Shout out to our rockstar research team and thank you to the hundreds of founders, developers, institutions, miners, activists, and analysts we met throughout the year. We couldn’t write this report without you!

2021 was nothing short of an eventful year, most importantly marked by defining moments accelerating the pace of innovation and adoption in the crypto industry. While 2020 was labeled as the year of institutional and corporate engagement and the dawn of DeFi, this year, the unprecedented interest in crypto onboarded a whole new wave of entrepreneurs and investors never seen before. Many leapfrogged Bitcoin and even Ethereum to build and use the first generation of Web 3 applications.

One of the major challenges of this report is turning it into a coherent story summarizing the year and heading it towards the future. If we had to define the year 2021, it will be labeled by the following patterns:

In February, Tesla took the whole community by surprise by revealing on its annual SEC 10-K Form it had invested $1.5 billion in Bitcoin. The news drove to the largest candle in Bitcoin history of $8,871, with the price rising from $38,058 to $46,929 — almost 10 years after Bitcoin traded for the first time over $1 on February 9, 2011.

On the same day, the Federal Reserve of St Louis published a paper on Decentralized Finance stating that DeFi may potentially contribute to a more robust and transparent financial infrastructure. In the same vein and quite in a novel way, Miami was considering giving city employees the opportunity to get their salaries paid in bitcoin alongside paying their local fees and taxes.

In March, on the institutional front, banks started to provide exposure to this asset class through private placements. Morgan Stanley announced to exclusively offer access to bitcoin-related funds to its wealth management clients. Morgan Stanley’s wealth management unit manages nearly $4 trillion in client assets across more than 16,000 advisors. They effectively became the first major US bank to offer bitcoin exposure, capping investments to as much as 2.5% of total net worth per client. As the demand for Bitcoin investments has significantly surged in the second half of 2020, the bank considered the asset class as inevitably investable according to an internal investor note. Due to the lack of a spot Bitcoin ETF in the United States, Morgan Stanley exposed its clients to three bitcoin funds, two of the funds on offer are from Galaxy Digital, while the third is a joint effort from asset manager FS Investments and NYDIG.

In April, the most significant catalyst of the cryptoasset market for Q2 2021 was Coinbase’s direct listing on Wednesday 14 April 2021. The listing saw the company initially go public at more than a $100B valuation. Coinbase’s listing represented a milestone in the increasing legitimacy of the cryptoasset industry as it fostered traditional finance to pay more attention to the lucrative business models facilitated by Bitcoin and blockchain technology. A direct listing mechanism was used by Coinbase, where the company did not issue new shares but rather investors and employees were free to sell their own shares on the market with no lockup, (ticker: COIN). Some of the largest initial providers of liquidity for Coinbase shares were leading investment funds such as Paradigm and USV, as well as Coinbase’s executive team.

There were three medium-term implications of the outcome of the direct listing: (1) the new wealth enjoyed by Coinbase employees and investors could potentially flow back into the crypto market; (2) the crash in the cryptoasset market following the listing shows that there was significant overleveraging by traders on the first day “Pop”; (3) Coinbase’s direct listing will likely be a forebearer of many other crypto-businesses going public in 2022.

Institutional engagement and price expectations led the market to become overleveraged and trigger several corrections, especially throughout Q1 and Q2. The crypto industry had a historic first quarter in terms of spot trading volume. The monthly spot volume across crypto exchanges was over $1 trillion in both February and March, and slightly less in January, around $977 billion. According to Coinbase’s Q1 earnings, $112 billion or about 54% of the assets invested on the exchange come from professional investors more likely to trade via their OTC desk such as Ruffer Investment for its $745 million investment in Bitcoin. The aggregated open interest of Bitcoin futures grew by more than 187% from the start of the year to reach an all-time high of $27.29 billion on the day of Coinbase public listing. The bitcoin futures market is the largest segment in the industry and processed at least $1.5 trillion in volume in the same period. Following the Coinbase direct listing, the wider crypto market experienced a deleveraging-driven downturn.

Last words on Bitcoin:

At Amun, we believe we are still in the embryonic stage before reaching widespread adoption of Bitcoin in El Salvador. It will take more time than expected as the country relies on a heavy cash economy, with only 58% of Salvadorians having access to the Internet, akin to the Internet penetration figure of the US in 2002. In addition, Bitcoin best serves as a long-term store of value rather than a daily payment method. Hence, we anticipate Salvadorians to adopt Bitcoin predominantly for the former use case.

The institutional adoption of Ethereum was underestimated and started to emerge at the end of Q4 2020. At Amun, we witnessed the early innings of institutional engagement beyond Bitcoin with Ethereum and identified the sharp rise in the number of wallets with at least 10K ETH (~$33 million). Conversely, smaller wallets holding between 10 and 1K ETH significantly decreased as market participants took profits to use the plethora of applications built on Ethereum. Professional investors realized the value brought forth by Ethereum as the most dominant settlement layer processing over 1 million transactions daily and as the most vibrant and engaged developer platform.

Rothschild Investment Corporation invested over $4 million in Ether, while the European Union’s investment arm, the European Investment Bank, issued bond tokens on Ethereum by raising 100 million euros.

Hedge fund giants, Millennium, Matrix, and Point72 dipped their toes in the decentralized finance (DeFi) sector by setting up crypto funds

In May, for the first time in history, Ethereum crossed the $400 billion mark in market cap, valued at over $3.5K or circa 2.7 times its previous all-time high price reached in mid-January 2018 around $1.3K. The fundamental adoption of Ethereum is real and numbers speak for themselves with a +2,000% increase YoY in transaction volume on the Ethereum network and a 7,000% rise in investments in decentralized financial applications.

