What we think is happening and what actions wer taking now (July 9th 2021)
it’s been a wild few months for investors in the midst of all the madness that is the crypto market.
At decentralised portfolio we have seen our entire crypto portfolios 10x in value with some individual positions going almost 20x, but we’ve also seen some of those gains get wiped out over a very short period of time, (I hope you took our advice and sold enough to cover your initial capital when we did, and even took some profits too as we did, if you followed our advice, you should be up not down)
To say that crypto markets are volatile is an understatement, since the creation of bitcoin back in 2009 the entire blockchain industry has been the most volatile class of investments on the planet, (at least we don’t know of another industry with greater volatility)
With great volatility is the chance for outstanding gains as we’ve seen, and outstanding losses also, if you’ve followed our advice with buy up to prices, as and when we’ve written it, you will have done well, and at worst lost unrealized gains but not actual investment capital.
By that same standpoint on volatility, what we’re seeing is not unusual,
In cryptos short history there have been several bull markets and bear markets with equal or greater volatility than we’re seeing now, it can be hard to stomach such euphoric highs and gut wrenching lows, but if your able to keep a level head amongst the madness, profits can be like nothing you’ll find else where, even life changing sometimes. (The last nine months have been life changing for myself and my family).
The blockchain industry is still very young with some of the most rapid growth of any industry out there, the general position of the market in the long run is up, not down, the bull and bear markets are simply bumps along the way, simply a variance above and below the mean. (the mean can be looked at as the actual value, (which can be hard to quantify), and not the price tag, at any given time) the actual value is by grace of this being an emerging industry, constantly growing upward, while the actual price tags keep thrashing above and below the mean value.
For this reason alone, we look to establish ourselves as investors in the space and not as short term traders. We have no way of knowing from day to day what exactly is going to happen with the entire market or with individual projects and we don’t want to try and guess.
As we’ve all seen, all it takes is a bunch of news articles which are either perceived as being tremendously positive (the market goes up) or tremendously negative (the market goes down).
Often the crypto news is only partially based on fact, or even little to no facts at all, like Elon’s statement regarding the pollutive nature of bitcoin mining, when in reality, for the most part, large bitcoin mining farms, take advantage of surplus energy in the grid with little energy produced specifically to mine bitcoin, (in other words the energy would be produced regardless of the bitcoin mining farms using it and otherwise is wasted) compare this to Tesla’s footprint which is arguable a much worse contributor to dirty energy, (only that the point at which the pollution takes place is out of site, when you charge a Tesla at the plug, the energy your using is base load power mostly produced by coal and nuclear power stations).
To give another example of negative market manipulation, most viewed China’s ban and crackdown on bitcoin mining as being tremendously negative for bitcoin, but was it?
In reality its causing a somewhat temporary dip in bitcoin mining hashrate and market price tag, but in the long run, it could be very positive for bitcoin as it contributes to the decentralized nature of the bitcoin blockchain, a large percentage of bitcoin mining was in China, China pulled the plug, and bitcoin didn’t go away, we view this as massively positive for bitcoin and the entire decentralized blockchain ecosystem, as it proves the durability of bitcoin, its decentralised nature, its ability to adapt, and the difficulty authoritarian governments have in attempting to shut down any decentralized blockchain.
That being said, the crypto industry will continue to face massive scrutiny and bad news, slander, defamation and negative press from regulatory authorities, governments and central banking.
Why? Simply because these decentralized technologies are a threat to the current centralized system used for controlling the populous.
The big thinkers, governments and the like believe they know what’s best for us, and therefore think we should not have the option or choice to decide for ourselves what we think is best, we should be forced to use the central bank system which they can and do control.
Plain and simple, the entire blockchain industry will continue to be labeled as a scam, a place for money laundering and all sorts of fud that couldn’t be further from the truth.
The good news though is that while this happens, bull markets and bear markets will come and go as the entire blockchain industry continues to grow along with its mean value.
once the cats out the bag, there’s no putting it back in the bag so to speak.
Decentralized blockchain projects will continue to eat away at centralized industries profits and gain a bigger share of the market from banks and other industries, in terms of value and price tag. We don’t know what the eventual outcome will be, but we do know that this technology will revolutionize many things in our lives in the next few years and beyond, it won’t just go away, quite the opposite.
While we also don’t know how the market will react to whatever nonsense comes out in the news, we do know the market as a whole is on an upward trajectory as an emerging industry (or many emerging industries put together) and from a value perspective we like emerging industries and we want to take advantage when the general market is down, and the general sentiments negative, (partially using market caps as a guide) when market caps are on the low side, on projects that are still viable, we often have more upside in the long run and it’s often time to invest.
