This writing was copied from my blog https://nope-its-lily.medium.com/. I write about the NOPE and other options and market things there and on my twitter https://twitter.com/nope_its_lily. Cheers!
Check out Part 1 first about my thoughts on the short squeeze thesis. To clarify — I do think shorts are being squeezed in Gamestop, although this is auxiliary to the main driver of the stock’s momentum (and not, in my opinion, the primary driver of Friday’s exponential rise).
So okay, let’s go to the obvious question — if hedge fund tears didn’t cause Gamestop to rocket, what did cause it?
Wew laddy, +71.25% at the peak.
Gamestop in many ways is an extraordinary story, and has all the properties of a successful meme stock (salience):

1. Personal name recognition/Nostalgia-For better or worse, we all know/remember Gamestop (primarily from childhood), which is similarly why Hertez performed so well in the afterlife while Mallinckrodt hasn’t.
2. A hero and a villain — Much like Tesla, Ryan Cohen represents the hero in the Gamestop narrative, where investors can paint whatever picture of the future they want and justify whatever price tag they pay. Similarly, Melvin and Citron (I mean, even the name Melvin) and the hedge fund industry are (perhaps well-deserved) villains in the arc, helping obfuscate feelings of greed or risk by presenting it as a righteous cause.
3. A cataly-ish — For obvious reasons Gamestop is benefiting from the console cycle, but perhaps to a lesser degree than before (its massive real world presence during a pandemic doesn’t help much).
4. Humor-What could be more funny than investing in a relic of the early 2000s? Except maybe investing billions into 3d renderings of hydrogen powered cars.

So it isn’t a surprise Gamestop captivated the attention of the internet; despite common belief, the legend of Gamestop extended far outside wallstreetbets (although the saga of DeepFuckingValue/RoaringKitty there helped bring substantial energy to the cause).
And how does the internet show some love?
Well, it buys calls.
For better or worse, most new investors have absolutely no concept outside of simple long call/put positions (probably for the best, from experience). In general, most new market positions view long options (and, let’s face it, mostly calls) as a highly leveraged bet on the underlying akin to a lotto ticket, which works beautifully for the following reasons:

1. Long options have asymmetric risk-reward, assuming risk-loving participants.

While in prior posts I’ve touched on the expected profit of options being zero, this is only true (it’s never actually true, due to seller’s, variance risk premium, and a host of other factors) under risk-neutral measure. In the real world, investors (especially on indices) tend to be risk-averse (weighting losses more heavily than chance of gain)… at least historically. The new class of retail investors, on the other hand, partly engendered by Robinhood’s extremely gamified UI tends to be risk-loving (“yolos”), favoring chance of gain over (higher) chance of loss.
For that type of an investor, options are akin to a casino due to convexity, or in layman’s terms, “the potential to go up a lot really fast” in value. This is of course true for stocks too (albeit less so, due to the implied leverage of options), but when an individual purchases a stock they have a rather large downside (the entire stock can become worthless). This isn’t the case for a call option, which only represents a portion of the total cost of the stock, but represents the entire upside.
2. Options have to be hedged… often in the underlying.
Before I get 1000 responses telling me this isn’t always true (especially on indices, where you have futures and all sorts of nice things) — it’s more or less true on a meme stock, which basically has no beta or correlation to any other stock (except perhaps other meme stocks). In general, one can anticipate that an option written by a market maker and sold to a retail investor (who owns a long position from that transaction) is hedged in the underlying stock, which obeys the same rules of buying and selling pressure. This is even more apparent in stocks with low float, which tend to move in price substantially with relatively low volume traded. You can imagine how few option contracts it similarly takes (given the implied leverage up to 100 shares worth of delta) to actually move the price (I’ve seen call options move the spot in real time, for instance, on Del Taco stock before earnings).
3. Option buying begets option buying.
What happens when a few individuals buy options on a stock? It moves up slightly (usually in proportion to how many options were bought, what time period they were bought in, and how large the underlying’s float is). This triggers the happy centers in peoples’ brains (yay, we’re making money) and triggers more buying of calls.
More interestingly, option convexity is largely due to the Greek gamma, which simply refers to the rate delta changes in response to changes in the underlying’s spot price. Delta more formally measures how much we expect the option price to change as the spot price changes, but more usefully for this example can represent how many shares equivalent the option contract controls at the given price. This is why delta represents the hedge ratio — if you, for instance, write a 100 delta (ITM) call option and sell it, you need to equivalently own 100 shares of that stock to neutralize your risk.
Delta is interesting (my favorite Greek) because it is heavily non-linear, and changes in response to:

