How to understand the current stability of Friend.tech TVL, but with a decline in Key prices?

Original author: 0xLoki, New Fire Technology

1. First, it is necessary to understand that under the assumption of pure speculation, the act of buying a Key results in an immediate loss of 22% based on book value (10% is just a smokescreen), and an immediate loss of 70%+ based on EV (22% is only the second smokescreen);

2. After understanding the first step, it can be calculated that the Key price does not need to rise to a very high level in order to infinitely extend the EV breakeven period. At this time, the entire FT market will become a repeated game of "guessing the mean 2/3". The speculative threshold for the Key price corresponding to the market equilibrium point will continue to decrease. That is, at this stage, funds are flowing towards lower-priced Keys, and the market with lower market value has been monopolized by bots.

3. The breakthrough lies in providing utility to reduce the potential liquidation ranking of some keys, thereby increasing the EV of other keys until the Ponzi regret is eliminated. Unfortunately, bots and 5% FT transaction fees are killing this market and eliminating the possibility of a breakthrough.

4. How to understand the difference between EV and book value:

Zhang San, Li Si, and Wang Wu pooled their money to buy a cow, a duck, and an egg.

The person who agreed to leave first takes the cow, the second person takes the duck, and the last person takes the egg.

Zhang San/Li Si/Wang Wu all feel that they have the right to claim ownership of a cow.

But in fact, their claims are equal.

There are a total of 6 results, with each of them taking three:

1) Cow duck egg 2) Cow egg duck 3) Egg duck cow 4) Egg cow duck 5) Duck cow egg 6) Duck egg cow

The six probabilities are equal.

Therefore, what Zhang San truly possesses is 2/6 of a cow + 2/6 of an egg + 2/6 of a duck.

That is one-third of a cow, one-third of a duck, and one-third of an egg.

At this time, Zhao Liu joined the game and he needs to provide a set of houses.

When he joined, the house was already divided into four parts, with Zhang San, Li Si, and Wang Wu each receiving 1/4.

This is why from the perspective of EV, buying results in a loss of over 70%.

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