Another reason for this spectacular rise for Ethereum was likely the looming switch to Proof of Stake potentially happening sometime in Q1 2022, which by design consumes less energy than Proof of Work systems like Bitcoin. In fact, outside inflation concerns, ESG, and climate risks were dominant topics amongst asset managers as indicated by BlackRock. As such, the growing narrative of Ethereum as an ESG-compliant cryptoasset was en vogue, defining Ethereum as the energy asset to fuel the Ethereum economy composed mainly of crypto-native financial services (DeFi) and digital media, art, music, and games (NFTs).

On May 21st, the State Council of the People’s Republic of China, the executive governing body of China, issued a statement on financial stability, which included a crackdown on Bitcoin mining and trading activities. The crypto market sentiment turned bearish again due to increased uncertainty in China, exacerbating the previous week’s selling pressure as Tesla stopped Bitcoin payments due to environmental concerns.

Bitcoin fell by 8% within an hour as market participants based in China anticipated tougher restrictions. In anticipation of a liquidity crisis in the Chinese market, the selling pressure continued of which 80% predominantly came from short-term traders who purchased Bitcoin over the past 6 months at that time. Crypto holdings were converted to USD-pegged stablecoins such as Tether and USDC, which reached new highs in market value, USDC broke the $20 billion mark in market capitalization for the first time in history.

Volatility spiked across assets. DVOL (the Deribit Implied Volatility Index) serving as a great volatility indicator or the fear gauge, unexpectedly soared. DVOL is the VIX of the bitcoin market that measures implied or expected volatility based on Bitcoin’s options traded on Deribit, the largest options exchange. This panic selling also affected the long tail of cryptoassets, most of which dropped by more than 50% from their respective all-time high and hence wiped out hundreds of billions of dollars in total market value.

The Bitcoin market experienced a significant sell-off, which accounted for $2.56 billion in net losses for traders, surpassing the most notable deleveraging events such as in March 2020 ($1.38 billion) and during the last bear market in 2018 ($0.95 billion). The silver lining is that this year’s liquidity has been by an order of magnitude deeper than in 2020. As such, the bitcoin market absorbed that week’s sell-off much better than in previous years.

The restrictions from China have also manifested signs of a disrupted network. On June 30, our Research team discovered that at some point, a set of transactions on the bitcoin blockchain took almost an hour to settle. It generally takes 10 minutes for settlements to occur, but the crackdown on Bitcoin mining pushed miners to shut down operations. It was reported that the majority, 90%, of Chinese miners went offline to comply with government orders. The hash rate decreased to levels not seen since June 2020, effectively the sharpest drop in computing power in Bitcoin history.

At Amun, we anticipated this adjustment to make mining more accessible to the least competitive miners until the remainder of miners got back online. Namely, in July, the mining difficulty was back to levels where the price of Bitcoin was traded at $9K. To put things in perspective, a year ago when Bitcoin traded below the $10K mark, the total miner revenue represented $9M. Conversely, in July this year, the total miner revenue was three times as much as the total revenue in 2020, accounting for more than $29M. Fast forward to the end of 2021, the hash rate effectively increased in tandem with difficulty and is approaching full recovery.

As our research team predicted in 2020, Bitcoin mining has been experiencing a China exodus and gradual shift to North America. In line with our prediction, a few months after the crackdown, the University of Cambridge’s Centre for Alternative Finance released the 2021 Bitcoin mining map indicating that the US is now the leading Bitcoin mining centre with at least 30% of the market share.

In hindsight, we’ll look back at this correction and situation in China as one of many defining moments proving the robustness of the Bitcoin network. Today, it would cost over $1.6 billion to reverse the state of Bitcoin transactions for an hour. The decentralized nature of bitcoin is a crucial feature to keep the network running. No other payment services more centralized by nature could function amid a crackdown. This is a positive light for the future of Bitcoin in times of crisis.

The China crackdown was a double-edged sword. On the one hand, it slowed down bitcoin’s engagement and transpired into Bitcoin’s Sortino ratio. Despite a 68.28% YTD performance vs 29.45% for SPY, Bitcoin had a lower 1-year Sortino ratio (2.81) than the S&P 500 (3.10). On the other hand, the China ban was the biggest promotion for DeFi.

In September, the regulatory treatment of cryptoassets became a lot more specific and precise than before in China. The PBoC issued a circular stating that cryptocurrency-related transactions and venues are deemed illegal activities in mainland China while overseas crypto services are prohibited from serving China-based users.

Crypto exchanges and other services took drastic measures:

Mining pool service, StarkPool announced the shut down of its operations

Crypto exchanges, Binance and Huobi will prohibit access to Chinese users

E-commerce giant, Alibaba, banned the sale of crypto mining machines on its site.

At Amun, we are expecting more crypto services to prohibit access to Chinese users in the coming year. Crypto exchanges will undoubtedly remove China from their geographic range of services. The list of blacklisted locations is usually composed of North Korea, Iran, and even the United States — in a discovery conducted by our research team last year.

We also predicted a firewall on crypto services upon learning this announcement. The crackdown on crypto venues represented the most important promotion and product-market fit for DeFi. We already saw capital inflows to DeFi applications reaching all-time high daily trading volumes, such as dYdX — a derivatives platform built on StarkEX, a scaling application.

In 2021, price developments of Ethereum-based DeFi tokens did not indicate any strength in fundamental metrics such as the growth in total value locked throughout the year. Curve (-90.3% from ATH), MarkerDAO (-61.8%), Aave (61.9%) and Compound (-77.6%) are all Ethereum-based DeFi applications with the most user traction. The market sentiment towards DeFi tokens accentuated the discrepancies between speculation and fundamental adoption. For example, Curve grew its assets by 1,561.8% since the start of the year, while its token, CRV, trades down -90% from its all-time high value hit prior to the China ban.

At Amun, we look beyond price developments as they do not tend to always reflect innovation, but in the long run, if a project keeps executing across core fundamental areas, the value will eventually be reflected in its price action.

