Investor Confidence and Doxing

Hi all, it’s me, your friendly neighbourhood markets guy.

If you want to support these analyses, consider tipping: 0x377083dbb10227f4DB3AbAC8E0Cded026D32D9E5

(in EverRise only – the current amount is 0, and I won’t touch any of the tips for a long time and I’ll tell you before I do. If there is enough there, I will use it to further the analysis process in some way. Like hire a quant or programmer for an hour to get more complete data or something).

Some started calling me ‘Guard’, which is… acceptable. The username really was just an auto-generated Reddit name, I am neither a guard nor historical.

Anyway, today we’re talking about that weird elusive thing, investor confidence. This is basically because I think what’s happened since yesterday is:

1. When the auto-buyback was removed, people realised Titan controls the buybacks.

2. When the auto-buyback was still there, a lot of people maybe didn’t realise that Titan already controlled it.

3. So now people want to know who Titan is, because what if he’s actually like a toddler or a dog? I don’t want my money deposited with a Golden Retriever.

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So, I’ve already pointed out in previous posts that it really doesn’t matter who Titan is, or even if he’s a dog. The randomness of the buyback is part of the thing that makes the incentives protective towards retail investors.

This is basically because the market is always random for retail. It is not random for institutions. That is why an institution can drain a coin and take all your money, because they have enough of a cash reserve that they can make the market tank when they want it to. You do not have that level of reserves.

So anything that makes it random for institutions/big money actually levels the playing field for you. It also incentivises hodling, which is what creates the fundamental value of the token. No crypto has any fundamentals, even bitcoin - it’s all in the confidence of the holders.

So this actually brings me to today’s topic – investor confidence. Questions for today:

1. Why did the market behave so weirdly when the Kraken was turned on?

2. What does this reveal about investor confidence?

3. How could we fix those problems? Should Titan reveal himself (‘dox’)?

Have a seat, Guard’ll tell you a story.

1. So what was up with the Kraken and Bots? Why did Titan keep changing things?

You may have seen slightly conflicting messages that Titan has posted about the Kraken buyback amounts. I don’t remember all of it, but things like ‘ok we found the sweet spot now, it’s 0.5bnb buybacks, that will be the new baseline forever’. Then a little while later, they changed it back to 0.01bnb.

Did he break his word? Is he dishonest? Should I take my money out now?

Well, let’s look at two things: a) even if we assume that he was dishonest, would that matter?, and b) If we don’t assume that he was dishonest, what other reasons might he have had to change the buyback amount (and some other things)?

a) Even if we assume Titan broke his word dishonestly, the deal is still structured in almost exactly the same way

Here I’ve seen a lot of confusion between your normal life and the financial markets. Financial markets don’t have social bonds (or they do to an extent, but not between retail investors and institutions). Social bonds are only binding in long-term, locked in dealings. Your individual business may run on social bonds (you may have long term suppliers and clients that trust you and you extend them credit and they extend you credit to maintain the relationship, for example), but that is not how the global financial market works.

Business owner: My word is my bond.

Financial markets: No, your bond is your bond.

In other words, financial markets are really impersonal. Nobody knows you. You might be a really together and standup guy. You always pay your debts and never declare bankruptcy, even if it’s in your financial interests to do so. You want to take care of your employees and their families, your customers, your wholesalers and your creditors.

You go to the financial markets to get a bridging loan, and you tell them all about your honesty and integrity, and what they’ll say is: “that’s great, now let’s talk about what kinds of bullets you’d like us to load in the gun we’re going to hold to your head and how you’re going to securitise our loan.”

Impersonal investors don’t know you. Basically, this is the same as them assuming you’re going to try to double cross them in some way. So they really don’t listen to what you say, they look at the structure of the deal and invest based on that. Whether you ‘break your word’ or not doesn’t make any difference if the deal structured well. Anyone come to mind who keeps breaking their word but they keep getting business loans? Ever thought why that is?

So Titan said something and then said something else. But the real question is: did anything change yesterday about the structure of the deal you get as an investor?

Not really. If anything, it became more efficient because the gas fees are lower so your money is spent better. There is also more incentive to hodl, which means the underlying token value is protected better. I made a whole post about it here: (https://www.reddit.com/r/EverRise/comments/o6g4pk/market_analysis_of_the_big_buyback_announcement/ )

The only effect this might have is in investor confidence. Hold on to your butts, I’ll come back to this.

b) So why did he do it? What other reasons might he have had to change his mind about Kraken?

I know a lot of you didn’t follow the token’s price development early on, but I did. That’s the only way you’ll know how the thing really behaves in the open market, because the open market is different to general incentives, code or designs.

