Giving 100 years before the mast
Giving 100 years before the mast
Want to invest in crypto assets on a user-friendly app without taking care of your wallet and security? Let’s use the path of least friction, Coinbase.
Go to Coinbase or download the mobile application.
Create an account and verify your identity.
Do not buy any assets directly with your debit card; opt for a direct GBP deposit that utilises the UK’s Faster Payments System (FPS) to save on fees.
Use Coinbase’s ‘Advanced Trade’ interface to trade between GBP and any Coinbase-supported asset, such as Ethereum (ETH).
You can generate yield on various assets without leaving the Coinbase ecosystem through Coinbase Earn, for example, over 5.00% APY on Cosmos (ATOM).
Finally, speculating on NFTs is possible without leaving the Coinbase ecosystem via the latest edition of Coinbase NFT, which conveniently aggregates listings from various decentralised marketplaces in one place.
And that’s it. To be a lazy speculator in Web3, this is what I recommend as you do not have to worry about the security of managing your funds and limiting your exposure to scams or unaudited projects. You can build a portfolio of assets and probably fall into religiously checking its performance every 3 minutes.
You’ve levelled up and want to dive on-chain and expose yourself to the actual, decentralised nature of Web3 and have access to the whole ecosystem at your fingertips, from yield-generating DeFi protocols to decentralised derivates & NFT marketplaces. Now, whilst the most significant rewards await on-chain, it comes with the highest associated risks. So let’s get set up.
We will create two wallets to have the best setup to start your journey on Ethereum & beyond.
Software-based wallet linked by a provided seed phrase.
No hardware is required to confirm tranHelpfulns on-chain.
Helpful to engage with protocols, NFT mints, short-term trading and general activities that may have a higher risk profile.
Never holds more funds than we’re willing to lose.
Download MetaMask as a browser extension & mobile application.
Store the seed phrase that you are provided safely, and this is the key to your funds. If you lose it, then you lose access to your funds. Do not share this phrase with anyone.
You will have an address associated with your wallet beginning with ‘0x’. You can fund your wallet by sending ETH & ERC20 assets to this address via an exchange such as Coinbase.
Additional reading: What is an ERC20 Token?
Physical hardware wallet must be interacted with to confirm transactions on-chain, making it far more secure to store larger amounts of crypto assets you plan to hold for extended periods.
Minimised interaction with higher risk activities, mainly used as a ‘vault’ that the software wallet sends tokens to for storage or interacting with heavily audited DeFi & NFT protocols such as Aave & Opensea.
Purchase a Ledger hardware wallet; I recommend the Nano X or the Nano S Plus.
Download Ledger Live on both desktop & mobile applications, plug your hardware wallet in and run through the Ledger setup.
Just like the software wallet, store your provided seed phrase securely for all the same reasons.
Unlike the software wallet, Ledger supports an array of crypto assets in addition to Ethereum, such as Bitcoin, Avalanche, Cosmos & Solana. You can download the required ‘apps’ to do so straight from Ledger Live.
Now we have your wallets set up. We are ready to trade actively, invest, mint, lend, borrow, stake and everything in between on-chain to capitalise on all the opportunities Web3 has to offer whilst learning along the way. So let’s go and connect to some dapps.
In a bull market, DeFi yields on stablecoins amongst other assets are unrivalled as asset borrowing ramps up exponentially in the ecosystem by speculators. Those who know how to take advantage of this can put even their risk-off assets to work and earn traditional risk-on returns.
Lend your assets out to earn a yield on your ETH & ERC20 assets (low risk)
Borrow against your deposits to effectively leverage your portfolio (high risk)
Recommendations: Aave & Compound
Generative Art Collections — most notable examples being Crypto Punks & Bored Ape Yacht Club). When buying and selling collection pieces, use marketplace aggregators as they source listings for you, ensuring you can see the full scope of what’s available across the likes of OpenSea, Looks Rare, and SudoSwap. In the case of my recommendation Gem, they are building analytical tools natively in the dapp to demystify rarity at a glance, perhaps giving you a more informed decision on your buy or sell.
Recommendations: Gem
Music NFTs are like your usual NFTs, except they’re specific to the music industry and often audio tracks. Music NFTs essentially are certificates of ownership and can take the form of albums, singles, digital artwork, gig tickets, and exclusive footage from performances. The NFTs themselves may even capture a share of track royalties. This niche within the NFT ecosystem is still in its infancy, though early stories of music artists leveraging web3 are promising.
*Recommendations: Catalog, Async, Opensea*
1/1 NFTs — interested in acquiring unique art? A one-of-one is an NFT that has been issued as a single, unique edition giving the impression of increased rarity due to only having one owner at any given time. Whilst these NFTs are most prominently seen in the most prominent marketplaces, such as OpenSea, there are some more curated applications to distribute this niche.