The DeFi sector was not immune to hacks — particularly when it came to unaudited code. The third quarter represented the highest dollar amount of hacks in history, accounting for $886 million, predominantly from unaudited protocols. This is a reminder that DeFi is still early in the adoption lifecycle, similar to the early years of crypto exchanges back in 2011. More importantly, projects need to strengthen their security practices, such as launching bug bounties and battle test their products in real-world conditions for an extended period. This mind-blowing figure was 2.7 x greater than the previous year’s high of $319 million in Q2. According to Rekt, $1.3 billion has been stolen in 2021 alone (see image below). The largest hack to date, costing investors $600 million, was an attack on Poly Network, an interoperability network for trading assets. The silver lining is that blockchains’ flow of funds is transparent and therefore easy for law enforcement agencies and the community to track and identify the digital trail of attackers. The support of the crypto community has been essential, and as a matter of fact, in many cases, hackers often returned a portion of the stolen funds.

Summer 2021 was defined by a paradigm shift for first-time crypto investors that we can call “Class 2021: Web 3”. The prevalent retail investor would in the past buy mainly Bitcoin and Ether on centralized exchanges and store the assets on hardware wallets like Ledger or Trezor. However, the explosive resurgence and recognition of crypto-native art collections, music, and games (NFTs) have given a new face to this industry and attracted new cohorts of builders such as illustrators, musicians, game developers, photographers, movie producers, fashion designers, and 3D artists. Most of the newcomers have one thing in common, the Web 3 vision or the ‘creator economy” where Internet services are built to reward contributors and users while removing as many gatekeepers as possible.

“(…) Web3 can, if properly developed and with the right kind of regulation, provide a meaningful shift in power back to individuals and communities.” — Albert Wenger’s article on Crypto / Web 3

New exciting integrations and marketplaces came out these past three months, such as Fractional unlocking access to the most expensive NFTs by allowing owners to sell a fraction of their piece of art at a relatively more affordable price. In addition, Tik Tok released a creator-focused NFT collection available on Immutable X, a marketplace where creators will record some of their best videos available for sale to their fanbase — onboarding billions of users to the NFT world. Proceeds will essentially go directly to the creators and NFT artists involved, providing TikTok and NFT fans with a way to show support to the creators they love.

On the demand side, the buying pressure for Ether has been second to none, pushed forward by newcomers snipping NFT collections made of avatars portrayed in profile pictures like Bored Apes (launched in May), Word of Women (launched in July) or participating in play-to-earn games like Axie Infinity. This resulted in NFT marketplaces experiencing enormous month-over-month growth in trading volume, increasing by more than 900% from July to August to reach an all-time high of over $3 billion alone in August from slightly over $300 million in July. The third quarter ended with the second-highest dollar amount in volume with $2.8 in total.

The real spotlight shone on the spectacular growth of the NFT-gaming project similar to Pokemon, called Axie Infinity — generating over $800 million in revenue over the last 90 days. This is 3x greater than Opensea’s revenue in the same time frame. The AXS token experienced a growth of 110% in the week of September 28, putting the company at a higher market cap than established gaming companies such as Ubisoft and T2. The blockchain game also enjoyed the highest volume within the growing sector by reaching $2.25B in token sales since inception. What prompted the rally was the news surrounding the plans to airdrop AXS worth $60M to early adopters and the launch of a staking service that locked 29% of the circulating supply into the staking smart contract.

Besides art, media, and gaming, the imminent use case for the NFT sector will undoubtedly be music. NFT music will reduce the barriers between artists and their fans. For example, 3LAU, the American DJ and electronic dance music producer, launched Royal — a platform for fans to invest in their favorite musicians and share their potential success by owning a piece of an artist’s work through royalties. This will be a game-changer. Ownership is certified on-chain, removing gatekeepers and resulting in lower rent-seeking costs for artists. Until now, only record labels and agents had this privilege.

The NFT sector was fundamentally the growth catalyst on Ethereum, as DeFi was last summer. For the first time in history, Ethereum’s trading volume on Coinbase outpaced that of Bitcoin in a quarter as cited in their Q2 report, accounting for 26% of the total volume versus 24% for Bitcoin in this period.

Facebook announced a major corporate rebranding to Meta in reference to its strategy to focus on the next generation of social networking happening in virtual reality. In addition, the firm announced its intentions to support NFTs in the context of selling goods and services in the virtual world. “This will make it easier for people to sell Limited Edition digital objects like NFTs, display them in their digital spaces, and even resell them to the next person securely,” according to Facebook Head of Metaverse Products Vishal Shah.

Some critics attributed this move to increased regulatory scrutiny with the waves of scandals, such as the leaked documents from Frances Haugen, a former employee at Facebook — describing algorithm discrimination and oppression. However, at Amun, we believe Facebook’s announcement was an essential promotion for the crypto industry’s virtual & augmented reality sector. The tainted image of the social media giant is amongst the main reasons decentralized applications exist to dismantle the power a corporation like Facebook exerts over users.

Crypto-native virtual-reality applications shone as investors sought alternatives to Facebook. Ethereum-based virtual games such as the Sandbox (ticker: SAND) and Decentraland (ticker: MANA), where players can play, build, own, and monetize their virtual experiences — rose by more than 263% and 275%, respectively in the week after the announcement. On the flip side, Facebook has the competitive advantage of owning virtual reality hardware, Oculus. In 2014, Facebook announced the acquisition of this leader in immersive virtual reality technology, for a total of approximately $2 billion. The paradox between software and hardware in the VR and AR sectors will be important to monitor as this sector moves towards mainstream adoption. The bull case scenario for Facebook / Meta is that by owning Oculus, it might become the largest beneficiary of the adoption of the Metaverse sector as users will likely be using more immersion VR goggles significantly in the future.