1. Spot price (gamma)
2. Time to expiration of the option (charm)
3. Volatility of the underlying (vanna)

These are all second order derivatives, so you probably are lost by now if you didn’t take calculus at some point.
So why is gamma important here?
Source: quantik.org
Unlike controlling the equivalent delta’s worth of shares, the value of an option contract increases at a faster rate as it gets closer to in-the-money. This is (one of the reasons) why options have convexity — the value of an OTM call option contract goes up faster as it gets closer to ITM, with a potential for (5,10,100,200+)**-**baggers (multiples of how much you paid for the initial) if you play it right.
What’s even more interesting though than gamma alone, however, is pairing it with theta, the decay of an option’s value as the time-to-expiration draws closer. This tends to have a strong relationship to the implied volatility — theta represents the time value of the option (extrinsic), and implied volatility is largely the market consensus of the potential for the underlying to move in the time remaining on the option. However, as the days tick down, the time for that move to actually happen diminishes, and therefore the value of the option similarly goes down with it.
As IV increases, theta usually does (especially on short term options), and vice versa. (Helpful video by the tastytrade crew — https://www.tastytrade.com/shows/market-measures/episodes/theta-and-iv-05-17-2019)
So, given my tendency to ramble, the question is — why is this important? Let’s look at gamma and theta in the context of 0-day-to-expiration (0dte) options, and try to piece together what happened to Gamestop on January 22, 2021.

0 Days to Live

0dte options have long been a mainstay of the dopamine addicted day-trader community (including me, sometimes) given they represent the purest form of lottery ticket:

1. They expire at the end of the day — You don’t need to go to bed and worry about your position, because it’s either closed or worthless.
2. They’re cheap, generally-Theta in particular becomes exponential for 0dte options, and you can quickly buy positions on sale just to gamble as the end of the day grows closer.
3. They still represent implied leverage and have that tasty convexity-Like their more respectable brethren, 0dte options still represent the underlying and have all the neat Greeks (gamma, delta, vanna, pajamas, etc.) which make their payouts non-linear and fun.

In general, the optimal strategy to capitalize on 0dte long options is to buy as late as possible in the day, to allow theta to provide as much leverage to you as cheaply as possible.

Let’s Imagine a Scenario Here

Let’s imagine you have a high implied volatility stock that has been stable/slightly declining in price for multiple days. During that time period, theta is aggressively destroying the value of long options, while IV is similarly dropping (both due to theta and due to relative lack of movement). As we get to the final day (this is a weekly, for example), much of the option’s value has now disappeared.
This impacts both put and calls open, though. And let’s say a mean orange decided to start a war on your stock in the days before, causing a flood of short-term puts to hit the market during that week, which had minimal effect (largely due to continual call buying of longer-dated options coupled with actual shares buying pressure due to belief of a short squeeze/Ryan Cohen being the second coming of Christ).
What happens when those puts start to expire? As the days and then hours tick down, the hedges of those put positions (shorted shares) start to unwind, and buying pressure picks up.
Similarly, this buying pressure is noticed by market participants, who start to capitalize on the momentum by buying 0dte call options. These at first have minimal impact, largely because the inflow and outflow of call delta are roughly equivalent (somewhat of a bias towards inflow, pushing price up alongside share buying).
But towards the middle of the day, two interesting things happen:

1. Theta and charm become more and more prominent in both making new option positions cheaper and unwinding existing put and call positions.
2. Gamma starts to become more dominant due to the high implied leverage versus cost of 0dtes, leading to the virtuous cycle (option buying begets option buying).

These two effects tend to be complementary — as the hedges unwind (given the weekly puts from Citron/the short seller attack) for existing option positions, new 0dte positions can be bought and bought, each time pushing up the underlying as well as increasing the value and delta of other 0dte positions.
This can be neatly observed in the option volume versus open interest for the 1/22 series on GME:
This is fine.
Although more puts traded, the delta (for obvious reasons) of calls is much higher.
As the price of the stock goes higher and higher, this continues to attract more and more speculation, hoping to capitalize on the continued momentum. This continues in a loop:

1. The price of the underlying continues to increase as put hedges unwind, volatility spikes, and call options are bought (the initial delta hedge).
2. The increase in price leads to gamma of existing contracts increasing the delta of those contracts.
3. This leads to more shares being bought to hedge those increasingly higher delta positions.
4. This leads to more speculation and momentum.

An interesting property of $GME from Friday you can neatly observe is the highest strike in the series is $60, meaning that at Friday’s close, every single call option expiring 1/22 expired ITM. More interestingly is the relationship with gamma, again observable below:
Source: quantik.org
As a contract moves further and further ITM (at one point, GME hit $76 intraday), the gamma of the contract decreases as delta hits 100 on the position. This implies a cap on the momentum from the virtuous cycle described above — while continued call buying can of course drive up the price further, not only does the cost become prohibitive (given that a deep-ITM position is basically equivalent to buying 100 shares in payout), it becomes linear (and therefore boring). Once 100 delta is reached, there is no more cycle of increasing spot price causing increasing share buying, only normal share buying.
And that’s when it drops.
It’s hard to say whether the halt caused the drop (given the mental association halts have to pump and dumps for most investors). In this case the drop assuredly coincided with the halt, but more importantly, we can observe where the drop ended:
​
57.99 is such a pretty number.
In this case, we can observe the drop in price stabilized at $58, before rapidly jumping above $60. This is largely due to gamma and continued 0dte call buying buttressing the fall — as the positions fell farther OTM, shares used to hedge those positions are sold off, further driving the price down (in this scenario, the dealers are almost assuredly short gamma). However, similarly those positions-now closeOTM and close to expiry-become cheaper at a fairly exponential rate (due to theta and charm).
Speculators again gain conviction, pushing the price up above the highest strike (to the point where gamma provides no real extra push versus the clock ticking down).
This is what we call a gamma squeeze, and isn’t a terribly uncommon phenomenon. It largely follows similar patterns:

1. In general, gamma squeezes tend to happen closer to OPEX, due to both hedge unwinding (in the case of a previous put skew, for instance) and due to the 0dte effects mentioned.
2. In general, there is both a rapid rise (due to gamma looping and speculators joining) with a similarly steep cliff (especially if the available strikes is exhausted, like what happened to $GME).

