The antidote-consuming ‘everything bubble’

Michael Revy
3 min readMay 19, 2022


(or the collapse of Luna Brothers)

times of woe correlations go to 1

Back in 2018, my dApp objective was to allow people to invoice, do payroll, manage a project or make a friendly loan all in ETH or wrapped BTC.

Then I encountered Tether. “Mike, man .. your dApp should do stuff in stable tokens too” was the refrain.

I felt at the time: If you are into crypto, why would you want to use stable tokens? Furthermore, why build an algorithm to manage a USD stable token?

Plus, I read about Tether’s alleged opaque accounting.

The answer to, “ why use stable tokens?,” was taxes. The answer to algorithmic stable tokens was ‘decentralization.’

OK, I understand the death and taxes part. But decentralizing something that is not itself de-central and doing it in some systematic way? It seemed a job for deeper minds.

Businesses using stable tokens to manage invoices on-chain is a function of tax authorities classifying crypto as property.

Why use the blockchain for business at all?

The reason you might still want to use crypto stable tokens would be that you believe the blockchain payment rails are superior to SWIFT and ACH.

I would add that using a blockchain allows you to share/mint a ‘source of truth’ between you and your counterparties. The idea of tokenizing claims between parties might have better externalities than continuing to use two books and a 3rd party reconciliation.

But, wanting a ‘decentralized’ stable token to replicate USD never made a lot of sense to me. Hence, I gravitated to USDC and away from Tether and Terra/XDT.

I guess people hope to profit from ‘seigniorage’ of minting stable tokens or perhaps from ‘trading’ their treasury or token vs the mint and burns of a stable token (?)

IMHO this is speculation and part of my complaint about crypto is that it is used mostly to speculate — and not to improve commerce.

This correction is painful. It reminds us that crypto and BTC are risky and immature. It also reveals a painful irony, as crypto was to be the antidote to the woes and instability of fiat.

The sobering reality is that even though trusting any central bank fiat currency has issues, this recent crypto crash makes trusting that some algorithmic token/scheme deployed on some blockchain may not also self-destruct and create effects as bad (or worse) than fiat.

leverage surprises when correlations go to 1

I am an optimist and BTC is not at zero — even though some 80k in BTC was indiscriminately liquidated supporting a poorly designed peg called UST. The ‘bad’ actor Luna/UST is gone (mostly).

The key difference is no FED rescue plan with preening politicos or an effort by Satoshi Nakamoto to socialize risks and privatized profits a la Lehman (Luna) Brothers.

No Bailout — how refreshing (and bailouts were the stimulus for BTC in 2008).

Fiat stimulus has led to the misallocation of capital in our current “everything bubble.” In an “everything bubble” it doesn’t matter where you are hiding. In the short term, correlations all go to 1.

The longer picture has seen central bank manipulation since 2008 (1971?, 1913?) and I do not ascribe the current inflationary malaise to inventions like BTC.

Remember to distinguish symptom from disease.



Michael Revy