I was getting uncomfortable. At night, I dreamt of an Otis elevator endlessly going down. Was my soul being corrupted? I wanted to get out.
I could not unstake my 2shares, because I was already too addicted to the flow of 2ombs in my wallet. But at least, I could get rid of the 2ombs. So I sold all my 2ombs for FTMs. As 2ombs were at 1.4 FTM, it was even better for me. Not only do I get a pack of 2ombs every 6 hours, but these 2ombs are currently sold at the premium price of 1.4 FTMs.
This is now my lazy life. Around twice a day, I harvest my tombs and dump them on these stupid liquidity providers who toil for maintaining the system, while I just profit from it.
Welcome to the 2 room casino
The 2 room casino
I had cracked the case: 2omb, Tomb, and all the other forks were not ponzi nor vampcoins. They were 2 room casinos: the second rooms (the shares room) lets you win insane money, but first, you need to play in the first room (the LP stakers’ room), to slowly accumulate the right to go in the second room.
Because I was not any stupid animal, I had gamed the system, by directly buying my ticket to the second room. End of the story …
… One thing wasn’t clear though. The second room is where the money printer is. And it prints like crazy. I am probably not the only bloke dumping that funny money on the LP staker heads in the first room.
But that should make the price of 2omb go down: money printing + selling of the currency printed: two rock solid reasons for a currency to fall in price. Any orthodox economist will tell you that.
So how on earth is the price of 2omb still going up??
One last visit
So I returned to the 2omb casino, using my little sideway to the second room. I’m only going to the first room when I exit the casino. The first room is where I convert the 2omb tokens I got in the second room into real FTM money. Each time I go there, it seams to me that more people are entering the casino.
Here, in the shiny second room, I looked around at what the other 2share stakers were doing. Then I got it. I knew why, even 40% over the peg, 2omb was still rising. And I knew it was not going to stop. Oh no, the money printer is definitely not going to stop any time soon.