Decentralized Finance and the Great Expectations in a Bear Market
We inherently set ourselves expectations for everything, perpetually, every second of every single day. Those expectations can be the underlying judgement in every decision we make, everything we buy, and everything we feel. Some may say that is far too often, however consider the example of a baby, as we all were, newborn and unable to speak yet, sets expectations by its environment and experiences, hence the decision to cry for the expected result of being fed.
Or perhaps also the large amount of the population that claims they do not like hospitals, for a variety of excusable or justifiable reasons they’ve convinced themselves, but is actually from setting that expectation subconsciously with the experience of the very first breath taken. To inflate the lungs upon birth, the perceived violent strike on the buttocks by the doctor startles the senses and awakens the consciousness, wherein that moment setting an internal expectation based on it’s respiratory awakening that the environment it’s in. The lights, smells, and sounds equate pain and discomfort, shock and fear, a barrage of sensations and decisions to immediately assimilate, that permanently effect the unconscious basis of their opinion of that environment into adulthood or hospice due to the connotations remembered from their own birthing experience.
We have similar examples of the above analogy in our DeFi introductions. Do we consciously remember our first tweet for the space, the first discord invite we accepted, the first mint button we pressed, or even the first time our wallets were hacked? I do though most may not, sans the last example, their subconscious has formed an expectation of the space, and in turn determined their behavior in the space, rugged begets ruggers, negative experience can spawn a bad actor taking vengeance for that initial experience in the metaverse.
That is to say that they cognitively received the information so negatively, they wrapped it tightly and entirely in emotion. That vendetta then outweighs their education of the space. Chart psychology in trading study is to train the mind to control those emotions by adjusting how you receive information. An example often used in Trading in the Zone by Mark Douglas, is when a toddler first encounters a dog, emphasizing the lessons throughout the chapters with the parts of the story where pertinent, but illustrating the expectations manifested from said experience in every way. This bear market, or crypto winter, has certainly given a majority of the space an emotional response many have witnessed on various social media platforms with such palpability it brings me back to that toddler with the dog, mentally assessing a breakdown into 3 great expectations:
- The expectations of decentralized finance
- The expectations of projects/teams
- The expectations of self
DeFi Expectations in a Bear Market
In some cases expectations are an absolute necessary evil for both project and investor in the current market. Recently, the ever-growing toxicity on Twitter seems to be where the masses are gathering to FUD communities and the space as a whole. It is expected in the NFT space to encounter investors or spectators distaste for a project. In my DYOR, I intentionally seek them out to inform a well-rounded opinion with my strategy or to invest at all with the most facts findable. The SA is equally as important as TA or FA in a market this bear where good teams and projects can be faded, overlooked, or fudded and ultimately fail, plummeting immediately following launch due to small investor pools created by the loudness and stretch the negative SA can be. A DeFi project’s expectation is to have investors, even rugs have this as they need investors money to take when they rug, but to have them is the main expectation of any project.
“My SOL Friends, please spread this — This project rugged on #AVAX and looks like they are looking to move chains. Please black ball them! They will only do the same thing on your chain!” — MercyMe
A misconception, due to a set expectation, for new investors is their investment and/or passive incomes from the space, will be so substantial it will enable them to quit their job immediately, but in most cases they hold fast to the WAGMI mantra more to convince themselves that their expectation will come to fruition, begging the question, did they DYOR and see on some chains, they don’t actually own the NFT they minted?
Project Assumptions and Team Expectations
In the NFT space, we see rugs daily. Some teams have taken to deceitful measures based on overhype to garner attention from social media, and more frequently lately, relied solely on that hype to pump and dump on investors. Some have realized adding certain trending flashy keywords in posts can get more investors. Always should be recommended to DYOR on the people behind the project, not just the project itself. The rugging projects have assumed everyone will overlook that with their carefully crafted posts to prey on FOMO.