Recommendations: SuperRare, Foundation, Opensea
Have you been browsing CoinGecko and found a diamond in the rough? A largely unearthed token only available on decentralised exchanges, inaccessible to those only using centralised platforms such as Coinbase or Binance. Time to start swapping tokens on-chain.
There are various individual decentralised exchanges, most notably Uniswap; however, liquidity can be largely fragmented for tokens across DeFi and generally, it is recommended to use DEX aggregators, which on the surface, operate the same way; however, under the surface, they are retrieving quotes from various liquidity sources and constructing the most optimal route, so you get the highest output possible.
Recommendations: Matcha & 1inch
Additional Reading: How does an AMM work?
Are you interested in using more exotic products to take your trading & investing to the next level? Such tools come with increased risk, but in the right hands and using proper risk management can be very useful. The use of crypto futures & options products allows for advanced strategies in basis trading, hedging, spread trading & simply leverage.
Perpetual Contracts Trading Recommendation: dYdX & GMX
For perpetual contracts trading, dYdX offers a feature-rich experience with highly liquid markets on desktop and mobile. I have used dYdX extensively since launch, and right now, there is no competitor close to its UX/UI. However, this experience comes at the cost of true decentralisation (for now) — for those looking for a more decentralised, highly liquid option that is more limited on features, GMX on Arbitrum is the one.
*Options Recommendations: Dopex & Ribbon
Options are fantastic products to speculate on assets, but by themselves are advanced instruments with all sorts of greek words hitting you hard and fast. However, there are two notable projects that I can recommend, Dopex & Ribbon, that have done an outstanding job at abstracting the complexity of Options trading through intuitive interfaces or structured products that run popular strategies on your behalf for a fee.
Additional Reading: What are perpetual contracts? & Beginners guide to DeFi Options
When the market gets heated, Ethereum can get congested due to the high demand for block space, ultimately leading to higher fees on every transaction you execute. However, layer two networks have been in development for years and are in production to offer significantly faster and cheaper experiences alongside the majority of blue-chip protocols. Exploring these newer ecosystems can prove lucrative as layer two native projects start to emerge and launch tokens & NFTs.
Layer 2 Recommendations: Arbitrum & Optimism
Additional Reading: What are Optimistic Rollups?
Now you’re going to need to move some assets, likely ETH, to be able to trade and interact with these new networks. To do this, you need to use a network bridge; we’ll save the details of how these exactly work for now, but I can recommend using Hop to give you the best combination of ease and speed.
Bridge Recommendation: Hop
Suppose you have the financial means and want to dive deeper into becoming a contributor to the security and integrity of the Ethereum network. In that case, you can stake your ETH and become a validator of the network, earning continuous rewards denominated in ETH as an income stream. There are two main ways to accomplish this, with trade-offs outlined below.
Solo Home Staking — Gold Standard
Complete control over your keys, node operation & maintenance — the most trustless option available.
The most lucrative option as you are entitled to 100% of your rewards earned for the duration.
Limited by the need (currently) for 32 ETH to be staked and the technical knowledge and equipment to run the node 24/7. A high barrier to entry for many.
Want to dive into solo staking? Ethereum.org/staking/solo
Low barrier to entry compared to solo staking, with the ability to stake any amount of ETH and earn proportional rewards.
Simple, popular option as the technical knowledge and node operation is entirely abstracted from you.
The luxury of convenience comes with fees out of your earned rewards, though this, for the vast majority of people, is a worthwhile trade, especially at scale.
Pooled staking recommendations: Rocket Pool, Stakewise & Lido (compare rates)
You may have noticed that the public wallet address’ on Ethereum all start with 0x before running into a spaghetti of long combinations that you can have to copy, paste & check every time you send a transaction from address A to B. Not ideal or very intuitive.
Now, what if, when a friend wants to send you some ETH or an NFT, instead of sending them that long public address, you can send them something like, ‘theflyingdutchman.eth’ that they can use and be sure they haven’t fat-fingered an extra digit in there somewhere.
ENS allows you to register a unique .eth domain to achieve that and is widely adopted across most dapps & wallets available today.
Search for your future ENS domain here.
Bookmark the following websites, the majority being free, as they will help you extract the information you need to make informed decisions when navigating the thousands of tokens that make up the crypto economy.
Block Explorer — Etherscan (Optimism, Arbitrum)
Discovery — CoinGecko & CoinMarketCap
Charting — TradingView & Dex Screener
Analytics — Dune, Flip, Nansen & Glassnode
Portfolio Tracker — Zapper & DeBank
Communities — Discord
Let me know below, especially if there is anything you would like to be covered as a single topic in further depth, such as on-chain derivatives, trading & investing tools or staking setups.
