Freeway Friday Update — 23 September 2022

Sadie Hutton

Published in

Freeway

11 min readSep 23, 2022

Click to hear from Sadie and get all the latest from Freeway world.

In this week’s edition of the Freeway Weekly Update, we reveal a new Freeway product offering up to 15% Annual Rewards with greater protection of assets, plus early access to apply.

Hey #FreewayFam,

Want rewards with more protection? You’ve got it

Everyone wants to earn rewards on their crypto.

But what use are the established crypto Earn platforms if they can’t provide a sustainable yield through both bull and bear markets?

And why should HODLers with diamond hands be forced to risk everything on platforms engaging in high-risk DeFi plays with zero transparency?

What if there was an easier way to earn on your crypto that could give you generous rewards with more protection?

Well, thanks to Freeway, now there is.

It’s called Freeway Earn & Protect (a working title for now) and we’re confident it will transform the crypto Earn space by offering market-leading rewards with unparalleled asset protections.

We’re planning a full product launch within the coming months, but we’ve already begun onboarding with our Biz Dev team prioritising some of Freeway’s loyal followers first in our beta launch this week.

And the early signs are that demand is going to be very high indeed…

Coming Soon: Freeway Earn & Protect

Freeway Earn & Protect is a brand new concept in the crypto lending space that offers the ultimate balance of rewards and protection.

Here’s how it works…

Eligible users can lend their crypto to Freeway to earn up to 9%* on BTC and ETH and up to 15%* on stables like USDT, USDC & BUSD, while Freeway is legally required to repay those assets and rewards at any time, with no lock ups and no fees.

Freeway maintains 100% control and ownership of all of these assets, holding them securely in segregated accounts (which means they cannot be used by the brokerage), with full EU-regulated broker protections and institutional-grade security.

When USD-pegged stablecoins are loaned to Freeway, Freeway converts them to the fiat equivalent for added protection against the risk of the stablecoin de-pegging.

But our protections don’t stop there, because our trading strategies mitigate risk to protect reward generation too.

Freeway’s trading team trades on FOREX markets, where trillions of dollars of liquidity is traded every day, deploying high-frequency trading algorithms within a codified risk mitigation and protection framework. This includes protecting 98%** of the assets using an automatic 2% stop-loss safeguard, applied by AuBit Prime.

In other words, Freeway Earn & Protect gives you access to Annual Rewards of up to 15%, while protecting 98% of the assets used to repay you. And Freeway is legally required to repay 100% of your loan, plus all the rewards you have earned.

If you’re interested in finding out more, please complete this form to apply for early access.

*Rewards may change or cease at any time. Rewards are added to your Earn & Protect account in the same denomination as the crypto loaned. Earn & Protect terms and conditions apply.

**When you lend crypto to Freeway, we become the owners of your assets. Any reference to ‘protection(s)’ refers only to protections of Freeway’s own assets. Protections are not absolute and could result in a loss of Freeway’s assets. Review the Freeway Earn & Protect Terms and Conditions for complete details.

Freeway’s Latest Growth Stats

We may add the new product stats in the future, but until then the following stats only apply to our Supercharger simulation and Freeway Token. Here are the latest corporate growth figures in full…

Total Freeway users worldwide = 25,984
Total of Supercharger simulations = $150,285,869
Supercharger buy orders = $3,319,953
Supercharger sell orders = $2,106,221
Freeway Tokens staked/held on Freeway = 6,300,589,011
% of FWT circulating supply on Freeway = 89.47%

Guerrilla of the Week: Elias

Telegram: @elias135

Elias has been a part of Freeway’s story since 2020!

A close and keen onlooker, he has watched our growth and development quietly from within the FreewayFam as he moved from an onlooker, to a user, to a stealth super supporter!

As you’ve been getting more involved, you have become a highly valued community member, so we wanted to show our appreciation by giving you this week’s Guerrilla Of The Week award.

Congratulations Elias!

Agent Alpha on: When Does It Stop?

Agent Alpha’s statements are solely his own opinions and market commentary, are for entertainment, and are neither endorsed by, nor represent the views of Freeway. You should always do your own research and seek independent expert financial advice.

Ultimately that’s the question we all want to know as investors and humans on this planet. While no one has a crystal ball, I will try and outline some KEY metrics to look out for, which could help provide a framework to answer this very question.

My first chart below provides some context on volatility here. Namely the volatility chasm currently between the fixed income volatility index (MOVE) and the other volatility index metrics in equity land, including the VIX (S&P) and VVIX (Tech).

What’s surprising at first glance, is how the volatility that has been roiling fixed income markets all year — essentially in three waves, with the latest wave being the one we’re currently in the midst of, which kicked off post the Central Bankers Jackson Hole symposium in late August and Powell’s uber hawkish messaging from that — has actually been missing in equity markets. They’re not from a vol perspective….well….volatile… just inexorably pressured. Why? because of course the volatility in fixed income — which drives all other asset classes — has remained elevated in waves and unprecedented in terms of time duration.

So simple stuff BUT until this MOVE INDEX pulls back (and this is the VERY important bit here), it is NOT about levels in markets as far as the FED is concerned, BUT it’s about LIQUIDITY or lack of as the swings out there in risk markets continue. Because volatility in fixed income is actually being driven increasingly now by LACK OF LIQUIDITY.

Now before I elaborate on liquidity (or the lack of it in fixed income markets), I do think it’s worthwhile highlighting what seems to me quite an obvious technical pattern in this MOVE INDEX.