I have bad news and good news for you: bad news is that Titan and the developers are not God, Allah, Buddha, personification of the all-knowing universe or Superman. The good news is that they’re learning and responding to market problems as they arise.

So what happened that made him change his mind a few times? Well, I think initially Titan left something out of the equation when he triggered the buybacks at higher amounts.

Here’s what a sensible designer / coder might think would happen:

I’ve made something pretty special here. The Kraken has millions. If I turn on the Kraken, everyone gets incentives to buy, because price is about to rise. Everyone buying will actually feed the Kraken, and that sustains the rise even further. Life is good. Might have lunch.

What actually happened:

Event 1 (Kraken @ 60bnb) Kraken had millions. Kraken was turned on. Everyone started selling small amounts. Bots started attacking the Kraken. Price rockets, then crashes, then settles, and eventually continues downswing.

Event 2 (Kraken @ 0.5bnb): Kraken had nearly a million. Kraken was turned on. Everyone started selling small amounts. Price levelled off, but Kraken was slowly being drained. People weren’t following the incentive to buy, which would have fed the Kraken. Instead, they were selling to drain the Kraken. WTF guys, why are you trying to kill your own Kraken? You paid for it in your taxes!

So what went wrong? Why didn’t people follow the obvious incentive to buy, raising the price for themselves and also feeding the Kraken to sustain the rise? Why didn’t this token EverRise?

Well, here’s what a lot of coders/quants often miss: Investor confidence. One of the overarching incentive structures you have as an investor is a simple answer to this question: Do you think the project will succeed long term, or do you think it will tank?

Your answer to this question determines a lot of your smaller incentive structures.

Succeed à buy for short term gains + feed Kraken for long term growth.

Tank à sell increments to cause a Kraken pump, drain Kraken, lock in short term gains and run away.

Does that make sense? So whether the general body of investors has confidence in the long term prospects determines their short term behaviour, even if it is against their long term interests.

Now, from the short term aggregate investor behaviours that I’ve seen in the market so far, it would seem that there has been an investor confidence problem.

There have been two great fixes to this so far: the first was when the devs moved 1000bnb to the Kraken from the marketing wallet. A lot of us investors were aware of the marketing wallet already, but didn’t know what it was for. This was causing a lot of shaky hands hovering above sell buttons.

At the time, it was clear that eventually the Kraken would be drained at the 0.5bnb rate, and we could pretty much calculate when that would happen. All the while, there was this mystery wallet in the market that had over $1m cash reserves. With the 1000bnb move the devs signalled to the market that they are willing to put this money into the enterprise, which meant that they weren’t going to run away with it and were committed to the long term project.

Investor confidence grew, the Kraken buybacks could be set back to 0.01 to allow the Kraken to recover and rescue the long-term viability of the project. Good move.

Did Titan break his word doing it? I’m a market investor, I don’t know him and I frankly don’t give two dingoes’ kidneys. Did it change the deal investors get for the better? Yes. Absolutely.

The second was when they announced the CertiK audit. These are not cheap (like we’re talking six figures), and they will catch you if you’re a rug-pull.

Did Titan break his word using marketing money for a CertiK audit? I really don’t care. I actually don’t even know what money the developers used. Investor confidence grew, and that’s the difference between making 2x short term vs 1000x long term on this project.

Finally, should Titan dox? Why won’t he dox? He’s the head of a great project, doxing is in his interests.

Here’s the problem with doxing. A certain percentage of investors think Titan is Elon Musk, or Jeff Bezos, or Superman or Santa Claus or Vitalik Buterin or whoever.

Big money knows this. They can just wait for the announcement, make 1000 bots shout “what, that’s it? That guy is nobody, SELL SELL SELL”, and initiate a sell-off. Have you read what people said about the Safemoon guys when they doxed? Look it up.

Anyway, those investors who thought Titan is Elon Musk also sell off. Now it’s in everyone’s interests to pile in and sell off too, because even the normal investors who knew all along that Titan wasn’t the second coming of Jesus Christ can still see that the chart is turning south. Everyone sells off, whales buy back cheap. Whales make money, and that money came from retail. It was all a shakedown.

The Kraken might disincentivise this kind of thing, but it won’t prevent them completely.

You’ve already seen this happen with other coins. You have. More than once. Think of really big drops you’ve seen recently, or ever, and what supposedly caused it. Did the cause seem really stupid to you? Do you think you’re the only one who thought “well this is stupid, but Imma sell because everyone else is selling and I can average down”.

I have news for you, you weren’t. Everyone knew it was stupid, but everyone just followed their short-term incentives.

So doxing is not a simple question.

I would personally be in favour of intermediate solutions, like having known fiduciaries, but that is a discussion I’ll have to save for later.

Questions? As always, post in the comments.