Meta could win the VR/AR hardware race but not necessarily succeed in the application/software category. While its virtual space will be available to billions, due to distrust placed in Facebook, users will most likely divert to crypto-native applications like Sandbox and Decentraland. So either Facebook will make those crypto virtual spaces available on Oculus alongside its in-house application or take the opposite direction. Needless to say that embracing decentralized VR and AR applications on Oculus will be one of the most important moves for Facebook / Meta to reinvent itself.

This stratospheric demand put Ethereum as a victim of its unmatched success reflected in relatively high gas fees driven by increasingly more sophisticated market-order attacks and manipulation, called maximum extractable value (MEV). In a nutshell, the concept of MEV describes bots attempting to front-run users by mimicking lucrative transactions and bidding higher transaction fees to get their arbitrage opportunity prioritized on the Ethereum network by miners. Market friction has formed a strong narrative in favor of Ethereum competitors and driven developers to learn and build on other networks with value propositions zeroed in on higher throughput and lower transaction costs than Ethereum. These networks include Solana, Avalanche, Fantom, and more.

Solana has been the fastest growing chain to reach the $1 billion mark in TVL in just 95 days, in comparison it took 140 days for Fantom, and 199 days for Avalanche. However, comparing the identical TVL amounts of these networks against Ethereum indicates that these networks are likely undervalued. For instance, Fantom, with over $1 billion in TVL was valued at $3 billion, while Ethereum had an equivalent market cap of about $25.5 billion in June 2020 with the same TVL.

It is important to note that these blockchains are relatively more centralized and less secure than Ethereum as they have fewer validators and staked capital allocated to secure the network. However, many see the road to decentralization and security as a marathon, not a sprint. So we can expect this infrastructure to not happen overnight. The 17-hour Solana outage, which occurred on September 14 was caused by trading bots and a demonstration of how early in their development stage these Ethereum competitors are. Battle-testing during the development phase is, therefore, more critical than the theoretically superior processing capabilities of a blockchain. 50,000 transactions per second are evidently not enough for the Solana network to onboard over a billion users.

Most services built on Ethereum alternatives are predominantly clones or variations of Ethereum’s native applications. These include decentralized exchanges, yield aggregators, and lending platforms. Many also implement the same playbook to incentivize capital inflow through incentivized yields via liquidity mining programs and airdrops. For example, Fantom, Avalanche, and Celo allocated hundreds of millions of dollars to liquidity schemes to lure users from Ethereum last quarter. Fantom hopes to attract ecosystem builders beyond DeFi, while Celo provides wider DeFi accessibility tailored for mobile users.

Terra enjoyed its most significant network upgrade to date with the deployment of the Colombus-5; it will initiate Cosmos’ Inter-blockchain-communication (IBC) standard after a community vote. IBC allows for interoperability and transfer of assets between blockchains. Another monumental change pertains to the tokeneconomics of LUNA, as the token will now be directly burnt as a result of minting UST, instead of sending it to the community pool.

The migration of capital to networks outside Ethereum has led to the unprecedented adoption and growth in total value locked (TVL) or the assets under management (AUM) held by decentralized financial services applications built on Ethereum alternatives. One concern is that these liquidity schemes do not foster long-term user traction and engagement. Forensic studies led by Nansen indicated that nearly 60% of the user base of these applications take their capital out for other investment opportunities within 48 hours as the rewards drop. This also creates selling pressure for the newly awarded tokens, which may lack vesting schedules.

In Q3, the underperforming cryptoassets in the top 15 by market cap were Polkadot and Cosmos; both are interoperability protocols whose investment case has not fully resonated with investors. Our research team believes the narrative will shift as Ethereum competitors continue to grow and the need for blockchain interoperability starts to rise — we expect to see this soon, especially as Polkadot could gain more traction with Parachains.

Parachains are also dubbed ‘Layer 1s’ (L1), in other words, blockchains like Bitcoin and Ethereum or Solana can be implemented in the Polkadot platform to become interoperable with one another thanks to ‘Relay Chains’. The Polkadot design requires these parachains to win an auction to operate in the Polkadot ecosystem via a community vote called crowdloans. The Polkadot token, DOT, will serve as the currency the community uses to vote for a given ‘Parachain’ to win an auction.

Most of those auctions have previously been launched on Kusama, the testnet of the Polkadot blockchain to battle test real-world conditions prior to implementing them on Polkadot. Millions of dollars have been raised via crowdloans on Kusama, here is the list of auctions.

In the meantime, as interoperability platforms have yet to launch, scalability solutions dubbed L2s such as StarkEX, Arbitrum, and Optimism have been flourishing — increasing by 592% in Q3 overall with TVL estimated at $2.5 billion. The outlier of this category has been Arbitrum with an extraordinary growth rate 1,547,253.8% from just $92K in TVL on June 30th to over $1B by the end of Q3. It’s likely that scalability solutions will keep up with this rate of adoption as more applications get integrated and these solutions improve over time with upgrades, optimizations in tandem with greater adoption. In a nutshell, these L2s bundle transactions and settle them on the Ethereum network at a later point in time. This technique removes the computation and storage required out of Ethereum while maintaining Etheruem’s security and increasing the capacity up to 20,000 transactions per second for a few cents in fees compared to over $30 on Ethereum. Right now, Ethereum’s throughput for complex transactions in DeFi is limited to 15 transactions per second. In simple terms, Ethereum is like the Fedwire settling commercial banks’ transactions while L2s are the commercial banks offering consumer-facing services.

All in all, this is great news for the whole crypto industry and the DeFi infrastructure. This would mean that over In the coming year, we’ll witness greater interoperability across blockchains, not only those that are necessarily compatible with Ethereum. This will improve user experience by orders of magnitude and unlock the next generation of internet services that are already budding in financial services (DeFi) and media, art, and games (NFTs).

