Let’s begin by acknowledging that investing in Decentralized Applications (DApps) is fundamentally different from investing in NFTs and meme tokens. With that said, let’s get into the matter.
Finding the right home for your ALPH is no easy task. Afterall, our ALPHs are limited. We need to be very strategic with our token allocation to efficiently manage our portfolio. This article highlights my thought process when I do my research and portfolio management. In crypto, there various tactics and strategies for growing your portfolio. It’s a mix of investing and a bit of trading. There is this well known strategy of 50% btc, 25% eth, 25% others. The wisdom is there. It teaches you that you need to diversify and think it through. It leads you to consider which tokens you want to invest in and which ones you truly understand.. It’s all about your proficiency in sifting through the rubble and finding the gem.
Researching
Your research skills are crucial and there are many considerations. Although it’s complex and challenging, we need to simplify it. After all, a complex methodology is hard to execute, and poor execution will only lead to poor performance. The truth is, no "crypto expert" or "fund manager" is going to hold your hand; it’s only going to be just you and your ego. So let’s dive into my considerations.
1. Token Utility – its challenging to create a dapp without a token. There will be nobody shilling it, no community backing it. If a project doesn’t have utility token, then there will be no dev war chest for marketing and future development other than grants, and grants aren’t easy to acquire. Now let's assume that this DAPP has decided to put on a token, think about how it will be utilized. How many people really need it? Everyone? A few? A niche? Now that’s an evaluation where quants shine the most, but you need to try.
2. Community Backing – We are here in crypto for one reason- Change. We’re here to change the future of finance, and for better or worse, to change our lives. If you believe that, then you can say that the people you are trading/investing with wanted the juiciest gains too! Essentially, the community backing the token is a good indicator. When there is smoke, there’s probably fire.
3. Value (Past, Present and Future)– Past performances are no guarantee of future performance. Which means, it's more optimal to take it where the token is NOW. Is it overvalued, or undervalued? How is the project doing in the past? How are they doing now? Did they improve? Did they deliver? You know, we’ve seen tons of L1 projects that has LOTS of potential on paper- they have fancy names, fancy ways of mapping their roadmap, fancy ways of implementing the "tech", tons of research papers backing, but they fall a lot on the execution. And when their L1 sucked, expect that they will give you more promises! (even lies!) The result is YOU holding a bag with only a promised potential. Essentially, you are at the founder’s mercy. (Does that sound like a government? hmm.) Further more, the community will become polarized. Leaders get attacked. The leaders will fight back! With money involved, emotions will join the party, people will be easily manipulated. I’m not gonna go further which L1 that is, its not that important but that is a thing that is going on in our industry, sad to say. So, it would be optimal to evaluate the NOW.
Portfolio Management
As far as strategy is concerned, like in our lives, there are stages. Your portfolio has stages too! The first stage involves strengthening your foundation. You might want to start with something that provides steady gains as you hold it (that sounds like AYIN, doesn’t it?) The next stage could involve diversifying your investments to protect those gains (or sometimes, hedge). You might put them into early projects that have massive value based on your research. If things go well, then the next step might be to look for the best roller coaster ride. This part might involve trading. This is why we have trading volume! This is why Decentralized Exchanges (DEXes) are flourishing and meme tokens rip everyone's faces right before the bull run ends.
Having shared that, here are the-
Top 5 DAPPs that I’m watching out for
AYIN - I know I sound like a broken record here, but AYIN retains the upside potential of my portfolio, it even gives it a little more push, and provides steady gains. As I have shared on my Twitter trdrmorz, I now hold a big chunk in ALPH AYIN LP. With an APY of 80-100%, I earn an average inflow of 40 ALPH per day. It’s crazy. I can either reinvest it in LP or DCA into other projects, or maybe take some to go for a good rewarding dinner. We don’t call it the money printer for no reason. They've also onboarded 4 more devs on their team and have been cooking since then.
ALPHPAD - If you research launchpads, they are the best place to be in the mania phase. People have tons of gains sitting and, as we mentioned earlier, they want to diversify and venture into new projects and probably a new tech that solves new problems that arose from the bull run. ALPHPAD already submitted their code for review, and I’m really excited to get my hands on it and I have reserved a hefty amount of allocation for this one. Check their latest Medium post here.
Invariant’s CLAMM - CLAMM is not a buzzword; it is something DEXes are looking into integrating. Essentially, with concentrated liquidity, the trading experience would be much better. Low slippage, probably cross-chain swaps, and lending. The potential is really there, not just FUTURE potential. As soon as it gets deployed, you’ll see the value right away. These folks are also hackathon winners. Not only that the OGs are backing it, the Alephium core team is actually backing it in one way or another! Will they have a token though? We don’t know. My guess is they would. DEXes need utility tokens. If not, they may opt for a fee service, but that takes out the fun for us. But hey, we wouldn’t know. So keep your eyes peeled on this bad boy.
The last two are tied. Its Linx Labs and ALPHBANK, If you’re interested in seeing how they progress- both projects have their unique offerings and potential in the crypto space.
Linx Labs' LinxOTC provides a personalized way of trading that can be especially beneficial for large transactions. It will be interesting to see how they would differentiate themselves in this competitive market. The last update that I have was that they are almost done with the P2P swaps and is already in the test net, and their P2P lending contracts is has completed refactoring. (Smart contract refactoring is the process of modifying the structure of a smart contract without changing its behaviour. This is done to improve the contract’s readability, reduce complexity, and make it easier to maintain.)
ALPHBANK -As a part of the Alephium ecosystem, ALPHBANK could potentially offer innovative financial solutions leveraging blockchain technology. Lending pools? Over-collateralized stable coins??! We’re about to find out. But I do see it having a significant impact on the Alephium ecosystem.
Remember, it’s crucial to continue doing your own research and stay updated with their latest developments. As these projects evolve, they may present new opportunities or challenges. Keep an eye on their official communication channels and updates from the team. Happy investing!
There’s one book I can recommend for beginners: “One Up on Wall Street” by Peter Lynch. If you want a quick summary of the book, you can start with this 10-min video.
And if you prefer listening over reading, here's a 2-hr full audiobook.
Thank you for joining me. If you found this content engaging and informative, follow Alephium Gazette on twitter! See you on the next one.
***Disclaimer:***The information provided in this article is for informational purposes only. It should not be considered financial advice. You should consult with a financial advisor or other professional to determine what may be best for your individual needs. We do not make any guarantee or other promise as to any results that may be obtained from using our content. No one should make any investment decision without first conducting their own research and due diligence. To the maximum extent permitted by law, we disclaim any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses. Remember that investing in crypto involves risk, and past performance is no guarantee of future results.
