DeFi Chad’s, DeFi Corner: Case studies into my selection of high-growth, high-potential and high-yield DeFi tokens.
For some credibility, I’ll start by offering a background to my crypto journey thus far.
I have been trading cryptocurrency since 2011 when I first used BTC to make a purchase on the original Silk Road (I did think twice about admitting that but let’s be honest, how else would 99% of people know about BTC in 2011 otherwise? Especially students).
I was fascinated and immediately saw the potential of cryptocurrency as a medium of exchange that offered something FIAT could not. I was young(er) and being from a non-economic background, it took me some time to actually understand the mechanics, tokenomics, incentives and wider-reaching implications of $BTC and that is partly why I did not use my student loan to buy up half the BTC supply when it was sub 1 USD. But I bought early and I bought cheap (but small, limited by my FIAT purchasing power).
Since then I have been trading BTC and ALT coins. I have watched this space transmogrify from a true Wild West to a respectable, exigent movement that will indeed solve many a problem in our troubled financial and economic system.
In hindsight, it was obvious that change had to come about as a sort of ‘revolution’. Because, the powers that be, simply lack an incentive to act. For them, the system works. For those who already own land, brick and mortar, gold, silver, industry, etc, toying around with multiplying their FIAT holdings is a fun, points-based game, where, in almost every circumstance, the bigger the crash in the economy, the bigger the profits — especially for the creditors.
They know the game, they can play the game, and they can win the game. But for the average Jane and Joe, all we have is those silly little digital (read: fictional) FIAT vapour-credits depreciating in our centralized bank accounts. And when the economy crashes, we take the hit, we go from being wage-enslaved by a complicated economic structure to being destitute. We suffer mostly because (and forgive my tin-hat approach here) we were never taught, on the rudimentary/elementary level, to understand finance and economics.
Think about it! Finance, economics, taxes & civilian law should be next to the English language right from primary school upward. It is these subjects (along with the classics) that produce intelligent, wise, effective and formidable adults. And maybe that is why they aren’t as infused in the mandatory syllabus as they should be, could be or would be if there wasn’t a reason to the contrary. But like many, I learned on my own, sacrificing nights out with my Silk Road purchases to dig deep into economics and endless threads on bitcointalk. Mostly, I only have the invention of blockchain to thank which, I believe, has open many a closed eye to the fascinating world of finance, while symbolising one of the largest (or significant) transfers of wealth in history. So no, I’m not an expert in a professional sense, being the result instead of my own autodidact compulsions.
When ALTs really started to blossom (with the introduction of CoinMarketCap in 2013, resulting in the first popular token tracking site) I began playing around with tokens I still hold today, as well as some I cashed out in 2017 — XRP (forgive me), Namecoin, Feathercoin, Novacoin, Worldcoin, Quarkcoin, Litecoin (all of these held top 10 positions for a pretty long time and let’s face it, it’s not much better now). Back then, these were worth negligible fractions of what they are today (in the case of XRP and LTC but not the others).
While it is always hard to connect the dots looking forward (and ever so easy to do so looking backwards), it was indeed easy to see BTC being a success but very hard to imagine the others moving forward. To be honest, the exact same thinking, not just in myself, but as a wider community across reddit, bitcointalk and other forums, existed then just as much as today. For me, sentiment and ‘zeitgeist’ analysis is a very important part of investing (particularly speculative trading). I have lived through 5 BTC bubbles and subsequent bear markets (all of which crashed the price by between 70% and 95% for a significantly drawn out time) and to me, it is very bullish that a) it is still here and growing but b) the top 10 list on CMC still has moot tokens like $LTC, $XRP, $BSV, $BCH etc. I.e. We are just at the beginning because the promise of DeFi, smart-contracts, cryptocurrency and blockchain is yet to truly blossom.
I bought ETH in 2016 and went on to explore even further the world of ALTs. While I chose not to participate in any ICOs directly, I began researching and accumulating the various ERC20 tokens and began to grok the true possibilities the world computer that is Ethereum brings. To be honest, BTC will always hold a place in my heart and be the true CHAD token (if you got in early) but ultimately, provided Ethereum can continue shipping (cough ETH 2.0 cough) then what it offers is a whole world more exciting. I will dive into this as the editions go on.
This blog is going to be a long-term thing, beginning with a series of case studies into a basket of #DeFi tokens. While it is inevitable that 90% of these tokens will be built on Ethereum, they won’t all be and I am not here as an ETH moon-kid. I don’t believe in partisan politics and BTC or ETH maximalism is nothing less than tribalism. But, due to Ethereum’s undeniable productivity and capability, it just so happens that so many of these tokens are built on it. I will dive into my personal top picks (which tokens I find the most promising) one by one, diving into tokenomics, distribution, fundamentals, technicals, price predictions (have your salt ready) and everything else that may be useful. I do this to contribute to the community through what is hopefully useful content but also as a labour of love and a way to further consolidate my personal research.
I am never always right and love a good back and forth — that’s how, in true Hegelian fashion, we synthesise left and right — so come at me, bro (in the comments or on twitter).
Below is my current basket of DeFi tokens and I will go through each one in what happens to be the most relevant order at the time of writing. Note, DeFi tokens carry a lot of promise and future potential but despite it being a no-brainer (to my brain) that isn’t to say they aren’t risky assets to invest in. Nor is the list below free of any tokens that may simply not succeed for one reason or another. It is a list of tokens that I think carry potential either in terms of long-term fundamental business use-case/value, short-term speculative gain or, most likely, a combination of both. This isn’t financial advice, use your capital cleverly and carefully, take responsibility, and never come running to me if things go south. (I have to say that for good practice but I assume most of you are already of a feather).
Now, my basket (as it is today):
- $BZRX — BZX
- $LEND — AAVE
- $COMP — Compound Finance
- $YFI — Yearn Finance
- $MKR — MakerDAO
- $SWAP — TrustSwap
- $KAVA — Kava
- $NEC — Deversifi
- $KNC — Kyber Network
- $BAL — Balancer Labs
- $MTA — mStable
- $GEN — DAOstack
- $ANT — Aragon
- $REN — RenProject
- $SNX — Synthetix
- $PNK — Kleros
- $BAT — Basic Attention Token
- $BNT — Bancor
- $DONUT — r/Ethtrader Community Token
Follow me on Medium, and follow me on Twitter. One last thing — don’t be a DeFi Virgin. Be a DeFi Chad.