Can it be continued forever, though?

In general, the answer unfortunately is yes.
Gamma squeezes in generally power meme stocks, and require a few elements to be true:

1. Continued supply of strikes and promise of convexity — Put gamma squeezes rarely happen because well, the maximum value of a put option occurs when the underlying hits 0. Calls, however, have an infinite potential payoff and strikes similarly can be added indefinitely. This allows continued creation of OTM options, which due to cheap premium and asymmetric risk-reward on longs power the gamma squeeze.
2. Continued momentum-In general, meme stocks follow the greater fool theory, despite promise of rocket emojis. When they drop, they drop hard.

​
Oopsies.
This is because, as previously mentioned, meme stocks are powered by long calls sold by market makers, who are chronically short gamma. Any selling begets more selling. Even periods of quiescence are dangerous, because without continued inflow of call delta, hedges unwind, and the selling pressure begins.

1. Continued attention-This is where salience shines. The major reason Tesla (the OG gamma squeeze) continued to rocket throughout 2020 was largely due to Elon Musk’s charisma and Tesla’s promise of a better world. It becomes a lot easier to stomach risk for an investor when following a strong personality with a killer story. This role was largely played in Gamestop’s saga by Ryan Cohen, and fed into (potentially unwittingly) by the battle with Citron and the mystique of DeepFuckingValue. It remains, however, to be seen if this will continue.

The moral of the story here is retail, for better or for worse, finally learned how to weaponize options. We’ll see what happens next.

Warning: long rambling stories ahead. I am bored and waiting to get through my first day back at work since before Christmas. You've been warned!
I've been going to the casino pretty regularly for the past few years. Before that, I played occasionally. I exclusively play slots. I view it as a night out - first with friends back when I brought $50 and played penny denom minimum bet spins and prayed to win $20, and then eventually shifting my mindset to playing higher bets and denominations. I hit my first jackpot handpay a couple of years ago. I hit $3700 on a $27 bet on a Geisha machine. I've hit a few other jackpots here and there, culminating with my biggest jackpot ever this past summer. I hit $12K on a $50 bet on a Pompeii slot machine.
Well, the long story short is that I have fallen out of love with gambling. I have somehow managed to have a positive ROI on gambling. I track my withdrawls and win on a spreadsheet. To put it bluntly: I have been extremely lucky over the past few years. I know that slots are not a viable way to win money in the long run, so I made a decision a few months ago to "retire" from gambling at the end of 2020.
I went to my local casino last Wednesday. It just so happens when I hit a jackpot that I usually do it within the first half hour or so I'm at the casino. Well, it happened again. After going up $600 or so on another slot machine (I don't remember the name), I went to one of my most hated/favorite old school slots - Zeus dollar denomination. One of my worst moments in all of gambling was a few years ago. I got a bonus round on the Zeus dollar denomination on max bet of $45 a spin. I was BEYOND excited. I've seen Youtube videos where people have won tens of thousands of dollars in that exact scenario. Much to my shock, I won nothing. In that game, you don't win anything for triggering the bonus. So I actually *lost* $45 on getting the bonus. I cashed out and left immediately.
Anyway, last week I hit a modest $4500. It was exciting...but not as exciting as I thought it should be. I was cool, calm, and...detached. The wins didn't mean much to me, and the losses mean absolutely nothing. My wife and I are in the EXTREMELY fortunate position that losing $500 or so every week or two at the casino is affordable. I'm not ignorant to how lucky we are to be in this position.
After getting paid out, I played a bit longer. But that hand pay drove home the realization that I had a few months ago: it was time to stop gambling. If I can't get pumped about a big win like that, and if I'm not even phased a little bit by losing, it's just not worth gambling any more. I used to go for entertainment, but even now gambling doesn't provide that much.
As I sit now, I am up roughly $18K over three years of slots. Not bad, but not life changing. Enough that I bought my wife a Burberry and Louis Vuitton handbag on separate occasions. The rest if stashed in savings or in an investment account somewhere. But I am 100% committed to being done. At least for 2021, and probably longer.
If anyone is interested in hearing my thoughts on how to win...I don't have any insight to share. It's luck. I got lucky. I know I got lucky. The usual tropes about setting win and loss thresholds is good advice. Sometimes I chased payouts and hit them. Sometimes I chased and lost. But I managed to hit more than miss, and for that I'm lucky. And thankful.
Anyway. I don't have a major takeaway or anything. I don't have many people I can talk about this with in my personal life, so I figured I'd share a bit of my story here.
If you do gamble, please do so responsibly. Good luck, and try to have fun. If you're not having fun, it's probably not the right way to spend your time or money.
EDIT:
I just wanted to say to anyone who reads this in the future that I appreciate the nice responses and PMs from people. It's nice to share a positive experience with others! I sincerely hope that if any of you choose to play in the future, you choose to do so responsibly. Gambling can be a hugely problematic lifestyle for some people. Stay safe. (end of preaching here).
I also want to take a second to address some comments from some people about slots being skill based. This is 100% false. The concept of slots being skill based in any way is demonstrably untrue with three seconds of reasonable thinking. If we accept that there is a hypothetical slot game which is based on skill and not pure luck, what are the consequences of that? First of all, this information would leak out. There would be no way to contain it. If one person can solve the system, another an as well. Subsequently, someone would write a book on the subject. Think about all the poker and blackjack strategy books out there. These are games where skillful play can increase your odds of winning. Last I checked, there aren't any books or Supersytem-level analyses from prominent individuals willing to stake their names and reputations on publishing a "slot technique" book. There's a reason for this. And also - think about this: casinos still carry blackjack tables for a reason: they still have an edge to win. If there is a surefire way for individuals to win when playing slots, casinos would 100% for sure take these games out of circulation. Casinos are not in the business of giving away money. Any claim there is a foolproof way to win money playing slots does not make sense when critical thinking is applied to the circumstances.
Slots are not like card games. Finding and playing only games where there is a "must win by" progressive is not the same thing as skillful play. That's more akin to something like card counting in blackjack. Many people who design slot machines and engineer the software behind the scenes have posted on Reddit and elsewhere that wins are based on random number generators running behind every spin. There is literally no skill involved - you win or lose each spin based on pure random luck.
I am saying this because there are a number of people who come to this subreddit to look for ways to cheat the system and get easy money. I see posts like this fairly often, and I'm only browsing this subreddit occasionally. Gambling is not, and should not, be a way for anyone looking to make a quick buck. If you're looking to get an edge playing slots because you need to pay bills or make a quick buck, you are already in serious trouble. Do not buy into the delusion that you can get an edge or guarantee a win. People saying this are snake oil salesmen who do not care for you or your well-being.
Anyway. I'm going to stop monitoring this post. I'm still open to receiving PMs or messages, but I've had my fun with this so far. I could do with fewer trolls, but this is the internet. I knew what to expect. Bon chance, everyone!

