The rise in popularity of cryptocurrency has been unprecedented. At the time of publication, more than 22 billion dollars had been locked into DeFi.
Bitcoin pulls in institutional capital, and we don’t know what impact it’ll have later on. Is there going to be monthly rebalancing? If that’s the case, imagine the bitcoin went up 100 percent. Will the institutions’ market sell 50% of their profits for their rebalancing and the effect of funds pouring back into stocks? If the market becomes more liquid, the volatility will dampen. So maybe we’re not going to expect more wild ups and downs. We don’t know, but maybe it’s a better idea to focus on the rest of the cryptocurrency markets-time to roll the dice and position ourselves in altcoins.
(This article was written on the 14th and has been republished on the 20th because I wanted a different title and it’s not possible to edit the URL on medium. Now I republished it on publish0x, I might stay if I like it here)
https://romanornr.medium.com/why-investing-in-defi-projects-after-a-2775-rise-is-an-excellent-entry-point-and-what-to-purchase-edeea5d32e8a
Anyway, I don’t have a lot of time to write an essay as a medium article and work on it for weeks, so I try to write it all down in an hour or two. Anyway, I’m on Adderall.
Some would state that altcoins are shitcoins, and they don’t have a future. Any altcoin is going to die, and history shows. 2018 did not end well for altcoins, nor did 2019. Unfortunately for the bitcoin maximalist, it’s not all set in stone and guaranteed. These claims and predictions that bitcoin will be the king forever is dangerous promise to make. Bitcoin became a religion to many people, and not many are critically thinking and asking whether bitcoin will really or fail due to bad design choices and not willing to change this.
In physics, the rules are “God” made. Immutable and permanent, In finance, it’s the exact opposite. The market rules are dictated not by God but by his creatures, which is us, humans. We create this creature, which is the market, and it’s going to change. The only thing that is guaranteed is that it will change. Normally people have a certain view about the world and base their portfolio on it. The boomer maximalist has it all backward. They seem to create their portfolio first and then create their view of the world based on that, they will be in for a rude awakening. The market will always be unpredictable and changeable. It’s the only thing that it can be.
Bitcoin is not immune to this, and there are signs that the market is changing. 1. Bitcoin is losing its first-mover advantage. The first-mover advantage is a myth. It’s a fallacy that the first mover always wins.
This is the reason why the internet didn’t take off until 1995. It took time for the internet to be adopted by the masses. The internet was not the first to be adopted. It was the second. It was the next generation of technology that was adopted first. The masses adopted the internet because it was better than the alternatives. The first generation of technology was slow and expensive. The second generation was faster and cheaper. The internet was the next generation of technology.
Is Bitcoin really as great as we assume?
Is this drop in inflation a positive thing? Why does the federal reserve choose inflation in the economy? Do we really inflate the economy to pump stocks? Why is Satoshi worshiped as a god-like character when his coding abilities weren’t as good? The white paper was written using Microsoft Word instead of LaTeX.g The narrative that using bitcoin as a payment mechanism is unfortunately not a great one. For payments, I mainly use stable coins. Big corporations don’t like the risk involved with volatile assets. Upon accepting bitcoin, a retailer would automatically exchange the money for fiat.
Other issues discussed include how long the Federal Reserve will last and how inflation will be eliminated. What story can you tell about bitcoin? Given the rate of inflation, is it the best idea to encourage people to save bitcoin instead of spending and to make it the only payment system? As a result, consumer spending decreases and negatively hurts the economy. We can’t do a hard fork or create a new code base because it requires much manual effort. Rust is a safer language than others. Developers are expected to perform at their best for free, which sounds like communism. Why the need for duck tape code together and hoping side chains will work. Bitcoin maximalists believe that hard forks are bad and users will eventually not upgrade their node “in time,” falling behind. Cryptocurrency traders are all using stable coins for transactions.
The idea was that one CPU equals one vote. Chinese miners dominate mining with huge farms in China. Were the early adopters of bitcoin miners primarily for scientific curiosity or to make profits? Currently, the early adopters of bitcoin are boomers, and they know we are about to replace fiat currency.
Older people blame the banks for the financial collapse. They feel entitled and expect the younger generation and to work without receiving compensation. The banks and hedge funds that undertook quantitative investing didn’t know much about market mechanics. Neither did we at the time. The first short squeeze had to happen before we could label it. No one knew the ramifications of such a drastic and widespread decision until it was too late. We didn’t understand the volatility smile. Blaming the banks, hedge funds, and quants for this phenomenon is similar to say that scientists know nothing because ten thousand years ago, they didn’t know what gravity was.
