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androidsixteen
@androidsixteen.eth
Why USDC is fundamentally different from USD Though it's a facsimile, the velocity of USDC is higher because the target demo has a greater risk appetite and willingness to spend it onchain Once the dollar gets on-ramped to brypto rails, it moves a lot more freely 💸
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grin
@grin
And continue to decrease in value. The greater the velocity of money, the less valuable it is (this is also a +1 to your slow growth thesis)
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androidsixteen
@androidsixteen.eth
Yep, Gresham’s Law!
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Dan | Icebreaker
@web3pm
Is this true individually? I don’t see any reason inherently that a higher velocity of money on average (say, by improving the payment rails via crypto) must manifest on an individual scale And separately, is value inherently negatively correlated with velocity? At an extreme, 0 velocity is worthless. Infinite velocity still can have value. I think maybe there’s a 3rd factor that’s part of a more complex relationship
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androidsixteen
@androidsixteen.eth
I think you’re right — you can’t really reduce it down to one variable That said, people tend to keep what they value and trade away what they don’t
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Dan | Icebreaker
@web3pm
I think that phenomenon (keeping what you value and trading what you don’t) exists independent of the velocity of the asset Eg if I get a bunch of somewhat illiquid tokens I don’t believe in but the market values them at $100, I will sell them even with 10% slippage Vs I’m fine holding onto USDC even if I can sell that for ETH with 0 slippage It ultimately comes down to the difference in perceived value vs market value and I think high velocity assets *often* have high correlation with large differences in perceived vs market value in crypto However I would consider monetary units like USDC as distinct since their perceived and market value are generally equal. The velocity we see is just the result of them being used as money.
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