We Are Always Searching for New Assets
While I was working for one of the world’s top lending protocols, a key strategy to increase the Total Value Locked (TVL) was to introduce new assets to the protocol. Whether it’s to provide new assets available for lending or to allow new assets to be collateralized for stablecoin loans, it’s an essential business development direction for the entire protocol. To prevent founders from cashing out their positions like in traditional finance, our team often undertook in-depth token analysis. We would seek high-quality projects based on market capitalization, project progress, wallet counts, among other parameters. As a result, most tokens couldn’t make their way into the lending market, especially those from the early stages of the crypto world that failed to complete effective due diligence.
This experience has made me very conservative towards cryptocurrency investments. In fact, it caused me to miss many opportunities.
How Exchanges Approach This
Listing coins on exchanges is much more lenient compared to bank lending. Exchanges profit from two sources: listing fees and market-making profits. This requires them to make more speculative judgments about a project’s or even the entire market’s potential. Of course, the potential growth of a project is a crucial consideration. We saw numerous projects during the DeFi Summer that reaped 100X returns after being listed on exchanges. Ultimately, they all aim to select products with potential for future growth.
Diving deep into the listing strategies of exchanges like Binance, Coinbase, OKX, and MEXC, while they may differ in approach, their foundational logic is similar.
Becoming an Airdrop Enthusiast
Becoming an airdrop enthusiast wasn’t intentional for me. As a builder, I was just doing what I loved, experiencing various projects and occasionally receiving rewards serendipitously. I never consciously strived to be “early,” but in retrospect, airdrops are essentially rewards for being “early.” These airdrop projects often lack tokens in their initial stages. They might be a repurposed Web 2.0 product or just a new concept. At this point, they don’t need your capital; they need your labor - whether it’s in the form of articles, code, or hardware nodes. Normally, it’s challenging to discern the criteria for a project’s airdrop. My approach is to invest in projects created by founders who understand the significance of decentralization and know how to achieve it progressively. This isn’t just a technical challenge but an engineering one. Overall, I’ve had a good success rate in this domain.
Altcoin as the Ultimate Destination
Oh no, this is the most sacred return to basics.
I was so arrogant about Altcoins, finding Alpha here seemed like child’s play.
This was a complete prejudice.
I might not know all the philosophical nuances of decentralization, but I firmly believe one of them is the ability to carve a successful path not previously taken. Otherwise, why not just head to investment banks or FAANG? There, a structured career ladder and established business models exist, freeing you from most worries.
Being a trader fundamentally changed me. I can now objectively observe world events, with realities often reflected in prices, not personal whims.
Every stock, every company, every asset, and every token has its life cycle. Our task is to determine whether a trading target is in or is about to enter an uptrend. That’s what truly matters. We may accept its historical growth, but will it continue to grow? This is the real question. You might speculate that electric cars or even Bitcoin have years of growth ahead. But since these judgments are so apparent, the returns aren’t incredibly high. The advantage of Altcoins is that out of 10,000 projects, most only have a growth cycle of a few hours, maybe one in a hundred lasts for weeks, and only a tiny fraction matures into long-term projects. This is where you truly test your industry knowledge and judgment. It forces you to constantly reflect on which projects have growth potential and value and to think about humanity’s evaluation of worth. Apart from utility, every surprising price surge implies a deepened understanding of diverse value cultures. Many indeed live merely to survive, while others continually disrupt.
In the end, trust yourself. Most companies, teams, and individuals are just winging it.