But ok, let’s scatter arguments together and not question our overlords at Blockstream and say “banks bad” like an NPC repeating everything the boomer is telling you from 2008. “Don’t trust but verify,” UASF or Sybil Attack. Ooh, I didn’t realize that Bitcoin Cash was so bad. Did we have an opportunity to review and understand whatever they are working on? Why isn’t there any official news about Bitcoin Cash on Twitter? Did they make private transactions on the underlying platform while we aren’t aware? Are we censoring them and claiming we don’t censor, but we don’t see propaganda because we are part of it and spreading it? Maybe. It matters. I stopped thinking that I knew everything because some other person told me so. We should try to avoid hypocrisy.
Meanwhile, in handicapped land.
Now, I hope you have become convinced that Bitcoin is not perfect, and there may be a new asset that could become the best overall. Just like religion, it will influence your attempts to start with critical thinking. If everyone claims god exists. Your neighbors, co-workers, friends, relatives, and even your parents you have to trust the most from birth provide you false information. If your friends in the community do, it does not mean that it is necessarily true.
OR MAYBE I FINALLY LOST MY MIND. I mean, we all knew it would happen. Not a question if but when.
The true DeFi god is this quarter rain man, Olaf Carlson-Wee
Every once in a while a new degen is spawned from the depths of mediocrity. The true DeFi god is this quarter rain man, Olaf Carlson-Wee betting $4 million on Ethereum tokens and turned it into $300 million within a few months. However, in 2020 he stunned the world by presenting his greatest show of all.
For crypto, the greatest show on earth was not bitcoin, but Compound.
Users were able to earn COMP tokens, a governance token, which gives users a discount on the interest rate they pay when they borrow assets on Compound. The assets users deposit on Compound were cryptocurrencies like wrapped bitcoin, ethereum, USDT, DAI, other stable coins, and altcoins. Users were incentivized to buy and hold their COMP tokens. Suddenly, the whole argument of the maxis fell apart. This altcoin had a real use case. Users were buying not for just price speculation but the use case.
Compound’s token price gained a lot of traction due to the actual demand for its use case, and not many were willing to sell. There we got it. Sell-side liquidity crisis. It took the world by surprise when Compound was listed on Coinbase, an unusual event coming from an exchange with such strict listing rules due to American users’ platform. Bootstrapping liquidity is a chicken and egg problem. Market makers need flow from products and users to chase profitable strategies. Without market makers, a spread that is meant to compensate market makers for their liquidity. It is why bitcoin is so volatile, and why bitcoin futures are so difficult to launch.
https://romanornr.medium.com/an-introduction-to-market-making-6826661f093b This is why DeFi is amazing. Think about Uniswap, liquidity pools, farming, etc. If you want to read more about Uniswap and its mechanism, I wrote an article about it.
https://romanornr.medium.com/uniswap-profit-of-the-automated-3d-fomo-pricing-mechanism-success-or-failure-90333514baf6 You can not compare this to 2017. This is truly decentralized. Bitcoin’s story was being your own bank. Ironically, bitcoin does not fulfill anything close to these standards of becoming your own bank. When you buy/sell credit default swaps, you can also loan money. For example, you can speculate or hedge your risk on whether a smart contract or platform has bugs in its code or gets hacked.
DeFi projects to pay attention in 2021 Q1
For places to buy, I’d much prefer buying on a centralized exchange. Ethereum gas fees for Uniswap are too expensive. It easily costs $50 to enter, exit. Not forget the Uniswap spread and fee itself.
For trading on FTX: 10% discount on fees instead of 5% you get from others: https://ftx.com/#a=10percentDiscountOnFees For trading on Binance: 20% discount on fees instead of 5% or 10% you get from others: https://www.binance.com/en/register?ref=SUL1QNJK If it’s on a centralized exchange, we can easily rebalance every week or month. I’d recommend Stacked, definitely the DeFi blue-chip index.
https://stackedinvest.com/?via=romano
Now if you are interested in investing in DeFi assets. I can perhaps help with recommendations.