The current market situation can turn even experienced investors into desperate newcomer again harboring uncontrollable emotions with particular word choice in 140 characters or less. It’s astounding the amount of subliminal racism, among bigotry and several other things, in a ‘millennial’ financial system, the same millennials cultivated ‘cancel culture’ and a ‘woke’ generation in society. The ironic contradiction is increasingly more blatant, veiled as humor yet proving that most invest without any DYOR on the team, and compromise their own woke doctrine, embracing a rugging culture rather than investing in a team building utility and sustainability in the depths of the crypto winter season.
The clichés we hear daily of ‘we’re building’ and ‘working quietly in the background’ from a rug makes it even harder for actual teams building actual sustainability in the space and with the current market indicators showing a recession is imminent. The next time you read those phrases, hopefully you will take a moment to look into what the have actually built and released, and divorce yourselves from those influencers or projects you see continually use trendy keyword catchphrases and not actually produce anything, the work speaks louder than words spoken in most NFT projects, moreover, that a staking protocol with a native token is also increasingly evident is not the only desirable function of a project anymore. Now the meta is free mints. If that is where the roadmap ends, that means the team has not thought about their own project in the long term, signaling a race between the two; the investor’s investment going to $0, and the project with no appreciating assets to rug.
“Is free mints helping or hurting the ecosystem?” — Echelon
The expectations investors have for a team requires giveaways, raffles and rewards for holders to build their communities immediately, but again sets an unsustainable precedent unless done properly. Smart money invests in innovation. The teams expect to promote growth of their community, and investors expect a team to provide ROI for there investment, as most do, but some demand to swiftly get back everything they have put into a protocol almost instantly following the investment, but the responsibility of both parties expectations of each other realistically lays deeper than that, otherwise it’s another juxtaposing stance of the desire for long term project health and incubating a ‘paper hands’ meta culture. Understanding cognitive dissonance in investors actions and desires, and in projects actions and delivery, is detrimental to surviving a bear market winter and separates the novices from smart money in both regards.
“Don’t be fooled that anyone in this space might actually care about you …unless you directly benefit them somehow.” — Honey8
Expectations of Self in DeFi
Generally, human nature wants to the see the good in everything, but that in itself is an expectation of a subjective perspective. No matter the extent of analysis, we impose expectations of everything in our environment that can hinder or help:
- Expectations expect results
- Expectations can an impede your psychological acceptance of a new philosophy
- Expectations can also be the motivation that pushes us/projects further
Psychologically it is imperative to realize and understand that setting expectations, both consciously and unconsciously, innately expects results of some kind. The result may not be the intended desire of any party involved, but is still required to satiate the expectation set forth.
“The limit is not the sky, it is our minds.” — Wim Hof
Expectations can hinder growth in both parties involved also. When set, they force the mind to cage its thinking to only along those lines, or in only that ballpark or approved range their expectation has determined the result to be. This ultimately hinders an open mind to entertain any other options for success by limiting capabilities of pivots, innovative utility and dApp functionality, rendering themselves to remain a copy-pasta protocol and useless to smart money and the space. Freeze the Fear with Wim Hof and take control of the power of your own mind.
“Criticism polishes the diamond of truth.” — Wim Hof
Expertly placed expectations however, can drive new innovation in a scenario where a project has began as a replica or fork of another project, brings with it the desire to improve on themselves and the project they mirror. To accomplish anything in this space means to do something better than the predecessors or those that sparked the inspiration from the start. The pace in which the space can move, change or evolve, is exemplary of the innovation and adaptability needed to be successful in DeFi.
Where does DeFi go from here? Any response to that sets an expectation, where at best we should rely on an educated and informed hypothesis based on prior experiences, analysis, and DYOR to shape innovation of a project and its future paired with investor success. Seek the true value of ourselves and dissolve the unnecessary expectations that have conditioned us since birth. Develop strategies that fit the market, rather than trying to force the market to fit expectations. Sharpen the skills needed to detect rugs and prepare for a bull run.