Welcome. If you are here it’s probably because you’ve started to hear your friends talking about some crypto coins and how they know of a guy that made a bunch of money buying a dog themed coin. Sorry to burst your bubble but most people lose money trading those memecoins. However, you still have hope. In this article I’ll go through 3 different personas you might identify with to mirror your portfolio off of. Then I will talk about some of the biggest mistakes I have seen and even some that I have made in the past.

First, it is important to understand what you want to get out of the market and your investments. There are a few questions you need to ask yourself in order to have the best outcome and the least stress. Ask yourself:

What is your level of risk? Age matters. It is not the same to gamble savings when you are in your 20s vs when you are in your 40s, 60s and so on. Define your risk tolerance. This also tells you how much you should put in. It is common to say, “only spend what you are willing to lose”, but let’s be honest, you don’t expect to lose, yet you still might.

How long are you planning on holding? This is an important question. Will you be looking at the price of your investments every day and worrying? Or do you understand that markets are volatile but in the long term the trend moves up. Top buyers in 2017 are sitting comfortably now, but many didn’t hold and realized a loss selling at the bottom. Conviction matters.

Are you an investor or a trader? It is important to define the differences. Traders open and close positions at a higher frequency, and are less attached to their purchases. Investors on the other hand tend to have a longer outlook and are less concerned with volatility.

Finally, are you in it for the tech? Or do you just want to get rich quick? Get rich quick schemes never end well. Participants more often than not end up getting hurt. It’s all about cashing out before the next person. As corny as it sounds, being in it for the tech has different implications. You are exposed to something you believe in, and most importantly, you have long term conviction on the adoption of what you are buying into. If we compare this to Bitcoin, you believe that in the long term, people will use, buy and hold Bitcoin. That is to say, the price will be driven by adoption rather than speculation.

Ok, enough with the pep talk. You only want to hear what to buy, when to buy and how to allocate yourself for success. By answering the above questions, you will be able to place yourself into one of the following roles.

I will present 3 personas: Boomer, Millennial, Gen Z.

Boomer: You are more conservative with your money and you want less risk but still are looking for exposure to this asset class. Maybe you choose to allocate between 5–10% of your net worth into this experiment.

Millennial: You are depressed knowing that you will never own a house, and you work but it’s never enough. You want to get rich and hope that there is a housing market crash so that you can finally own property because your parents said it’s the only legitimate form of wealth. You are in a medium risk category as you don’t want to go broke but are willing to stick your neck out in hopes of a change. Banks are screwing you anyway. You go in harder with a 40–60% allocation of your net worth. Why hold fiat if it’s only losing you purchasing power?

Gen Z: YOLO. Retirement on a yacht or food stamps. You probably live with your parents so even if you lose all of your money, you can make it back by working for two months because you don’t have that much disposable income anyway. You want high risk, high reward. You should go all in, but since we’re being conservative in this article, let’s say 80–90% of your net worth. Yes, with a high risk appetite and very little to lose, there is no reason to not go all in on the most innovative asset class since the creation of sliced bread.

OK, BOOMER Let’s begin, you will allocate between 5–10% of your net worth to crypto. You only care about the top projects since they are the most stable. You don’t care too much about the tech or fundamentals, and the concept of mining is still confusing. Proof of Stake? Don’t even. You might do 50% in Bitcoin, 40% in Ethereum and then gamble a little with other top 10 projects because you wanna feel young again. You heard that Solana and Avalanche are Ethereum competitors, and your grandson mentioned Luna, so you allocate 10% of the stack to those three.

How and when should you buy? You only buy when you see that there is a huge pull back on the news. You aren’t a trader so you look for the easiest low risk entries. Has the market pulled back 50%? You start to DCA (Dollar cost average) because you understand you won’t catch the bottom, but it’s a good time to start buying. You keep it simple and don’t look at the price too often. You want to keep things low stress so that you don’t need a cholesterol pill.

STOP COMPLAINING, MILLENNIAL

You are offended that you aren’t rich yet. Maybe you bought the top of the last bull market but it wasn’t enough to retire you. Worse, it’s all sitting in XRP (Ripple) because you didn’t understand that crypto was about decentralization until now. How will you make your parents proud? You feel smart, what you do matters, you are changing the world and your wall is filled with medals for participation. Congratulations. It seems you have a little more risk appetite, you are willing to diversify a little more and you understand there are different sectors you can buy into. You’ve heard of the terms DeFi, NFT, Metaverse and Layer 1. Similar to the Boomer, you will buy the top projects but you will now define them by sector. Wow, smart, you might even look into other metrics too. BTC and ETH are still here for the long term so 40% of your portfolio will go into these. You believe in the internet computer after reading The Infinite Machine so you are heavier into Ethereum. Your allocation: 25% ETH, 15% BTC. You know that the biggest gains aren’t in Bitcoin anymore, so now it’s time to get creative. Layer 1 protocols are the others you notice when you check CoinGecko’s top 10 list. These are SOL, LUNA, AVAX, FTM, BNB, and DOT, among others. There are too many options so you will need some help to refine your picks. You turn to Defi Llama to check the TVL (total value locked) as this is a good indicator of the amount of users on each chain.

There are many options here but lets focus on the top 10 non-exchange chains. These include LUNA, FTM, AVAX, SOL, MATIC, and DOT. Getting exposure to these chains offers you exposure to everything being developed there. Treat it as if you are investing in a country, and the companies are the dApps (decentralized application) being developed on that chain. “Instead of applying company valuation models, layer 1 tokens should be valued as currencies of crypto nation states.” — Tascha

30% of your portfolio will be dedicated to these Layer 1 chains. There is some risk, yet great reward. Some notable mentions that don’t appear in the top 10 on DeFi Llama but have developed great tech are, in no particular order: ONE (Harmony), NEAR and ATOM. It might be a good idea to throw them a bone too.