I have been very into the PvP-style of this game starting from 2011, although I haven't been playing the game since 2014 until last month, but the execution has always been way off. There has been some progress and some tweaks here and there, but PvP will never be even remotely balanced or populated unless the following key points are addressed:
​

1. Crowns-only equipment from packs

- It is unbelievable that this game has been able to continue with its marketing, especially to kids, with such blatant gambling elements for so long, while some other larger game companies (like EA) have finally been called out for their practices. Wizard101's casino lootboxes are literally the worst thing about the game, and it seems like they are just going more and more into that direction. And unlike many other game companies nowadays thanks to the new laws, Wizard101 doesn't even disclose the odds of receiving a certain item (I bet they are so small that people would be too de-incentivized from buying).
Anyway, if this all was just cosmetics and stuff it wouldn't be such an enormous issue, while still being blatant gambling. The problem really shows in PvP, as basically everyone who wants to do well, especially in the low end PvP, NEEDS to have the OP PvP-gear, at least if they haven't already previously got the warlord gear, which they will never get without the crowns gear.
The plans for the 5th age are to remove the OP PvP-gear which you can get from tickets, but in that case the crowns-only gear will just become even more dominant, only moving the problem and not solving it in the slightest.
Even if the crowns-only gear would be sold for a hefty price-point in the crowns shop it would be annoying, but still better than literally having no guaranteed way of ever getting it, as the lootboxes could just drain infinite amount of money without ever giving you what you want. Unless of course, there are some hidden "pity-timers" which guarantee certain loot after a certain amount of rolls, but that information is not disclosed to us. (of course it isn't..)
This point is made far worse by the additional RNG-added to the crowns-only equipment, like may-cast wands, which completely ruin any kind of semblance of a competitive experience the moment they go off. You cannot strategise against random attacks.
Solution possibilities:
Remove the crowns-only equipment, nerf it to be in par with the normally attainable gear, give everyone easier access to the crowns-gear, or just limit it to be non-PvP.