Twitter — twitter.com/andrew_eth
Lens— @DAVYJONES.LENS
Discord — Davy Jones#0001
Want to invest in crypto assets on a user-friendly app without taking care of your wallet and security? Let’s use the path of least friction, Coinbase.
Go to Coinbase or download the mobile application.
Create an account and verify your identity.
Do not buy any assets directly with your debit card; opt for a direct GBP deposit that utilises the UK’s Faster Payments System (FPS) to save on fees.
Use Coinbase’s ‘Advanced Trade’ interface to trade between GBP and any Coinbase-supported asset, such as Ethereum (ETH).
You can generate yield on various assets without leaving the Coinbase ecosystem through Coinbase Earn, for example, over 5.00% APY on Cosmos (ATOM).
Finally, speculating on NFTs is possible without leaving the Coinbase ecosystem via the latest edition of Coinbase NFT, which conveniently aggregates listings from various decentralised marketplaces in one place.
And that’s it. To be a lazy speculator in Web3, this is what I recommend as you do not have to worry about the security of managing your funds and limiting your exposure to scams or unaudited projects. You can build a portfolio of assets and probably fall into religiously checking its performance every 3 minutes.
You’ve levelled up and want to dive on-chain and expose yourself to the actual, decentralised nature of Web3 and have access to the whole ecosystem at your fingertips, from yield-generating DeFi protocols to decentralised derivates & NFT marketplaces. Now, whilst the most significant rewards await on-chain, it comes with the highest associated risks. So let’s get set up.
We will create two wallets to have the best setup to start your journey on Ethereum & beyond.
Software-based wallet linked by a provided seed phrase.
No hardware is required to confirm tranHelpfulns on-chain.
Helpful to engage with protocols, NFT mints, short-term trading and general activities that may have a higher risk profile.
Never holds more funds than we’re willing to lose.
Download MetaMask as a browser extension & mobile application.
Store the seed phrase that you are provided safely, and this is the key to your funds. If you lose it, then you lose access to your funds. Do not share this phrase with anyone.
You will have an address associated with your wallet beginning with ‘0x’. You can fund your wallet by sending ETH & ERC20 assets to this address via an exchange such as Coinbase.
Additional reading: What is an ERC20 Token?
Physical hardware wallet must be interacted with to confirm transactions on-chain, making it far more secure to store larger amounts of crypto assets you plan to hold for extended periods.
Minimised interaction with higher risk activities, mainly used as a ‘vault’ that the software wallet sends tokens to for storage or interacting with heavily audited DeFi & NFT protocols such as Aave & Opensea.
Purchase a Ledger hardware wallet; I recommend the Nano X or the Nano S Plus.
Download Ledger Live on both desktop & mobile applications, plug your hardware wallet in and run through the Ledger setup.
Just like the software wallet, store your provided seed phrase securely for all the same reasons.
Unlike the software wallet, Ledger supports an array of crypto assets in addition to Ethereum, such as Bitcoin, Avalanche, Cosmos & Solana. You can download the required ‘apps’ to do so straight from Ledger Live.
Now we have your wallets set up. We are ready to trade actively, invest, mint, lend, borrow, stake and everything in between on-chain to capitalise on all the opportunities Web3 has to offer whilst learning along the way. So let’s go and connect to some dapps.
In a bull market, DeFi yields on stablecoins amongst other assets are unrivalled as asset borrowing ramps up exponentially in the ecosystem by speculators. Those who know how to take advantage of this can put even their risk-off assets to work and earn traditional risk-on returns.
Lend your assets out to earn a yield on your ETH & ERC20 assets (low risk)
Borrow against your deposits to effectively leverage your portfolio (high risk)
Recommendations: Aave & Compound
Generative Art Collections — most notable examples being Crypto Punks & Bored Ape Yacht Club). When buying and selling collection pieces, use marketplace aggregators as they source listings for you, ensuring you can see the full scope of what’s available across the likes of OpenSea, Looks Rare, and SudoSwap. In the case of my recommendation Gem, they are building analytical tools natively in the dapp to demystify rarity at a glance, perhaps giving you a more informed decision on your buy or sell.
Recommendations: Gem
Music NFTs are like your usual NFTs, except they’re specific to the music industry and often audio tracks. Music NFTs essentially are certificates of ownership and can take the form of albums, singles, digital artwork, gig tickets, and exclusive footage from performances. The NFTs themselves may even capture a share of track royalties. This niche within the NFT ecosystem is still in its infancy, though early stories of music artists leveraging web3 are promising.
*Recommendations: Catalog, Async, Opensea*
1/1 NFTs — interested in acquiring unique art? A one-of-one is an NFT that has been issued as a single, unique edition giving the impression of increased rarity due to only having one owner at any given time. Whilst these NFTs are most prominently seen in the most prominent marketplaces, such as OpenSea, there are some more curated applications to distribute this niche.
