Twitter | Starter Pack | Reddit | YouTube | Patreon | Website | Earn $250 in Promos
General News
GameStop Creates NFT Divsion
The retailer hired over 20 people to run the division.
This team will be responsible for building an online marketplace for buying, selling, and trading NFTs for virtual games.
They’ll be competing with established market places like OpenSea and Rarible. This move comes after reporting losses in previous quarters.
Their stock jumped 35x during last years retail frenzy but since has fallen over 50% from the peak. They understand their current business model needs to change or they risk becoming a retail relic.
Opinion: I think this is an excellent way to leverage their existing user base and brand. This base will likely prefer GameStop for their NFT shopping needs and the demand will grow with adoption. Despite the growing volume on existing secondary markets, they haven’t committed time to on-boarding non crypto natives. This creates an opportunity for the likes of GameStop. On a side note, I bet someone creates a marketplace aggregator to dissolve the fragmentation. Might be a good idea for existing marketplaces to leap frog their competition by beginning the development today.
Crypto Insights from JPMorgan
“The applications from crypto have only just begun. Web #, greater use of NFTs tokenization are in the line-of-sight for 2022.”
“the tokenization and fractionalization as holding particularly large promise as transactions speeds in crypto become more competitive with trad-fi networks”
“Defi was a bit of a flop in 2021, but still has strong potential in 2022 and beyond.”
“The use cases for crypto markets will continue to grow and new projects and tokens with more and different use cases will surface.”
2021 was the year of NFTs but 2022 will be the year of interoperability
Opinion: I didn’t expect to be aligned with so many of their views. However, I’ll push back on DeFi being a flop in 2021. This is very early innings and core primitives are being iterated on. The total value locked (TVL) overall has been increasing and hit new all time highs after the mid cycle sell off.
As the chains scale, existing protocols are improved, and new product/services are built I expect this trend to continue. Long term many of the primitives being built today will be integrated in the backends of legacy financial products.
Terra’s $139M Proposal
Terra wants to provide $139M in UST and LUNA to several DeFi projects. Many chains will be the beneficiaries of this program but most the funds will be directed at projects building on Ethereum, Polygon, and Solana.
Each project may receive $250K to $50M.
At this time the following stablecoins have a higher TVL; Binance USD (BUSD) ($14 billion), USD Coin (USDC) ($43 billion) and Tether (USDT) ($78 billion) have a higher market cap than UST ($10.3 billion).
Here are the sums proposed for a few projects; Tokemak: $50M, Convex:$18M, Olympus: 1.425M, InvictusDAO: $250K
Opinion: There’s a tremendous amount of talent, money, and support behind Terra. They’re making bold moves to achieve Do’s vision of UST becoming the dominant stablecoin in DeFi. With the momentum they have I wouldn’t bet against them.
Strong Trends to Follow
Harmony
DeFi Kingdoms (DFK) put a huge spotlight on the network. The surge of new users also benefited other projects. Tranquil Finance, Tranquil City, Cosmic Universe, and Crypto Royale all fell under my radar after my investment into DFK. Due to the increased activity the network has been clogged but you can ameliorate this by adding the Pocket-powered RPC endpoint. I expect the activity and TVL on Harmony to continue growing.
Despite the broader market selling off, the TVL on Harmony continues to grow. Once the sentiment reverses we can expect the growth to accelerate. Also, many projects are doing fair launches without getting a dime from venture capital (VC). Many of them have quality teams and communities behind them. For this reason, I decided to get exposure to the following tokens USHARE, JEWEL, LUMEN, TRANQ, MAGIC, and ROY.
Near
Too bad I didn’t hear about the $800M ecosystem fund months ago. It would have prompted me to dig and I would have definitely gotten exposure. It’s ok because I still think we’re relatively early. I’ve noticed a few high profile crypto investors also taking an interest in Near. This means more money pouring into the ecosystem which creates more opportunities for smaller investors.