1. Ranked PvP costs to attend (to non-subscribers)

- I have played hundreds, if not thousands of games during my short life, as I think games, video games especially, are one of the greatest man-made things ever created. I also have a Master's degree in game design, and I'm currently studying a PhD-related to the topic, and I have NEVER, I mean NEVER EVER, come across another game which would charge their players for attending the competitive scene, and not offer a permanent way of unlocking it somehow (this does not include games which are completely pay-to-play, with the paying including everything, as well as PvP, like World of Warcarft). It not only does not make any sense, as you really want to have people growing a PvP-community around any kind of online-game which wants to stay active when the main PvE content runs stale, which always happens between expansions in MMOs, but paywalling a game mode will cause even the players who do play to get a sub-bar experience due to lack of players, especially new players.
I completely understand that the point is and always have been to attract people to the subscription-method of paying. Well, I have to say that I personally hate subscription method as a customer, but I know that a lot of people think that's alright. To me it just feels like I have to rush and play as much as I can during a subscription, even when I don't really even want to, causing the time spent to be less enjoyable than if there was no fixed time. This is one of the main reasons WoW never attracted me, as I can't stand subscriptions.
Thankfully, wizard101 has another option, paying by area. The cost of the areas is so high, and there is more added after every world, that the game would not actually make any less money by attracting people more towards the area-buying option. It would also truly incentivize developers to create new worlds more often, as the payout would be more clear. For subscription-players, adding Karamelle did not really cause a reason to spend more, as they already had access to it, so creating worlds more frequently only serves to lure back players who have stopped playing completely after their memberships ended and they maxed out the content, as the game didn't offer enough to do as a "temporarily f2p-player".
This could be solved by letting everyone compete in the ranked PvP (and why not derby too) even when they are not members. This would give players a reason to login to the game when they are not subscribing, and to players who seek to mostly play PvP, it would provide more opponents. I mean seriously, what game which has this many players online for the PvE has such a ridiculously small PvP-community? Even back in 2011-2013 when the game was fairly young and I played in the UK server (had to migrate to the US this year as the server there is dead), it was basically impossible to find 3v3 or 4v4 ranked games, and even the practice games weren't that common. While I really enjoy 1v1, I think the strategic difference in other modes is something players cannot and have never been able to explore due to the lack of players. And that is a very sad thing for a game that is already 12 years old.
So basically, the ranked PvP needs to either be completely free, OR there needs to be a way to permanently unlock it (preferably with gold, or at least with a reasonable crowns fee). This way players who are not members, or who (like myself) don't want to be members can still participate and bring more players to the table. You can see this change already in the tournaments being free: during the time I played ages ago and tournaments came, I never got to play a single tournament despite trying many times, as there were never enough players willing to pay the crowns fee. Now, nearly all of the tournaments start, at least for some level players and that is great. I fear though, that KI has learned nothing and will switch the cost back up with the start of the 5th Age.
What some larger game companies for some reason don't understand, is that f2p-players are not worthless, they are the reason why most online-games stay online: they create the incentives for people to spend in the first place, and if you manage to keep the f2p-players happy, you will get a lot more paying players just through word-of-mouth, than if you only try to keep paying players. (We can see a terrible example of how not to do this already by how limited the new f2p experience is, still after 12 years.)

1. Spellments and unobtainable spells

- I'm sure no one reading this was surprised about this next topic, but as well as basically unobtainable gear, unobtainable spells and spells which are stronger than the normal versions of those and can basically only be upgraded through packs also break the "harmony" of a competitive experience. There are currently some spells which cannot be learnt other than through packs, and while not all of them are game-breaking, they can still in certain circumstances offer an unfair advantage, or even if they would not now, they certainly will in the future with the direction we are going towards. The solution for this is simple, but KI won't do it, as they are too invested in milking children for that undisclosed chance of getting some of those spells. (I won't buy a single pack personally and I will attempt to estimate how much disadvantaged I will be now and in the future for as long as I remain interested.)
For the unobtainable, another part is the spells which can only be got through luck while farming. That sure is a lot better, as technically the farming doesn't cost anything as long as you have access to the area and you will get other useful rewards while doing that. The problem arises though, if those spells, especially the infamous Headless Horseman, are so strong, that you NEED to have them in the PvP to stay competitive. And to make matters worse, of course the intended way to get these spells as well is to buy packs instead of farming. (I have been testing the lorefarm, got one spell which isn't useful to me after around 100 tries. I think that's a bit much just to get prepared to be on even footing on PvP, talk about new player PvP experience.)
Now then, spellments, are another kind of monster added to the game. I naturally enjoy the concept of upgrading spells, and making low-level spells more useful in the late game is not a bad design choice, it's just that it revolves around the same problem that everything I've been talking about this far, lootboxes.
I know that there are some ways of farming spellments technically for free, but apart from a specific few, those are barred behind skeleton key doors, and there are no other ways to get those than farming, and.. yes you guessed it, randomly from packs! You see the theme here? And even though some of those only give minor damage enchants which won't matter too much on the average eye, the utility buffs (namely the myth's troll minion summon upgrade) are just blatant forms of p2w gambling.
Solution, make spellments available to everyone more easily, not just randomly to select few whales. If KI would actually do this, despite all odds, then their purpose would actually come to reality and they would enhance the game experience, letting people experiment with different kind of combinations in the late game. Also there needs to me many more paths, only two kinda makes the whole combination idea pretty pointless.
Alternatively, restrict spellments to PvE only.
SUMMARY JUDGEMENT:
I liked the changes to the crit system, restricting more previously necessary cards and enchanted TCs outside of PvP , and turn-based system, those are a good start, but won't make a difference if the above three points stand unchanged. The main problem in the monetization is the gambling in the form of lootboxes, which is like the worst kind of cheap mobile game experience. The game has beautiful world and animations and the basic idea behind the combat is simple, yet interesting, and it can lead to very interesting situations. Nerffing and buffing spells/items won't make a difference while the OP-items/spells from lootboxes remain as KI's main interest.
Also for anyone to be able to experience something other than 1v1 ranked PvP, the first step needs to be removing the barrier of entry, or creating an option for permanent unlocking at least.
I have very little hope for them suddenly changing their 12-year course and giving up lootbox-p2w from PvP, but this has been quite a year so I guess nothing is impossible. Here's for hoping.
Signing off.