Recommendations: SuperRare, Foundation, Opensea
Have you been browsing CoinGecko and found a diamond in the rough? A largely unearthed token only available on decentralised exchanges, inaccessible to those only using centralised platforms such as Coinbase or Binance. Time to start swapping tokens on-chain.
There are various individual decentralised exchanges, most notably Uniswap; however, liquidity can be largely fragmented for tokens across DeFi and generally, it is recommended to use DEX aggregators, which on the surface, operate the same way; however, under the surface, they are retrieving quotes from various liquidity sources and constructing the most optimal route, so you get the highest output possible.
Recommendations: Matcha & 1inch
Additional Reading: How does an AMM work?
Are you interested in using more exotic products to take your trading & investing to the next level? Such tools come with increased risk, but in the right hands and using proper risk management can be very useful. The use of crypto futures & options products allows for advanced strategies in basis trading, hedging, spread trading & simply leverage.
Perpetual Contracts Trading Recommendation: dYdX & GMX
For perpetual contracts trading, dYdX offers a feature-rich experience with highly liquid markets on desktop and mobile. I have used dYdX extensively since launch, and right now, there is no competitor close to its UX/UI. However, this experience comes at the cost of true decentralisation (for now) — for those looking for a more decentralised, highly liquid option that is more limited on features, GMX on Arbitrum is the one.
*Options Recommendations: Dopex & Ribbon
Options are fantastic products to speculate on assets, but by themselves are advanced instruments with all sorts of greek words hitting you hard and fast. However, there are two notable projects that I can recommend, Dopex & Ribbon, that have done an outstanding job at abstracting the complexity of Options trading through intuitive interfaces or structured products that run popular strategies on your behalf for a fee.
Additional Reading: What are perpetual contracts? & Beginners guide to DeFi Options
When the market gets heated, Ethereum can get congested due to the high demand for block space, ultimately leading to higher fees on every transaction you execute. However, layer two networks have been in development for years and are in production to offer significantly faster and cheaper experiences alongside the majority of blue-chip protocols. Exploring these newer ecosystems can prove lucrative as layer two native projects start to emerge and launch tokens & NFTs.
Layer 2 Recommendations: Arbitrum & Optimism
Additional Reading: What are Optimistic Rollups?
Now you’re going to need to move some assets, likely ETH, to be able to trade and interact with these new networks. To do this, you need to use a network bridge; we’ll save the details of how these exactly work for now, but I can recommend using Hop to give you the best combination of ease and speed.
Bridge Recommendation: Hop
Suppose you have the financial means and want to dive deeper into becoming a contributor to the security and integrity of the Ethereum network. In that case, you can stake your ETH and become a validator of the network, earning continuous rewards denominated in ETH as an income stream. There are two main ways to accomplish this, with trade-offs outlined below.
Solo Home Staking — Gold Standard
Complete control over your keys, node operation & maintenance — the most trustless option available.
The most lucrative option as you are entitled to 100% of your rewards earned for the duration.
Limited by the need (currently) for 32 ETH to be staked and the technical knowledge and equipment to run the node 24/7. A high barrier to entry for many.
Want to dive into solo staking? Ethereum.org/staking/solo
Low barrier to entry compared to solo staking, with the ability to stake any amount of ETH and earn proportional rewards.
Simple, popular option as the technical knowledge and node operation is entirely abstracted from you.
The luxury of convenience comes with fees out of your earned rewards, though this, for the vast majority of people, is a worthwhile trade, especially at scale.
Pooled staking recommendations: Rocket Pool, Stakewise & Lido (compare rates)
You may have noticed that the public wallet address’ on Ethereum all start with 0x before running into a spaghetti of long combinations that you can have to copy, paste & check every time you send a transaction from address A to B. Not ideal or very intuitive.
Now, what if, when a friend wants to send you some ETH or an NFT, instead of sending them that long public address, you can send them something like, ‘theflyingdutchman.eth’ that they can use and be sure they haven’t fat-fingered an extra digit in there somewhere.
ENS allows you to register a unique .eth domain to achieve that and is widely adopted across most dapps & wallets available today.
Search for your future ENS domain here.
Bookmark the following websites, the majority being free, as they will help you extract the information you need to make informed decisions when navigating the thousands of tokens that make up the crypto economy.
Block Explorer — Etherscan (Optimism, Arbitrum)
Discovery — CoinGecko & CoinMarketCap
Charting — TradingView & Dex Screener
Analytics — Dune, Flip, Nansen & Glassnode
Portfolio Tracker — Zapper & DeBank
Communities — Discord
Let me know below, especially if there is anything you would like to be covered as a single topic in further depth, such as on-chain derivatives, trading & investing tools or staking setups.
Twitter — twitter.com/andrew_eth
Lens— @DAVYJONES.LENS
Discord — Davy Jones#0001
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