Next, let’s move into DeFi — decentralized finance. These are dApps that are built on different chains. Again, we can use DeFi Llama to see which ones have the most TVL and thus, the most users.

There are so many options so you will choose to focus on the ones you might have used or may have heard about from a friend. Curve is a stable swap platform. Aave is a lending protocol/money market, similar to a bank. Anchor is a savings account. Uniswap and Sushiswap are decentralized exchanges. YFI is another savings account. The above mentioned are multichain (apart from Anchor but plans are in the works) so that is why you picked those. Regardless of what chain wins in the end, these dApps will be on there, again lowering your risk. You choose to allocate 15% of your portfolio into these DeFi tokens because you read on Bloomberg that DeFi is innovating FinTech. In reality, deep inside, you just want to stick it to the man (either Gary Gensler or Elizabeth Warren — you can choose here). You are now a shadowy super coder and have a new medal for participation.

Finally, you have 15% of your portfolio left. What will you do? Oh yeah, enter the metaverse.

Ever since our alien overlord Zuk decided to rebrand Facebook to Meta, there has been a boom about the metaverse. You watched Ready Player One, but you tell people that you read the book. You are ready! There has been a wave of companies getting into the metaverse and promising to spend ungodly sums of money to create the new dot com bubble. Facebook, Gemini, Microsoft, among many others are looking to spend money developing this new money printer.

This is it, you will finally get rich. But the only problem is that you don’t really know how to enter the metaverse… where is it again? Time to buy. The top metaverse tokens according to market cap are MANA, SAND, AXIE, ENJ, RNDR and JEWEL. You only buy these top 6 because the rest becomes too obscure. You don’t want to get mugged in the metaverse, do you? You don’t know much about these projects but you figure you’d get exposure to the top ones just in case. You also saw Snoop Dogg building something in the metaverse, so it seems less risky.

How and when should you buy?Now that you know how you will be spending those Dollars or (insert local currency), you need to know when to buy. You know your boomer friend does some DCA after intense pull backs but you don’t have that patience. You look to ride the waves even if you are swept under by a few of them. You will buy the dips, limiting yourself to buying only after a 30%+ dip as this is your risk management strategy. You haven’t opened a chart and you don’t care to, but you know that if there is a big pull back, it’s time to start buying. The main problem with your strategy is that bear markets in crypto tend to continue dipping. It doesn’t matter since you are in it for the long haul (3–7 years) so whenever you see a dip, you buy a little. Oh it dipped again? Buy some more. You are applying the DCA strategy but being a little smarter about it by buying during the dips. It’s ok because if you zoom out when looking at price history, markets are UP ONLY and you have become an expert on inflation. You’d rather hold an asset that will appreciate over time versus holding fiat currencies that are losing their purchasing power.

YOLO! Mom, what’s for dinner? — Gen Z

Hey kid, welcome to the world of high volatility. 20% 1-hour candles and rug pulls. You don’t care if meme coins take up a bunch of your portfolio, and you are willing to get rugged if there is a chance you could buy a ticket on one of those billionaire dildos flying into space. You still hold GME and AMC because Roaring Kitty likes the stock. Wallstreet bets changed your life — you didn’t make money though. Bitcoin? What’s that, a boomer coin? Volatility for ants? You hold ETH because you dabble in NFTs too. Oh snap! Half of your ETH has gone to gas fees. You are a gambler and are willing to risk it, so you might buy some of the higher risk assets. Olympus DAO offers 1000% + APY? Sign me up. You don’t buy the SAND token, you buy land in their metaverse instead. You are a visionary. Every project stuck with the concept of digital currencies are dino coins. Bye bye LTC, DASH, XMR, XRP, XLM. You got smart contracts or bust.

So how do you do it? Let’s break it down. 20% goes to ETH so you can pay gas fees for your illiquid JPEGs. 30% goes to other Layer 1 solutions — heavy in LUNA, AVAX, FTM, and you dabble in SOL. You understand that ATOM and IBC (Inter-blockchain Communications) are the future and you want exposure to that ecosystem so 10% goes towards that. These include, OSMOSIS, SCRT and JUNO, try to keep up. Gabling is life so 10% of your portfolio is reserved for JPEGs and memecoins, woof. You have been known to fight right click save bros. If you don’t want that risk, you could reduce it to 5% towards this sector. Next is Defi 2.0. You understand the value of stablecoins and love high APRs so you allocate to some of the innovators in this space. You buy OHM, ACLX, TOKE, CVX, FRX and even some SPELL because you don’t care if the Frog Nation dealt with a known scammer and criminal. You will allocate 15% toward these innovators in DeFi 2.0, turning DeFi upside down. Last but not least, you want some exposure to the world of Play to Earn and the metaverse. You allocate the remaining 15% towards SAND, AXIE, RON, MAGIC and JEWEL. None of the allocation goes towards MANA because that’s only for VCs and no one is actually using it. You also find it cringy that millennials like MANA.

How and when do you buy?

You are wild, but you also read some Warren Buffett memes and know the power of buying the dip. The problem is that you’ve bought EVERY dip. Let’s fix that. I’ll talk about basic charting since you were born in the metaverse and tech is second nature.

Support and resistance zones.

When you look at a chart and you are looking for support and resistance zones, you look for horizontal zones of importance. Typically you want at least 3 touches of that zone to confirm that there is a trend. Often a trend that was resistance can later be flipped as support as we see in the middle of this Bitcoin chart. The resistance was later flipped to support and now has flipped again into resistance. You can watch how it develops in real time here.

Understanding this can give you an edge on WHEN you should be looking to buy. You want to buy at or close to support since this is where you are most likely to find local bottoms. I know you are wild and free but simply understanding the basics of horizontal supports and resistances can make your investments a lot more profitable. Yes, supports and resistances can break as we have seen in the above chart. However, your risk reward is in a much better position when you learn this simple lesson.