It takes large players more time to make their rotations. Additionally, they have a hard time getting exposure to low cap assets. This gives smaller retail players an edge. I’m using this edge to pick up OCT. Octopus Network is a Near based layer 2 with IBC support. This means you’ll be able to send assets from Octupus to other chains that support IBC - like Cosmos. Maybe we’ll see Octopus Network tokens listed on Osmosis in the future. Many are making comparisons to Polkadot because Octopus aims to deliver the same product with reduced complexity and cost. The parachain model forces projects to commit a lot of time and resources prior to deployment. I could keep going but to simply put it, OCT is a leveraged bet on Near.
Cosmos
At this point just about everyone is rotating into Cosmos. As you guys know I’m playing this by farming on Osmosis. Recently I sent my LUNA to Osmosis, converted half to OSMO to provide liquidity and earn 93% APR. While the market chops I earn pools fees and yield farming rewards. Also, if ATOM pumps I think OSMO will pump harder. OSMO trends with ATOM and most the lucrative yields are offered to the OSMO paired pools. The desire to earn these higher yields will encourage users to buy and provide liquidity with OSMO.
Aside from providing liquidity, I’m also buying a few low caps. I’m going pure degen and buying anything near a penny like HUAHUA, IRIS, and DVPN. I’ve had exposure to JUNO and CMDX for a while with my LPs. Remember you have to bond your LP positions for 1, 7, or 14 days to earn the farming rewards. I chose one week because I don’t have any immediate plans to withdraw but I also wanted some pivotability.
I’m confident a large ball of capital is about to roll into Cosmos. The best time to position for this is now.
Fantom & Web 3 Infra
It’s getting late so I’m going to be very vague. Fantom like Harmony continues to see increasing TVL despite the broader market conditions. Given their TVL and the quality of protocols, I think Fantom is undervalued compared to other layer 1s. There’s also growing anticipation for Andre Cronje’s new project, set to launch with the help of Daniele Sestagilli. Anything these two touch will attract a lot of attention and capital. Furthermore, Andre teased the DeFi community with this visual of the token distribution.
All the tokens are being distributed to the community which implies robust liquidity incentives for early users. I’ve decided to get exposure to FTM by providing liquidity to the FTM/JEWEL pool on DFK. I get exposure to both tokens and I get to earn 300% plus APR.
Out of all the themes I’m the most bullish on Web 3 infra. I believe decentralized web 3 infrastructure is needed to make DAPPS more performant, censorship resistant, and secure. Web 3 infra is the best long term play in the entire crypto game because its the layer that will underpin everything. In the coming weeks I’ll share a few projects that peak my interest. For now take a look at AKT, POKT, and ALEPH.
Altcoin Index
Crypto Fear and Greed Index
Market Outlook
I disagree with Arthur Hayes view about us being in a bear market. Traditionally rate hikes haven’t been good for risk on assets. That may have been a problem for BTC in the past but I think BTCs utility in a portfolio will morph in the coming years. The sophisticated players entering the space will help tame BTC’s volatility. Contractionary and expansionary periods will look more like the S&P in a few years. At some point I can see BTC replacing bonds in peoples portfolios. Also, these rate hikes aren’t going to be enough to control inflation. Investors will have to do something or risk eroding away their purchasing power. With investors coming to the realization that crypto assets are here stay, I can see family offices and large funds rotating out of stocks and into crypto. I don’t know when is going to happen but I’m sure its coming.. The best way to play the market until the new money arrives is rotate, rotate, and rotate. Play the hot themes and remember to cash out into quality for the long term. For me this means cashing out into web 3 infra plays.
Portfolio Update
The biggest move I made these week was selling half my LUNA to provide liquidity to LUNA/JEWEL on DFK and LUNA/OSMO on Osmosis. I also added liquidity to the FTM/JEWEL and OSMO/ATOM pools as well. All the other moves I made are were mentioned in the previous segments of this newsletter.