Link to AMA Recap
Dylan Dewdney | Kylin Network — CEO
Let’s do it!
Bilo 2000
It’s our pleasure to have you with us today, Dylan Dewdney, Kylin Network’s CEO. I would like to welcome you here on behalf of our entire community.
Dylan Dewdney | Kylin Network — CEO
Thanks so much and look forward!
Bilo 2000
Could we begin with a brief history of yourself and your team, and your roles at Kylin Network and what you were doing before Kylin Network?
Dylan Dewdney | Kylin Network — CEO
I’ll try and keep it brief, though it’s a pretty long story tbh:
For me:
1) I wanted to be an academic, and I was really interested in revolutions and social movements throughout history. In paradigmatic revolutions, ideas about Hegelian Dialectics, punk ethos, the Situationists, etc.
2) Started to get into ideas about value in online life in 2006–7
in game currencies and economies
etc.
then discovered BTC randomly in late 2010
Shelved it in my mind then came across it again late 2011, and just got progressively more involved in the space/industry
Lots of twists and turns
That’s me in a nutshell. Re: the team:
We are a pretty deep group, and I am unsure of other groups in Polkadot space at least with as many heavyweights involved
We were all sort of biding our time until a technical framework came along that we felt could comprehensively, and economically solve the Oracle Problem.
We felt that was Polkadot. When the time was right, we struck.
Bilo 2000
Thanks for indulging — Always interested in hearing about revolutionaries like you and many in this ecosystem :)
Can you tell us about why you thought Kylin Network needed to be built and what problem it solves?
How did Kylin Network start?
Dylan Dewdney | Kylin Network — CEO
I felt that the Oracle Problem needed to be solved, that is, how do we connect real world events and info to the chain?
I didn’t think it could be solved adequately until Polkadot came along. I think the idea was that ERC-20 / ethereum was the route to a lot of this, but the technical team there really sat a lot tbh. I know this because I know people close to the highest levels of that team and some people were literally just chilling for a while.
Bilo 2000
Nice! — thanks
Dylan Dewdney | Kylin Network — CEO
I might be speaking out of turn, but we needed a framework and we needed a technical innovation in order to unlock the potentiality of an economical oracle solution
That was contained in Polkadot — there are still some major challenges ahead, but the basic way forward of a shared relay chain is the correct way IMO
Bilo 2000
How would you describe Kylin Network if you were talking to someone unfamiliar with digital assets?
Dylan Dewdney | Kylin Network — CEO
If they were completely unfamiliar with digital assets, I’d say, well, you know google and Facebook are ad companies, right? And these companies form an overall global economy based on the buying and selling of data. Well, what if this buying and selling of data was not centralized? What if companies could monetize any sort of data they wanted, or hook into premium data feeds and squeeze value where they couldn’t before?
Bilo 2000
Very interesting
Dylan Dewdney | Kylin Network — CEO
That’s what Kylin represents in the long-term vision.
The low-hanging fruit and the easier part quite frankly is enabling the DeFi world in crypto, which depends on reliable price feeding. If I’m selling apples, I need to know how much people will pay
We help people have a reliable picture of the price of apples
Bilo 2000
Thanks — great explanation!
Dylan Dewdney | Kylin Network — CEO
my pleasure!
Bilo 2000
Some more technical questions here:
Dylan Dewdney | Kylin Network — CEO
please
Bilo 2000
If you run a validator or nominator on either Polkadot or Kusama, does that increase your chances to be able to run a Kylin validator in the earliest stages of Kylin Network?
Dylan Dewdney | Kylin Network — CEO
Well, yes, in a circumspect, way, though
We have a vetting process to become part of the first round of validators and one of the indicators would likely be that
Bilo 2000
Since you are building as a project in the DOT ecosystem: what are your plans for the rococo testnet, and eventually for the DOT parachain auctions in 2021? What is your goal and how do you intend to achieve it?
Dylan Dewdney | Kylin Network — CEO
As soon as the POC testnet is done, we will press forward.
With respect to the parachain auctions, we are gathering resources for a massive shot at this IMO.
The goal is to get to parachain, of course, but the biggest goal is use and use cases and people getting value out of what we are up to.
Bilo 2000
As a decentralized data network, and mainnet en route for q1 2021 are there already established use-cases, i.e. concrete partnerships in the sectors that you list as possible applications on your main site, that you could reveal or describe?
Dylan Dewdney | Kylin Network — CEO
Just to be clear, mainnet is probably late q2 (if not q3)
Established use case is clear: traditional oracle services for which we have already announced many partnerships (and more to come!): tidal, reef, deficliq, etc. etc.
Bilo 2000
Ok — good to know — thanks for correcting that
Dylan Dewdney | Kylin Network — CEO
These projects are willing to partner based on this use case alone as we are able to provide oracle services extremely economically (i.e. we will likely power our own basic price feed)
With respect to use cases outside of price feeding for defi — there are some concrete things we’ve been discussing with partners: i.e. helping them monetize idle data and data sets behind a KYL-enabled paywall. A lot of the info at the command of these projects is extremely valuable.
