August 9, 2023: How to Predict the Future 🎱🔮
The noob's guide to finding alfa
The future may be murky, but if you squint you can often penetrate the fog. In crypto, where there’s more information than any one person can absorb, the “alfa” is oftentimes in plain sight, if you only know where to look.
Here are some tips on where you can look if you want to get good at predicting the future. It focuses heavily on our core competency of the Curve ecosystem, but the principles should apply just as well across all of cryptocurrency.
Watch Governance
DAO governance may be nimble when compared with TardFi, but it can be slow due to the realities of onchain governance. If you want to allow your DAO sufficient time to vote, you have to have votes play out over at least 24 hours to accommodate the global nature of crypto.
A governance proposal must encode an action to be taken onchain. If you are a coder, you can pretty easily decipher what is going on. Here is a Curve governance proposal
Coders can use this calldata to replicate the outcome. Here is how one might do so using Ape Framework.
Or, for non-coders, DAOs often need to build support for governance proposals, so they usually have easily comprehensible text explaining what it does.
In this case, it looks like it could be something worth keeping an eye on…
Follow Incentives
Similar to following governance, understanding the pipeline of how liquidity flows can tell you its patterns and where liquidity will flow in the future.
By the time emissions hit the Curve frontend and tell of sky-high APYs for the quickest to pull the trigger, it’s actually coming at the tail end of a week of intense jockeying. For the period, protocols rush to send incentives to their Curve gauge ahead of the Thursday deadline.
On Curve, gauge changes happening each Thursday are forecast on the DAO Gauge Weight page.
These future gauge forecasts, of course, sit downstream from the various flywheel birb protocols. You can forecast how gauges might be affected in advance by looking at Stake DAO’s Vote Market
Or Votium incentives
For users of $crvUSD, you can see changes to borrow rates published on each market page, which can tell you if rates are stable or volatile.
To get this information upstream, you can follow the factors that affect this number (ie crvUSD price peg or Peg Keeper debt stats) and move in or out before the numbers take affect.