Deterministic Positives & Buyback

The Merits of Bad Money — Turkish Lira, Crypto Shorting, and Buyback Narratives

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|                 CARRY TRADE & BUYBACK                      |
+-----------------------------------------------------------+
|                                                           |
|   "Bad money" has its merits                              |
|                                                           |
|   Protect LIQUIDITY, not price                            |
|   Manage VOLATILITY structure, not trend                  |
|                                                           |
+-----------------------------------------------------------+

1/ Truth of Bad Money Drives Out Good

Gresham's Law says: Bad money will drive good money out of circulation.

But think from different angle:

Since free market emphasizes supply and demand, if bad money can drive out good money, isn't bad money more powerful?

This is essentially determined by stance + microstructure:

Scenario	Bad Money Advantage
Workplace	Flatterers drive out doers, management cost lowest
DEX	Speculative new coins eliminate long-cycle projects, trading fee income highest
Currency	Bad money cost and circulation efficiency optimal

In goal-oriented microstructures, "bad money" has advantages "good money" can't match

2/ Where Did Good Money Go?

Good money isn't eliminated, but collected, exits circulation, becomes store of value.

Problem never about quality, but:

Type	Representative	Characteristics
Store of Value Currency	Gold, BTC	Consensus, religion
Transactional Currency	Fiat, altcoins	Circulation priority

By logic "altcoin value is zero", 190+ global fiat currencies also don't need to exist

3/ Turkish Lira: Magical Fiat Currency

Lira 2025 data:

Deposit annual yield about 56.7%
Inflation about 31-34%
Annual depreciation vs USD about 21%
Implied volatility 26%

Lira is globally highest yield carry trade instrument

Carry Trade Playbook:

Borrow: Borrow low-interest safe haven currencies (Yen, Swiss Franc)
    |
    v
Buy: Exchange for Lira, capture 50%+ interest differential
    |
    v
Hedge: Hedge exchange rate risk through swaps

4/ Erdogan's Monetary Policy

Why such monetary policy?

Stage	Strategy	Result
2018-22	Insist on low rates under high CPI high inflation	Sacrifice exchange rate for autonomy
2022-23	Want both low exchange rate and social stability	Got slapped, inflation out of control
2023-25	Excessive rate hikes 50%+	Abandon monetary policy autonomy

How Does Turkey Sustain?

High rates indeed push up inflation
    BUT
Continuous depreciation strengthens export competitiveness
    +
Mandatory export settlement
    +
Taxes, materials, labor settlement form Lira buy pressure flywheel
    +
KKM and other FX protection tools lock exchange demand

A "high trading volume but depreciating" currency far better than "no one dares touch, completely dysfunctional" currency

5/ Lira & Crypto Similarities

Similarity	Lira	Crypto
Inevitable inflation	Monetary policy driven	Token structure driven
Natural price downward pressure	Inflation brings	Unlock brings

Core Insight:

Any crypto project without full circulation cannot maintain price long-term

Any long-term unidirectional, fixed-ratio, front-runnable buyback cannot succeed

6/ Income Buyback Narrative Illusion

Hype, Pump etc. 100% income buyback story sounds beautiful, makes holders have "price has real income support" illusion.

Reality is:

Arbitrage capital can hedge in advance
    |
    v
Buyback instead consumes capital
    |
    v
Offsets price impact

Like if Turkish central bank publicly commits to stabilize exchange rate
    |
    v
Global arbitrage capital will swarm
    |
    v
Replay 97 Asian financial crisis

7/ Design Token Economics Like Erdogan

Core only two points:

Principle	Meaning
Protect liquidity, not price	Make asset always "needed"
Manage volatility structure, not trend	Give capital deterministic alpha

Token System Design:

1. Must have continuous revenue (financial protocols/top L1s)

2. Token has unavoidable "tax" function (Gas, fees)

3. Provide token-denominated interest rate differential above opportunity cost + lock conditions

4. Protocol revenue forms "central bank style treasury"
   └── Promise only used to intervene price
   └── But non-mechanical, predictable unidirectional buyback

5. Manage volatility structure based on IV/RV/depth/funding rates

8/ Dividend Mutual-Aid Model Flywheel

Dividend APY + Lock-up
    |
    v
Increase sunk cost
    |
    v
Interest rate differential + Predictable volatility
    |
    v
Trigger arbitrage behavior
    |
    v
Increase liquidatable assets and fee extraction
    |
    v
Feed treasury increase APY
    |
    v
(Loop)

Achilles Heel:

Whether system continues
Whether project continuously obtains revenue
Whether lending rates controllable

9/ Can Profit Shorting in Crypto

US stocks shorting hard because:

Mathematically returns capped
Long-term structural bull market

But crypto isn't:

Most projects can't reverse trend, no "macro-level reflexivity tools"

Dumping doesn't cost money, pumping does

Real Risk of Shorting:

Doesn't come from project itself, but counterparties

Exchange suddenly changes rules
Funding rate extreme changes
Long liquidity suddenly withdraws

XPL and MMT are very good examples

Core Formula

Token Design Principles:
├── Protect liquidity, not price
├── Manage volatility, not trend
└── Give capital deterministic alpha

Lira Survival Reasons:
├── High rates attract Carry Trade
├── Central bank manages volatility
└── Exchange rate characteristics bring real demand

Buyback Narrative Trap:
├── Unidirectional predictable buyback = Arbitrage opportunity
├── Buyback consumes capital but can't support price
└── Should use for volatility management not trend

Exchanges like you, liquid funds like you. Holders don't like you, but this is crypto market

I'm just not that orthodox good

Deterministic Positives & Buyback

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