Bilo 2000
Thanks — I will get to some of the oracle type question further on in the conversation
Dylan Dewdney | Kylin Network — CEO
In addition, there are cool innovation paths that — to some extent — have value to society that can’t really be measured in crypto or dollars like validating election outcomes, or unfettering the concentration of wealth to the centralization of the internet
Bilo 2000
That’s great and actually leads down a path where I personally am seeing more and more adoption of social benefits rather than only financial ones. Good on you and your team!
love your gifs btw :)
Dylan Dewdney | Kylin Network — CEO
One thing that I’m particularly keen on helping to kick-start is the monetization of genomic data
Bilo 2000
That requires a high level of privacy — how do you address that?
Dylan Dewdney | Kylin Network — CEO
People can literally start potentially whole companies on the basis of an ideation within Kylin
Dylan Dewdney | Kylin Network — CEO
One of the bottlenecks is that indeed.
Bilo 2000
Fair enough — very glad to see that it’s an acknowledged challenge which only means it’s something you view as essential
Bilo 2000
When it comes to Application Scenarios, Kylin mentions “automatic payment of insurance such as flight delay insurance” and “off-chain real-time price data” as well as “casinos and games.” Are you engaged with non BC real world companies in relation to these scenarios and if so can you tell us more, even some names if possible please?
Dylan Dewdney | Kylin Network — CEO
Kylin allows a framework whereby data can be bought and sold in a decentralized way. This element has been missing previously, so projects like these:
https://www.labiotech.eu/genomics/blockchain-control-genomic-data/
have had sort of a basic issue in the past that they’ve needed some framework to address this, but they just haven’t until now
Dylan Dewdney | Kylin Network — CEO
So these companies have a way to actualize your genomic data, but not really an effective way to address market creation in a decentralized manner
Bilo 2000
What is the Kylin token used for? Can you describe the Tokenomics?
Dylan Dewdney | Kylin Network — CEO
This is actually a slow process getting enterprise-level (non-BC) companies involved. You typically need to get engaged with their innovation departments and/ or BC inno deps. If they have them. We are starting those convos now
But yes, it looks very promising that an insurance company would like to get in front of something that could easily erode an aspect of their business (flight insurance). In this example, Kylin would be driving the results to know when payouts would, occur in a highly efficient flight insurance application of some kind.
Bilo 2000
Thanks for your detailed answers
Dylan Dewdney | Kylin Network — CEO
Kylin token is:
1) staking and arbitration of nodes, 2) access — for example behind a paywall 3) governance
Bilo 2000
Thanks — what percentage of the total supply is already sold and what are the plans for the public trading coming up?
Dylan Dewdney | Kylin Network — CEO
Approx. 17% of tokens are spoken for either through investment or advisory
Bilo 2000
Thanks — Do you know when the token will be made available for buying/trading and where?
Dylan Dewdney | Kylin Network — CEO
Re: public trading, in all likelihood we will list on a tier 1 or 1.5 exchange with a concurrent liquidity event (I personally like Polkastarter a lot).
The timing for this is still Jan/Feb.
Bilo 2000
That’s fantastic! Looking forward to this
What is the most powerful narrative which drive tokenomics in the current zeitgeist of DeFi and desire for yields?
Dylan Dewdney | Kylin Network — CEO
Greed
Bilo 2000
hahahahahahaha
moving on ;)
Dylan Dewdney | Kylin Network — CEO
True though, no?
haha
Bilo 2000
Very true!!! lol
Dylan Dewdney | Kylin Network — CEO
I think despite that, though (and less cynically), is the narrative that sees DeFi to finance as basically what email was to postal services
Bilo 2000
Is Kylin Network disruptive and if so how so? & Would you consider Kylin a competitor to Chainlink or other oracles?
Dylan Dewdney | Kylin Network — CEO
I see us as more constructive than disruptive in the sense that we are not really trying to say, ‘hey we are disrupting this or that established industry” — it’s more like we are building something entirely new.
We are laying out an entirely new path toward a globalized, decentralized data economy that people will imagine on. Kylin is a sandbox, ultimately.
Not directly, no, though we certainly include these services and it’s very likely that if we achieve everything we want to we would be a natural choice for anyone wanting them
Bilo 2000
Does what your building compete with other oracles though or does your oracle do something different that they don’t?
Dylan Dewdney | Kylin Network — CEO
We compete directly in the sense we accomplish same function. I think the way we do it is more robust and ultimately more sustainable in the long-term bc of where we are building — Polkadot. Oracle services are going to be pretty cheap very soon I think. The more important play IMO is actualizing the overall data economy
Though most people focus on the oracle + defi dynamic
Bilo 2000
Thanks — That’s perfect. Its more interesting to investors I think to see new projects competing with the older ones — This drives re-innovation as well
Dylan Dewdney | Kylin Network — CEO
Agreed
Bilo 2000
