An overlooked investment play for when UNI farming ends…

What happens when rewards end?

As most know, on Nov 17th 12:00a UTC (aka about an hour from now), UNI farming ends and >$1B ETH will be unlocked. It’ll be very interesting to see how this unfolds and where investment opportunities lie.

There is currently one investment that is, in my opinion, currently overlooked. Read on and you can decide for yourself if you agree.

As mentioned, the main point of interest is the ~$1B in ETH that will be “released” once the liquidity mining ends. Catching the move of this new token flow could reap lucrative rewards for the right bets.

Currently, there are several possibilities for redeployment of the ETH. As explained via this excellent tweetstorm (suggest reading thru it if you haven’t):

Generally, it’ll be an unknown proportion distributed over these options:

  1. Staying on Uniswap
  2. Staking elsewhere
  3. Sold for stablecoin or BTC
  4. Buying alt tokens
  5. Leave alone in wallet

With these possibilities, we’ve seen increased speculation and volatility around related token prices, ETH price action etc.

A straightforward bet would have been to invest on where you think the staking will go (2) — which has already been illustrated by the increase in $Sushi price. Some would say there is more room to go, but it’s indeed a gamble at this point given it’s already pumped hard over the last several days.

If you think a good proportion of the funds will sell ETH into stablecoins or BTC (3), you may consider shorting ETH/BTC or ETH/USDT for example.

However, one component has been overlooked.

What do the majority of the aforementioned actions have in common?

They will use gas!

Not only will you have a large chunk of released ETH being moved around to new places, you’ll probably also get increased speculation… driving up gas price more. I’m going to guess it’ll be a clusterfuck of a couple days if it gets chaotic (hopefully). Of course, there is also the possibility that it may all be a non-event.

With that said, what’s the investment to make given this hypothesis? That’s where things do get trickier.

The closest you can invest in gas prices from my understanding is… $CHI

You can read about the actual detailed tokenomics/coin mechanics here

But I’ll skip to the point and highlight this from the article:

Imagine Chi token as tokenized version of actual gas price on Ethereum. Means if the gas price grow. Chi token price also grow. If gas price in Ethereum drops, the same would also happen with Chi.

This does fulfill the basics of what we’re looking to do here, which is speculate on the gas price to a certain degree. The correlation isn’t particularly perfect great from looking at the charts, but I’m expecting a meaningful bump from current low prices. It looks like it’s also utilized to some extent outside of 1inch exchange, which is key.

I’ll leave it at that, I’ve got a small bag hoping to multiply.

Note that there is no cap for supply and the 1inch team discourages treating it as an investment. Please exercise caution (as much as you can) when dealing with an illiquid, infinite supply token with interesting mechanics. This is not investment advice, just providing my personal ideas.

Fin.

Let me know what you think on Twitter: https://twitter.com/altcoinideas

If you liked this analysis/alpha and end up gaining from it, feel free to drop a tip: 16GQQamTyXv2hHwbeZxxzSMJ9kfDqqxoPs

Brainstormin crypto, make profitable trades. https://twitter.com/altcoinideas