Please forgive me. This is my first time trying publish0x. The text editor is different here
But if you don't know me, you can follow me on twitter: https://twitter.com/RNR_0
ALBT
One of the largest investments I have made is buying AllianceBlock token (ALBT). Disclaimer, I’m one of the few strategic investors. I participated in the presale. (This is not 2017, I did not get free tokens, I bought them)
This looks great. I’ve been calling it for weeks on Twitter. Up 600% during the last 30 days, but we have momentum ongoing. ALBT target is either $1 MINIMAL but aiming for $3 as I work as a strategic partner.
https://www.coingecko.com/en/coins/allianceblock
Rook
https://coinmarketcap.com/currencies/keeperdao/ KeeperDAO is one of my most favorite projects.
The place to trade: You can trade this best at Uniswap
SNX
https://coinmarketcap.com/currencies/synthetix-network-token/
The place to buy/trade: https://www.binance.com/en/register?ref=SUL1QNJK For futures trading: https://ftx.com/#a=10percentDiscountOnFees
SRM
https://www.coingecko.com/en/coins/serum
The best place to buy/trade is FTX: https://www.binance.com/en/register?ref=SUL1QNJK. Else you can use BINANCE but not stake: https://www.binance.com/en/register?ref=SUL1QNJK However, Binance has a futures market for SRM.
Disclaimer: I participated in the presale
Solana
The best place to buy/trade is Binance: https://www.binance.com/en/register?ref=SUL1QNJK For futures trading is FTX: https://ftx.com/#a=10percentDiscountOnFees
AKRO
https://www.coingecko.com/en/coins/akropolis
The best place to buy/trade: https://www.binance.com/en/register?ref=SUL1QNJK The other option is FTX: https://ftx.com/#a=10percentDiscountOnFees SPDR
https://coinmarketcap.com/currencies/en/spiderdao/ disclaimer: I participated in the presale. I’ve been farming this with 1200%+ so high inflation at the beginning and VC’s selling
GRT
The best place to buy/trade is Binance: https://www.binance.com/en/register?ref=SUL1QNJK For futures trading is FTX: https://ftx.com/#a=10percentDiscountOnFees
VALUE
XOR/Sora
https://www.coingecko.com/en/coins/sora The best place to buy/trade is Kucoin: https://www.kucoin.com/ucenter/signup?rcode=1su6c&lang=en_US ALPHA
MKR
www.coingecko.com
ONT
www.coingecko.com
DOT/Polkadot
https://www.coingecko.com/en/coins/polkadot
The best place to buy/trade is Binance: https://www.binance.com/en/register?ref=SUL1QNJK For futures trading is FTX: https://ftx.com/#a=10percentDiscountOnFees
Sushi
https://www.coingecko.com/en/coins/sushi The best place to buy/trade is Binance: https://www.binance.com/en/register?ref=SUL1QNJK For futures trading is FTX: https://ftx.com/#a=10percentDiscountOnFees LINK
The best place to buy/trade is Binance: https://www.binance.com/en/register?ref=SUL1QNJK For futures trading is FTX: https://ftx.com/#a=10percentDiscountOnFees
REEF
The best place to buy/trade is Binance: https://www.binance.com/en/register?ref=SUL1QNJK
Celo price, CELO price index, chart, and info | CoinGecko
www.coingecko.com
The best place to buy/trade is Binance: https://www.binance.com/en/register?ref=SUL1QNJK
REEF
https://www.coingecko.com/en/coins/reef-finance
The best place to buy/trade is FTX: https://ftx.com/#a=10percentDiscountOnFees.
The other option is Binance but with fewer benefits: https://www.binance.com/en/register?ref=SUL1QNJK.
API3
The best place to buy/trade is Kucoin: https://www.kucoin.com/ucenter/signup?rcode=1su6c&lang=en_US.
AVAX
The best place to buy/trade is Binance: https://www.binance.com/en/register?ref=SUL1QNJK.
For futures trading is FTX: https://ftx.com/#a=10percentDiscountOnFees.
FTM
The best place to buy/trade is Binance: https://www.binance.com/en/register?ref=SUL1QNJK.
YFI
https://www.coingecko.com/en/coins/yearn-finance The best place to buy/trade is Binance: https://www.binance.com/en/register?ref=SUL1QNJK.
For futures trading is FTX: https://ftx.com/#a=10percentDiscountOnFees
I didn’t include all my bags this time due to potentially too much conflict of interest. I use futures trading to get in and out of a position, By the way, you should practice portfolio management and rebalance your portfolio every month. This is how you beat the “buy and hodl” strategy without attempting to “time” the market. I might write about it one day.
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