Speaking of which, there are several Oracles both on DOT and other platforms. Some of these are giants like Link, Band etc. All these projects will compete against each other for the available market share. Is there a way to collaborate with the competitors rather than compete for the market share pie?
Dylan Dewdney | Kylin Network — CEO
I don’t think we need to tbh — and I see obsolescence for any project focusing only on oracle
Bilo 2000
Clear — Thanks
Dylan Dewdney | Kylin Network — CEO
The thing is that, logically, why would you not, all things being equal, use a handful of oracles?
Bilo 2000
Could you please provide us with some challenges Kylin has faced but overcome?
Dylan Dewdney | Kylin Network — CEO
Definitely the beginning. Just establishing that we were a real, legitimate project could be tough. You can take it personally at times. Then the web 3 grant. Pitching our first advisory members. Getting our first funders. The daily challenges both personal and professional that always intervene.
Bilo 2000
I’m sure this was not easy
Dylan Dewdney | Kylin Network — CEO
We were extremely strategic, that said, about our timing and the market conditions and focus on oracle + Polkadot definitely have helped
Bilo 2000
This might be tied to the question above, but as we all understand oracles face this problem of high costs and difficulty in feeding off-chain data. Could you please expand on how Kylin is looking to break through this problem?
Dylan Dewdney | Kylin Network — CEO
and in this space, it’s a nail-biting procedure not rushing investment (to get the right investors), but knowing how volatile everything is too, and some broader macro thing could happen making that super hard
The issue is technical — it’s a sequential chain on ethereum: everyone is in line to get their lunch at the cafeteria, which tries to serve a variety of ok food at once to the broadest possible audience (and as anyone who has tried the meatloaf will know, it’s ok, but nothing amazing). The parallel-ness of Polkadot is more like a bunch of food trucks that share a power source and serve each person in a specific way to their needs: taco truck, burgers, Chinese, etc. etc.
Most prosaic and accessible way I can put it
Bilo 2000
That’s perfect — Concise and well explained as usual 😁
Dylan Dewdney | Kylin Network — CEO
To extend that analogy further so it really makes sense:
Say the cafeteria has a pizza day, well, lines will be long
Pizza day is interest congestion
Bilo 2000
hahaha — You’re making me hungry now 😋
Dylan Dewdney | Kylin Network — CEO
Haha anyway, clearly haven’t eaten yet
But yeah, there’s a problem of throughput in providing oracle services via eth
But, yeah, in Polkadot, another food truck (serving pizza) just rolls up and parks
Bilo 2000
Who are you primarily targeting as a consumer of the products and services that Kylin will offer? Government, Business, or retail markets?
Dylan Dewdney | Kylin Network — CEO
All tbh — there’s no ultimate primary target, per se. in the beginning, we will be working through Kylin Labs primarily to drive use cases within crypto-oriented businesses, but concurrently, we will drive conversations with paths to traditional business, banking, etc. everybody needs useful, validated data, and/or can sell it
The same way that defi operationalized idle crypto assets, Kylin will operationalize idle data
Bilo 2000
Ok thanks — its good in that you have a wide horizon of possibilities
How are you with time? How much time do you have left for us?
Dylan Dewdney | Kylin Network — CEO
8 minutes
Bilo 2000
ok — will rush through😰
Out of your ecosystem fit partners you have listed on your website and in your white paper(the same 6 in both places, with the addition of Phala on the website), you have publicly announced partnerships with a few of them. Have you been in contact with all of them about future collaborative efforts?
Can you tell us why the newly announced partnership with Plasma play is important and can you let us know if there plans for more such partnerships in the future?
Dylan Dewdney | Kylin Network — CEO
…Unfortunately — this AMA has been awesome so far
Bilo 2000
No worries mate — If you can’t answer a question now; you can answer it later if you are rushed.
Dylan Dewdney | Kylin Network — CEO
Those examples were more how we saw ourselves evolving — i.e. potential ecosystem. In any case, we are on the mark, and I do expect them all to probably become integrated as time goes on.
Bilo 2000
Thanks Dylan — Do you wish to let us know anything else that was not covered in the questions above?
Dylan Dewdney | Kylin Network — CEO
and yes, we are close to every crypto project listed there
Plasma Pay is important bc we see us co-evolving really well together
no, I think we are pretty good!
Bilo 2000
Thank you for your time in answering our questions here today. We are all very appreciative of your time and of the answers you have provided.
Kindly choose the question you found the most interesting so that we can provide the person that asked that question with the prize.
Dylan Dewdney | Kylin Network — CEO
It’s been a total pleasure
Bilo 2000
With this, we will open up the chat for those who wish to personally thank you for your time with us here today.
Dylan Dewdney | Kylin Network — CEO
This one was excellent!
Thanks so much to your community for having me today. Really truly appreciate you guys giving me the time to talk about Kylin and asking such great questions.
Please check us out at:
TG: https://t.me/KylinOfficial
Polkadot based project news and AMAs: https://t.me/PolkAMAOfficial
Medium: https://kylinnetwork.medium.com/
Twitter: https://twitter.com/Kylin_Network
Website: https://kylin.network/
Crypto Society TG Group: https://t.me/cryptosocietyy