This bull market
We don’t think this bull market is over yet, but we could be wrong….as we said in our last update a few weeks ago, “the markets will either jump right back up or trade sideways for a while.
It looks like the crypto markets have been going sideways to us, we think they’ll continue to do so for a while, we need momentum to build up again.
it could be the bottom is almost in, or close to it, (in an emerging industry a bottom is often higher than the last one) which means the upwards trajectory could start again at some point soon, if it hasn’t already, we will all have to wait and see, even the news is showing signs of positivity again.
The last run up was great, but not as great as previous bull markets, we think maybe their will be a second run up at some point in the near future before the real bear market comes again, but we could be wrong on this too!
We took back our initial capital and some profits as close to the top of the last run up as we could, a week or two before the market turned downward back in late April and the beginning of May and we hope you did to when we published our update at that time.
Now that the market has generally been cut in half and appears to be either at its bottom or close to it, we want to take action to deploy our capital again and reposition ourselves as best we can.
The last six to nine months has been a great test to see which of our projects lived up to its promise and which didn’t, and also to see the emergence of two almost brand new sectors in the crypto space.
DeFi and NFT’s,
both of which have massive utility for use cases in the real world and huge potential for growth in the coming months and years, these are two very disruptive technologies and definitely deserve our attention as investors.
Decentralized finance (DeFi) has immense potential to disrupt every facet of conventional finance, we think in the future DeFi is a very real competitor to the conventional centralized financial system (especially banks, and the conventional nuts and bolts of finance, lending, borrowing, mortgages and so forth.
The reality is that DeFi puts the power back where it belongs in the hands of the customer, and takes it away from slow archaic greedy overpriced centralized financial institutions.
I for one, think that’s a great way forward and would much rather have the freedom to borrow or lend money directly on the blockchain using a smart contract than through the banking system.
I don’t think many realize how this industry could eventually take over conventional centralized banking and make it obsolete.
Keep in mind though, DeFi as an industry is very young (it’s an infant, barely even a baby at this point) and as such suffers from all sorts of technical shortcomings and problems which will take time to sort out, DeFi is no where near perfect yet and won’t be for a few years at least, but by the same standpoint it is reaching an infliction point, it’s just a matter of time before it takes over.
None fungible tokens (NFT’s) have almost unlimited applications in the real world, not just to represent somebodies artwork and to be of collectible value (although that’s also great if you like that sort of thing)
The NFT picture is so much larger than this, an NFT can be created to represent the unique ownership or verification of just about anything and everything, from domain names to IP addresses to real estate titles, insurance products, health records, graduate degrees, car ownership or anything else that requires proof of ownership or verification and depending on the application and protocols used can be transacted, verified and otherwise transferred instantly, just like DeFi, NFT’s as a technology have immense applications in the real world and will grow tremendously over the coming years.
For the next section of this write up we are taking a slightly different approach to our usual,
we are simply going to list the various projects we are personally investing in with very basic info, and leave the in depth details for you to discover in your own research, as always its up the reader to conduct their own research, we simply write about investments we’re excited about and are putting our own money into.
Our overall strategy for the remainder of this bull market (if we’re still in a bull market that is?!) is to capture as much Beta as we can and not worry about the Alpha as much, in a way, we aim to create our own mini ETF tracker style product in the space, by holding a basket of what we think are some of the best projects, with equal capital in each.
We think we will most likely outperform the market anyway despite not being concerned with the alpha.
If we are still in a bull market and If the remainder of this bull market is anything close to the madness of previous bull markets in crypto, we’re in for a wild ride and the best could be yet to come, but beware, as you’ve witnessed over the last months, when it’s time to sell, it may need to be done quickly, as usual we will do our best to let you know when we think that is, (if we can get it right ourselves that is!)
Before we get to our new projects;
While we’re not buying more Bitcoin, Ether, or Uniswap, we are happy with the progress of these projects and are holding tight to the remainder of our tokens in these projects for now.
We think that Zilliqa preformed well in terms of price tag, but going forward we don’t view it as having such a major place in the blockchain ecosystem as we did previously, largely because other more advanced projects have built out there networks which are arguably more advanced and useful than Zilliqa, which makes tighter competition for Zilliqa, so we are selling half of our remaining stake in Zilliqa and using the capital toward our new positions.