What I can tell you is that the professional market consensus on this index is that a level < 100 needs to print before we start to see a steadying of the general volatility ship out there. Indeed, if you look at the chart above, you can clearly see this is a major level. Well I am looking at this thinking the level we actually need to see is arguably far higher than that, around the 120 area, as this represents a neckline to a quite obvious longer-term Head and Shoulders pattern.

What I am saying here is that this benchmark that’s smashing the value of assets everywhere (which is basically a derivative of all these central bankers and their hiking en-mass ideologies), could well have a higher bar indicating some form of general stability than the consensus thinks right now.

Prints at <120 handle, which from here isn’t that much of a stretch at least in the short-term anyway, could well be a floor for risk assets per se. And if this cannot come lower, then in all probability the volatility and inexorable general risk pressure will grind on.

So, let us talk liquidity, or the lack of it….

If you recall earlier in the week, I discussed the potential for a Plaza Accord Mark 2 (please see midweek piece for details). Now to be clear on this, is it likely we see a fully coordinated action by the world’s major central banks to alleviate the inexorable rise in the USD? MOVE volatility driving this as an aside too. No, it is not likely in the strict sense, BUT it is likely AND IT IS HAPPENING, that independent moves by the world’s central banks, to address their own currency implosions are in motion.

There is a point to this re: fixed income liquidity….

The Japanese intervened yesterday to address the collapsing YEN; now the Japanese in order to strengthen their YEN, SELL US Treasuries and the Japanese are the largest holders of said US Treasury Bills for context as to the potential firepower to do so. BUT OF COURSE, perversely, by selling Treasuries in order to strengthen the YEN, this forces supply into the system, and lifts the yield on Treasuries (falling bond price = higher yield) and that INCREASES the attraction of the USD.

So, intervention to strengthen the YEN perversely ends up pressurising YEN and all other currencies further vs the USD, so round and round we will go.

As an aside, the Indians stepped into their currency market overnight to try and alleviate the Rupee weakness that is at an all-time low vs the greenback too.

Back to lack of liquidity

The Japanese intervening are doing so at the very same time that the FED is now embarking on its own QT (Quantitative Tightening) by selling c. $95Bn of assets the FED holds pcm on its balance sheet for months and months ahead. BUT WHO IS THE BUYER?? The liquidity on the bid side is rapidly drying up. AND REMEMBER again…..the FED doesn’t CARE about levels per se, BUT it does care about the orderly functioning of the markets, and the most liquid and most important on earth being it’s very own TREASURY market.

Drying up? Look at the drying up Japanese bond market below — JGBs. This is the 2nd deepest liquidity market in the world.

Move across then to the Treasury market, and you can clearly see how the relevant liquidity index is starting to worsen at an accelerating pace, as the JAPANESE are trying to SELL and so too is the FED (and who else as they start to intervene to stop their own currency rot?).

My conclusion

This is structural and it is short term.

In the short term, I think the volatility in the fixed income markets that is roiling all else as it continues to remain so elevated, could actually calm at a higher equilibrium level than consensus thinks. And I think technically speaking a breach < 120 in MOVE is something to watch for, as this will help provide some sort of framework as to when this general inexorable asset price destruction dynamic ends. A < 120 move could well signal a more concerted calming in the fixed income market volatility, which is what has to happen in order to stop the general rot aka ‘when will it end’ question.

Levels do not matter; volatility, disorderly markets & illiquidity does.

So, I think right now we are seeing a Plaza Accord Mark 2 happening. This is not coordinated (so I reference Plaza very loosely obviously to make a point), as central banks are trying to independently draw lines in the sand over their own currency collapses. We’re not talking small nations here after all, we’re talking in the last 48 hrs the Japanese (1st time since the late 90s they have done so) and now the Indians. Expect more of this.

Structurally speaking, what alarms me is the increasing evidence of liquidity issues in the fixed income space, at the very time when the world’s largest holder of Treasury bills is seeing the need to sell to stabilise their currency — the YEN. And of course, they are doing so just as the FED really starts to get their teeth into QT at $95Bn pcm across asset instruments they hold on the balance sheet.

In my view, this points to the perennial argument as to the end result of where the FED can truly get to on these planned asset sales, and the rate hike terminal rate they are signaling in this hiking cycle, that is trending at an insane pace. Because again, whilst levels are irrelevant to the FED, liquidity or lack of it surely will not be ‘irrelevant’.

It is highly confusing and I do not pretend otherwise. What the above is attempting to do is provide context and framing for you to consider.

I close with this from Goldman Sachs today

Goldman strategists have this morning slashed their S&P year-end target to 3600 vs the 4300 they had prior (3737 currently trading). Is this a ‘sounding of the bell’ moment? Their calls tend to be off more often than not, which is why I flag it (albeit on current trajectories of course they may be being generous on said call, but only time will tell).

So let me sign off with my latest chart on the global proxy index for the S&P

Until next week!

Alpha

Tuesday’s AMA on Telegram

Once a week on a Tuesday at 6pm UTC, Freeway holds a live AMA in the Freeway Telegram channel that gives the community a chance to ask direct questions to Freeway’s co-CEO Graham Doggart.

If you didn’t make it this week, you can read our full transcript.

Click below to join the official Freeway Telegram group.

If you’d like to participate in the next AMA on Tuesday at 6pm UTC, where you can ask Graham anything, join the Freeway Official Telegram group here.

As always, we love hearing from you, so please join us on Telegram, follow us on socials, and if you want to hear from us and you want to hear it first, sign up for the newsletter.

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Until next week,

Sadie Hutton

Co-Founder and CEO

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