Once a support or a resistance is broken, we often get a retest. These can be on the way up or on the way down. A retest comes after crossing that support or resistance level. Then the price comes back to that level to confirm whether or not this support/resistance still acts as a reference point. Buying the breakout retest can be the best low risk way to enter positions. On the contrary, selling the breakdown retest can be a safe way to exit or short a position.

To wrap it all up, there are a few lessons I wish to share about my portfolio experience in the past 4/5 years.

Over diversificationIn crypto it is so easy to want to buy into every project you hear about. Everyone is innovating and promising to change the world. The problem is that during bear markets, half of these projects disappear, or these are the projects that have the worst pullbacks and then don’t recover. Having a more concise portfolio can help mitigate these risks while also giving you exposure to the different asset classes.

Lesson Learned: don’t buy every project you hear about. Try to keep the amount of tokens you hold low. If it requires you to open a new account on a new exchange, then you probably don’t need to be buying that token.

Take ProfitsIt is very common to grow attached to your investments and never want to sell. However, you should look at profit taking like taking sips from a tall glass of beer that is slowly getting filled. Take a few sips every so often so as not to let it spill over. If the price ends up crashing, you already have already got a nice buzz going / have been able to take some profits. Otherwise you are just left with a glass that spilled, but you never got to enjoy it. You can always use those profits to earn some nice interest in DeFi and then just buy again when the price comes back down.

Lesson Learned: Slowly take profits as the price goes up. Especially after a big move, profits should be taken slow and steady, similar to how you might buy with a DCA strategy.

Don’t FOMOPrice always comes back down. Sometimes it can feel like you missed the boat. Prices are soaring and everything looks like it will literally go to the moon. But prices will always come back down. Use what you learned about supports and resistances, use a high time frame like the weekly chart, and find an area of support to see where you might buy. Price will more often than not come back to test that zone.

Lesson learned: Don’t get caught up in the hype train. Focus on fundamentals and teams that are here for the long haul.

PaytianceYes, I wrote that correctly. Patience pays. Sometimes it can feel like the market will never go back up or that it will never come back down. Having patience will more often than not pay off. I once sold one whole BTC at 4k after buying at 3K. Yes, I know it’s now trading around 40k… Paytiance and conviction.

Lesson learned: Have patience, conviction matters. If you did your homework then trust in your research.

BoundariesFinally, if you aren’t trading then stop looking at the price. I was opening positions in the afternoon and would wake up in the middle of the night to check the prices on my phone. This would only add unnecessary stress for a potential reward that in no way was life changing. The wife changing money is made in the long run.

Lesson learned: There is no reason to track every movement in the market. It will only make you stressed. Go find something more fun in life. Maybe go outside. Crypto is 24/7 every day of the year so it is important to set your boundaries.

Thank you for getting this far. You are now ready to start buying and setting up your portfolio in the world of crypto currencies. Remember though, it is not just about speculation, it is about changing the world for a more free and decentralized future.

If you want to understand better the reasoning behind choosing some of the above mentioned investments you might enjoy reading my 2022 Investment Thesis. https://medium.com/cryptostars/investment-thesis-2022-5e81ed0fa24f

Be well,

Xulian

@KingJulianIAm

He is a CommonHERO and is not used much in battles, but is a pretty good INT type HERO in quests. He is often used to adjust HRC.

It is also easy to use with a high AGI, a status that affects the number of actions in battle.

I would like to add some additional information.HERO can be roughly categorized as balanced, PHY, or INT.

I consider a balanced type to be one in which the PHY and INT statuses increase to about the same value, a PHY type to be one in which the PHY is higher, and an INT type to be one in which the INT is higher.

Let’s get back to him and his story.He is an INT type and has excellent AGI status, so when playing with him in quests, you should put the following three skills on him.

HERO Story

A.C. Doyle is a famous British writer of the 19th/20th century, well known for being the inventor of Sherlock Holmes (represented on the Hero picture).

Market Information

He needs to get it from the secondary market as it is already sold out. From my light research, roughly around 0.011 ETH would be a fair floor price for a floor place.(8th March 2022)

To get him, you can either look for it on Opensea or join the Discord community, which is a lively community of Japanese players.

Opensea :https://opensea.io/collection/mycryptoheroes

Discord :https://discord.gg/b2ZAWYpVDH

I can speak a little Japanese, and I would like to explain it to you.First of all, “出” means “For Sale”. Also, “求” means “price”.

Arthur Conan Doyle is “コナン・ドイル” in Japanese, so look for this character!

Additionally, You can also get him at the in-game market or at tofuNFT!At the in-game market, it looks like you can get him for about 300 GUM!At tofuNFT, it appears to be trading at around 20 MATIC.(8th March 2022)

in-game market :https://www.mycryptoheroes.net/market/trade/heroes

tofuNFT :https://tofunft.com/discover/items?contracts=967&network=137

Explainer video

Batou of FoxTeam has created a more detailed Arthur Conan Doyle explainer video! Check it out!

Well, that’s about it for this issue!If you have any questions, feel free to ask on the MCHOfficialDiscord! Well, enjoy MCH! Bye bye!

MCHOfficialDiscord :https://discord.gg/d6TMGzS7y9

Special Thanks

Batou of FoxTeam provided the video and HEROStory.https://twitter.com/Batou_MCH

The initial Earn pairs available on Polygon are:

Vesper Earn opens up a number of new opportunities for how DeFi participants use their yield — from remittances to daily spending money and startup funding.

The output yield is dripped to users over time and they can claim as often as they like. Any earned cryptocurrency not claimed by the user continues to compound until the claim is made. It is wrapped as Vesper pool deposits until the time of claim.