Some of the projects we are taking new positions in at the moment are listed below,
Solana is an open source project that banks on blockchain technology’s permission-less nature to provide decentralized finance DeFi solutions. The Solana protocol is designed to facilitate decentralized app (DApp creation). It aims to improve scalability by introducing a proof-of-history (PoH) consensus combined with the underlying proof-of-stake (PoS consensus of the blockchain, which makes for very quick execution times, with the hybrid consensus model. Solana is getting interest from small-time traders and institutional traders alike, the solana network seems to work well for NFT creators as well, essentially we think solana has great utility going forward and in someways similar to etherium but more advanced.
Binance Smart Chain (BSC) is a proof of stake blockchain network built for running smart contract-based applications.
BSC smart contracts are Ethereum-compatible, developers can create or migrate DApps, tools and other ecosystem components such as NFT markets to the BSC network without much friction.
BSC runs in parallel with Binance Chain (BC), which allows users to get the high transaction capacity of BC and the smart contract functionality of BSC.
BSC implements the Ethereum virtual machine which allows it to run Ethereum-based applications like Metamask. allows digital assets cross-chain functionality with low latency and large capacity.
BC and BSC can freely communicate with each other without friction, despite BSC not being a layer two solution, (as it is an independent blockchain, parallel to Binance Chain). This makes it seamless for users to move their cryptocurrencies between BC and BSC both are represented by the BNB token.
Polygon is a platform for Ethereum scaling and infrastructure development. Its core component is Polygon SDK, a framework that supports building multiple types of applications as a Layer 2 scaling solution and seeks to stimulate mass adoption of cryptocurrencies by resolving problems of scalability on many blockchains, Polygon combines Plasma Framework and the proof-of-stake blockchain architecture. Using Polygon, one can create optimistic rollup chains, ZK rollup chains, stand alone chains and other types of infrastructure developments.
Polkadot is an open-source sharding multichain protocol that facilitates cross-chain transfer of data and assets, including tokens, making a range of blockchains interoperable with each other.
This interoperability seeks to establish a fully decentralized and private web, controlled by its users, and simplify the creation of new applications, institutions and services.
The Polkadot protocol connects public and private chains, permissionless networks, oracles and future technologies, allowing these independent blockchains to trustlessly share information and transactions through the Polkadot relay chain.
Polkadot has four core components:
● Relay Chain: helps to create consensus, interoperability and shared security across the network of different chains;
● Parachains: independent chains that can have their own tokens and be optimized for specific use cases;
● Parathread: similar to parachains but with flexible connectivity based on an economical pay-as-you-go model;
● Bridges: allows parachains and parathreads to connect and communicate with external blockchains like Ethereum.
Aave’s open-source protocol is built on Ethereum,
Aave is also a DeFi protocol that allows people to lend and borrow crypto. Lenders earn interest by depositing digital assets into specially created liquidity pools. Borrowers can then use their crypto as collateral to take out a flash loan using this liquidity. AAVE provides holders with discounted fees on the platform, and it also serves as a governance token — giving owners a say in the future development of the protocol.
Compound is a DeFi lending protocol that allows users to earn interest on their cryptocurrencies by depositing them into one of several pools supported by the platform.
Compound looks to take advantage of idle crypto capital sitting in wallets doing nothing with its open lending platform, which allows anybody who deposits supported Ethereum tokens to easily earn interest on their balance or take out a secured loan. Holders of the COMP token can also propose changes to the protocol,
1inch is a decentralized exchange (DEX aggregator, connecting several DEXes into one platform to allow its users to find the most efficient swapping routes across all platforms. In order for a user to find the best price for a swap, they need to look at every exchange — DEX aggregators eliminate the need for manually checking, bringing efficiency to swapping on DEXs.
DEX aggregators work by sourcing liquidity from different DExs, meaning that they are able to offer users better token swap rates than they could find on any single DEX, in the shortest time possible.
(Ok the names a bit lame!….but)
PancakeSwap is an automated market maker (AMM) — a decentralized finance (DeFi) application that allows users to exchange tokens, providing liquidity via farming and earning fees in return.
PancakeSwap is used for swapping BEP20 tokens on Binance Smart Chain. PancakeSwap uses an automated market maker model, meaning that there are no order books and liquidity pools are used instead. A user can earn income by becoming a liquidity provide; by adding their tokens to the liquidity pool they can farm LP tokens and stake their CAKE to earn rewards.
