In October, 2008, what we like to call the “exponential age” first began. With bitcoin, you had an asset which basically assured you exponential returns when held for a long period; the certainty in the exponential returns has been increasing over the past 13 years, to the point they’re almost a sure thing, just like T-Bills (T-bills are also not 100% safe, government collapse is increasingly a possibility). So it’s increasingly becoming rational to measure potential growth by investing in a volatile asset, against the opportunity cost of the “default” exponential growth available with bitcoin.
Few assets have actually managed to live up to this new benchmark, “better than exponential returns”, since the advent of Bitcoin. Two notable examples are Ethereum and Hex, as well as many DeFi startups like Uniswap and Aave, have offered better-than-bitcoin returns over the past few years. Thus large investments in innovation are increasingly about finding better-than-exponential trends, which are actually there to be found. Yesteryear’s assets like Apple or Amazon stock, whose 30% YoY growth was once considered spectacular, are not even in the ballpark of the exponential growth rate of these cryptoassets (closer to 1000% YoY). It may not be apparent, but these exponential trends will cause ridiculous redistribution of wealth in the coming decade.
Let’s analyse these trends in greater detail. In 2021, If 1% of the $30 Trillion T-bill market instead invests in crypto in 2021, here are three possible scenarios, assuming the YoY growth rate of these assets remains the same.
- Bitcoin has increased 1000x in value since its 2013 high of $30 — therefore, in 8 years [by 2029], a $300 Billion investment in Bitcoin could be worth $300 Trillion — roughly the value of all assets on planet earth combined (including land and real estate).
- Ethereum has increased 1000x in value since its 2015 price around $3 — therefore, in 5 years [by 2026], a $300 Billion investment in Bitcoin could be worth $300 Trillion — roughly the value of all assets on planet earth combined (including land and real estate).
- Hex has increased 1000x in value in 2 years (since 2019) — therefore, in two more years [by 2023], a $30 Billion investment in Hex could be worth $30 Trillion — roughly 1/10th the value of all assets on planet earth combined (including land and real estate).
We left off at noticing that Bitcoin is likely to exceed GDP of nation states by 2026. There is no reason to stop there. We can consider more volatile, less certain cryptoassets that may hit this benchmark even sooner. For example, Ethereum and Hex are two currencies with greater than ~100B market cap that have shown exponential returns even greater than bitcoin.
Ethereum trend
But why stop there? After understanding these trends, we aimed to create a currency with meta-exponential growth, that can capture all the value on planet earth even faster. We did so by combining exponentially increasing asset value with exponential interest rates — which further increase demand and make asset value increase meta-exponentially (i.e. to the exponent of the exponent). If our experiment succeed, we hope to achieve 1000x YoY returns, again doubling the exponential asset price increase from the current best performing asset, hex. The math behind rapid and infinite price appreciation, as it relates to Monetary Velocity and Hodler ratios, is explained in more detail in our whitepaper.
On Time Deposits
Why do time-deposits exist? In today’s world, they’re one of the lowest risk ways to earn a default amount of compound interest on holdings which (theoretically) is supposed to make up for inflation. In practice, with inflation running into double digits, T-bills are failing miserably at the second task.
Therefore, we propose to retire the compound interest standard bestowed on us from the industrial age, for a new default HODLing reward for the information age — exponential interest. This will be discussed further in PART-III.
