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Four tips for a great 2022 in crypto

AVentures thesis series: Interview with Dr Mihajlo Popesku

Choose user-centric protocols

One of the most impressive technological leaps forward since the inception of blockchain was decentralised finance (DeFi). Traditional financial institutions got challengers in these new peer-to-peer protocols that enable permissionless borrowing, lending, trading and super-high yield rates. Yet, many of these DeFi protocols remain challenging to use and grasp. The underlying documentation is often heavy in jargon and complex math. However, the space has already attracted large volumes of smart money from retail and institutional investors willing to work hard for extra alpha. The market is also abundant in degens investing in a spray and pray manner.

The inflow of capital has gone out of steam recently, the signs of it being the heavy swings in crypto starting May 2021. To keep growing and avoid high volatility, dev teams must focus on customer experience. Protocols have to become super intuitive, easy to use, transparent and convenient. Ordinary retail investors, struggling with TradFi products, will need superior service and coaching. This would involve hand-holding in their first steps in crypto, live customer support, easy on and off-ramping of their fiat, excellent user experience and strong yields. Only then can the floodgates be open for further significant inflow of retail capital.

Pick games that seamlessly bridge Web2 & Web3

2022 is announced by many as the year of GameFi. The play-to-earn (P2E) games, such as Axie Infinity or Crabada, have proven to be a great success. Having fun and earning money while playing, feels almost like having cake and eating it too. Yet the impression is that GameFi is partially cannibalising DeFi, as the majority of GameFi adopters come from the DeFi vertical. Throughout this year the money will keep flowing from DeFi to GameFi dApps. However, for the win-win scenario to happen, and for both DeFi and GameFi to become winners at once, several things are needed:

  • Seamless transition from Web2 to Web3. Gamers are all about immediate gratification. The majority of off-chain players just can’t be bothered to jump through the hoops to get onto Web3 to start playing relatively simple games. No one should care whether their game is staged on or off-chain. The game should be accessible, and most importantly engaging and fun to play. Earning in parallel to having fun, can be a sticking point that would make players forgive the on-chain games for not having the quality of the off-chain game. Yet for the entire space to thrive, GameFi protocols have to find efficient and seamless ways of bringing Web2 players to Web3.
  • Games should be free or near-free to play. Gaming should not be a status symbol and a privilege of few. Such logic goes against principles of democratisation and fairness brought about by blockchain. Some of the currently popular P2E titles require players to splash anything between $500 and $5,000. This entry ticket is used for buying in-game items such as NFT characters and equipment. GameFi developers should start thinking about freemium or free P2E modes. This would invite a lot of off-chain players to join the space and learn more about possibilities in GameFi and beyond.
  • Games should be mobile-first. Games on the blockchain are by and large built for desktop and for in-browser play. Unfortunately, desktop computers are preferred as a working and serious play environment. The ultimate gaming tool of the present is a smartphone. Nothing can beat the convenience of playing games on mobile phones. In addition to this, mobile-first games are particularly important for tapping into the large population of young players in developing countries that have access to smartphones only.
  • Games should enable the player to player interaction. Games are a new type of social platform, and social interaction between players is an important aspect of any game’s longevity. Enabling players to chat with each other, befriend each other, have banter and for guilds is a recipe that has proven to be successful offline.

Zoom in and out

If you got scared by the most recent dip, you are not alone. Zooming in and seeing your portfolio bleeding can be a daunting and crushing experience. Yet, zooming out, a steady multi-year upward trend of the overall space is apparent. According to the Ark Big Ideas Report, by 2030 market capitalisation of the entire crypto space will reach $49T. This is a whopping 29x growth expected in the next few years. With 300 million users in crypto, we are at the stage where the Internet was 20 years ago. The space is still early but becoming increasingly sophisticated with specialisation verticals appearing. DeFi, GameFi, NFT and Metaverse will be instrumental for the anticipated expansion. These real utility applications are currently absorbing market shocks, protecting us from even bigger oscillations. Zooming in and out should help in setting informed short-term and long-term theses and forming your crypto-strategy.

Beware of black swans

No matter what your personal thesis is, what experts say, or what you believe, black swan or unexpected events can, for better or worse, flip the tables in crypto. Covid lockdowns, Evergrande’s demise, ban of crypto in China and Russia, increase in interest rates by FED, all have an impact on what is happening in space. Investors should not only have a clear strategy and a set of realistic objectives but also have a Plan B they could resort to if things go south. The space is rapidly moving and in the moments of sharp changes, it is difficult to resist afective behaviours such as FOMO (buy the top) or panic sell (sell the bottom). Failing to plan is planning to fail.

About Dr Mihajlo Popesku

Dr Popesku is a marketing scientist, tech entrepreneur, and crypto-evangelist. He is a co-founder and Chief Research Officer at Qudo, a London-based start-up with the mission to remove complexity from research by using artificial intelligence. With his colleagues at AVentures DAO, Dr Popesku supports and invests in early-stage crypto-projects native to Avalanche.

About AVentures

AVentures is an investment DAO composed of OG Avalanche community members on a mission to support the ecosystem. The team boasts multiple successful blockchain developers and project owners, content creators, advisors and domain experts that have come together to channel our expertise to support the Avalanche ecosystem.

AVentures DAO:

* Provides advisory and marketing support to new Avalanche projects
* Supports Avalanche projects by investing in seed/private rounds
* Incubates new projects via mentoring
* Publishes technical analysis on DeFi projects

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