In the near term, DeFi participants can use Vesper Earn for:

Vesper Earn pools have a different fee structure from Grow pools. Earn pools carry a 0% withdrawal fee and a 25% performance fee. Revenue generated from this yield is handled under the global Vesper revenue framework, which includes splits to vVSP token holders, the developer, and the treasury.

Vesper Earn is available on the Vesper Finance web app, which offers multiple languages.

What are you most excited to use Vesper Earn for? Share feedback and join the conversation in the Discord #product-feedback channel to help drive the future of Vesper Earn!

Waves is a blockchain platform that combines the features of a cryptocurrency, a token launch, and a decentralized alternate (DEX). These cryptocurrency tokens are in many instances referred to as smart contracts. There is an alternative on the Waves blockchain that offers customers the freedom to buy, sell, and alternate different cryptocurrencies. Since its launch, Waves has morphed into one of the Top one hundred most profitable cryptocurrencies around. This boom has resulted in a market capitalization of nearly seven hundred million dollars, as of July 2021.

Waves made its entry into the market in 2016. The blockchain platform was once a success from the get-go and the firm’s Initial Coin Offering (ICO). It was once in a position to impenetrable over $16 million at its launch. The ride of the group working on the platform performed a big function in how profitable it was once after its launching.

Waves community underwent an important improvement in September 2018. This improvement led to the integration of a number of aspects such as assisting for multi-sig addresses, atomic swaps, token freezing, voting, and oracles. Oracles serve as off-chain sensors which talk with the blockchain.

Precisely a month later, analysts on Waves clocked 6.1 million transactions on the platform in a single day. Thus putting the document for the most processed transactions of any blockchain platform in a day.

There are various key factors in the Waves blockchain. They consist of nodes, PoS and LPoS, Waves NG, Smart contracts.

The two-tier structure that continues the Waves community is divided into full nodes and light-weight nodes. The full nodes are the miners that validate transactions as nicely as add new blocks to the blockchain. Meanwhile, the velocity of the light-weight node up transactions and verbal exchange inside the network. What makes lightweight nodes quicker is their incapability to download the blockchain.

LPoS is an acronym for Leased Proof of Stake. It is an improved model of the PoS consensus algorithm via which Waves objectives to invulnerable the Waves community with the aid of the allotted consensus. Users are capable to hire their tokens to the full node at the rate of 0.002 WAVES per leasing. For node owners, leased tokens can assist them to generate blocks and get entry to the mining reward. Also, the token holders stand to advantage from leasing as they are afforded the probability to put their tokens up for hire to the Waves nodes and earn a commission.

Waves NG is a new protocol brought by way of the Waves platform that approves its blockchain to take care of several transactions in the shortest time possible. The characteristic mirrors the Bitcoin NG and its ideas jettison the precept of discovering blocks at comparable intervals. It additionally offers customers the freedom to procedure their transactions as quickly as the requests are submitted to the network.

The Smart contract characteristic launched in September 2018. It goals to rival the likes of Lisk (LSK), EOS (EOS), Ethereum (ETH), and NEO (NEO). Waves Smart contract guarantees to supply atomic swaps, token freezing, multi-signature addresses, voting, and oracles.

There are a number of points of Waves that stand it out from different blockchain platforms.

Firstly, it employs Fiat Gateways. This permits customers to exchange any token issued on the Waves stage for bodily cash, which can be stored in a bank. An instance is USD/EUR/CNY.

Secondly, its KYC/AML characteristic shops and pulls lower back fiat cash. KYC is then again no longer essential for digital forex exchanges.

Thirdly, transaction prices on Waves can be as low as 0.001 WAVES for a normal transaction or about 0.005 for transactions that invoke the script.

Further, the WavesDEX allows customers to change their BTC/ETH as properly as different digital currencies in return for WAVES. WavesDEX is decentralized primarily based on the Waves blockchain.

Finally, all of us can launch Smart contracts on Waves as no programming journey is necessary. This is due to the fact they are no longer as complicated as Ethereum however invulnerable and capable.

Read to: How to Development Cryptocurrency Wallet

How to Implement Blockchain in Business

Some of the makes use of instances of Waves protocol encompass an obvious mission capital employer Tokenomica, a political engagement initiative Upcoming, an inexperienced manufacturing commercial enterprise science ZrCoin, advertising, and marketing power for a cell gaming platform MobileGo. Besides, a protected telecommunications infrastructure employer EncryptoTel and a blockchain loyalty scheme known as Incent additionally use Waves.

In its function as a pioneering pressure in the market, Waves has endured creating attention for mass adoption through simplicity. There are consequently a host of advantages that lie in the blockchain platform. Waves are very handy to use. It offers customers a simpler way to create their personal token owing to its simple blockchain technology. Ethereum needs that builders possess a grasp of programming languages such as Solidarity in order to be in a position to execute Smart contracts. However, Waves tokens are convenient to software and are best for corporations with primary features like these into utility tokens, and loyalty programs.

Users on Waves have the liberty to stake their cryptocurrencies and earn a reward in return. The reason for stakers on the Waves blockchain community is to hold stability. In order to insure in opposition to the manageable economic loss that should take place if customers run a malicious node, PoS community would demand customers to make large deposits to take part as a node. As a Trader on Waves, you have to get entry to a decentralized alternate (DEX) that permits you to exchange any Waves-based token with any different Waves-based token in a count number of seconds. The platform additionally gives initiatives with instant get entry to liquidity making it best for token launch strategies.

Waves token is the principal crypto on the blockchain. The token can serve as a charge option, and it can additionally be used to create new tokens or stakes for rewards. That makes the token very versatile. Waves have a complete of 100,000,000 tokens in circulation. The platform has been capable to elevate 16.4 million greenbacks all through its ICO that took area between April to May 2016. Its tokens are reachable for alternate on various exchanges inclusive of Binance, Bittrex, and others. Read more.

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