Theta (THETA) is a blockchain for video streaming, data delivery, edge computing, and decentralized applications (DApps) especially NFT’s built on its EVM-compatible Smart contract platform.
Theta is a open source, decentralized network in which users share bandwidth and computing resources on a peer-to-peer (P2P) basis.
Handshake is a decentralized permissionless system in the NFT industry, that is intended to incentivise a distributed network of computers to operate a system for domain name ownership.
Under Handshake, every peer is tasked with validating and managing the root DNS naming zone, with the objective of providing an alternative to current certificate authorities and naming systems.
Different participants across the internet such as social networking handles and domains rely on a centralized approach. This means the systems depend on a system of honesty — and are still prone to cyber attacks and fraud.
Handshake aims to eradicate this problem by creating a decentralized internet that relies on a peer-to-peer system.
The Handshake naming protocol differs from its predecessors in that it has no concept of namespacing or subdomains at the consensus layer. “Its role is not to replace all of DNS, but to replace the root zone file and the root servers.”
A key concept about Handshake is that it aims to decentralize or reduce dependence on the Internet Corporation for Assigned Names and Numbers (ICANN.)
ICANN was launched in 1998 as a non-profit partnership made of people across the globe, with the aim of keeping the internet more secure.
Handshake instead aims to use a decentralized application based on Proof-of-Work principles to improve the security of the internet. Handshake is basically the DNS for blockchain based domains.
Enjin provides an ecosystem of interconnected, blockchain-based gaming products. Including the Enjin Network, a social gaming platform through which users can create websites and clans, chat, and host virtual item stores.
Enjin allows game developers to tokenize in-game items on the Ethereum blockchain. It uses Enjin Coin, an ERC-20 token, to back the digital assets issued using its platform, meaning that items can be bought, sold and traded with real-world value.
Enjin Coin (ENJ) is a digital store of value used to back the value of blockchain assets like non-fungible tokens (NFTs).
Every asset minted with the Enjin Platform contains ENJ, a minting resource which is locked inside NFTs and removed from circulation. Minting blockchain assets with ENJ provides a variety of benefits to creators and users:
● Infuses them with a reserve value
● Ensures their transparency and scarcity
● Gives them instance liquidity
● Provides utility in games and apps
● Anti-inflationary
● Enjin’s “melting” functionality allows users to destroy their blockchain assets at any time to retrieve the ENJ value from within.
The Enjin blockchain ecosystem aims to offer software products that make it easy for everyone to develop, trade, monetize, and market with blockchain.
Flow is a fast, decentralized, developer-friendly blockchain, designed as the foundation for a new generation of games, apps, and the digital assets that power them. Flow ecosystem partners include global IP brands like Warner Music, Ubisoft, NBA and UFC, Flow is positioned well to benefit from the growing NFT market,
Origin Protocol is a network that allows market participants to share goods and services through peer-to-peer (P2P) networks. The platform aims to create an extensive online marketplace leveraging the Ethereum (ETH blockchain and Interplanetary File System (IPFS) in order to eliminate the need for middlemen.
The protocol allows for the creation of a decentralized setting where both buyers and sellers can connect, check for available listings, write reviews and perform many other actions. With this, fractional usage of assets can be traded more easily.
Monero allows transactions to take place privately and with anonymity, which is something that will be needed more and more in the future, monero (XMR) is designed to obscure senders and recipients alike through the use of advanced cryptography. Obfuscation is achieved through the use of ring signatures, stealth addresses,
transaction broadcast propagation to obscure the IP address of the device producing a transaction and bulletproofs, a non interactive zero knowledge proof (NIZKP) protocol.
If your concerned about privacy, it doesn’t get better than monero.
Let’s wrap up this up here, always available to answer questions and comments and for more in depth one on one consultations as needed.
All that being said, take your time and review the projects that stand out to you in your own time.
In terms of buy up to prices for each, most are down 50%-60% from their last all time highs. We’re repositioning now and over the next few weeks, we’d recommend using a guide buy up to price of at least a 40% discount from any given projects last all time high.
We will also be staking our positions as much as possible to earn on our tokens while we sit tight.
Final few words for now…..
We don’t think we should ever put all our eggs in one basket, and while we’d like to believe the likes of Michael sailor and other folks who borrow money and buy bitcoin and other market products using leverage. To us, it’s just not worth the risk, so we don’t do it and wouldn’t advice any of our subscribers to either, never invest more than you can afford to lose, and honestly, haven’t the gains from the last run up been good enough?
Happy hunting
Francis Holmes
July 9th 2021
