The SBF trial has just started, and it’s spicier than the Lamb Vindaloo I ate last night. Here’s what they’re saying happened behind the scenes:
- $100M+ was used to bribe Chinese officials
- SBF wanted to buy BlockFi to move its assets to FTX, and take loans against it.
- SBF wanted regulators to crack down on Binance
- SBF was trying to raise money from the Saudi Crown Prince, Mohammed Bin Salman 2 weeks before bankruptcy.
Amidst the worst financial Scam in history, there’s also a story of the world’s worst breakup: Sam and Caroline. She’s now testifying against Sam and sharing all the dirt.
“hell hath no fury like a woman scorned.”
Here’s what we got today:
- Liquid Restaking Tokens 101. The Next 100x Primitive”
- Small Portfolios Tactics. What to do if you’re on a small budget.
- Around the Web. Frax v3 docs are live, Instadapp introduced Fluid, Solana shipped “Confidential Transfers”, and more.
Here’s your Edge 🗡️!
Liquid Restaked Tokens 101
The next big crypto asset class is here: Liquid Restaked Tokens.
It doesn’t exist on the mainnet yet. But when it comes, everyone will race to buy it. So consider this a sign to start understanding it.
Here’s your introduction to Liquid Restaked Tokens.
What is restaking? Restaking is a pretty simple concept. You take your staked ETH, then restake it. You promise to provide certain services to the new protocol in return for yield. If you fail to provide those services, you might lose some of your staked ETH.
This is a win-win deal. Protocols can more easily secure their networks and work with new ways to design tokenomics while restakers can access additional yield.
EigenLayer is the platform that will connect restakers with protocols. Think of it like Uber connecting travelers with rides.
However, restaking does have some drawbacks:
- High fees: claiming rewards can be costly.
- Highly technical: a normie won’t be able to restake easily.
- No liquidity: you have to lock up the staked ETH. This has an opportunity cost.
Enter Liquid Restaking Tokens (LRTs).
They are just like Liquid Staked Tokens (LSTs). With LSTs, users deposit their ETH and LSTs handle the staking. With LRTs, users give LSTs (stETH, rETH, or cbETH), and the LRTs handle the restaking.
LRTs have several benefits over native restaking:
- Liquidity: you can use them across DeFi and exit your position easily.
- Simplicity: this depends on the service you use but, generally, LRTs should be easier than native restaking.
- Spread restaking risk: LRTs can restake across protocols. Even if something is wrong with one protocol, this doesn’t put your entire position at risk.
- Exposure to multiple yields: as LRTs restake on multiple protocols, you collect yields from multiple protocols simultaneously.
None of the LRT protocols have started fully functioning yet, but there are several teams already working on it, including:
As usual, being early matters. As time passes, more people will enter, and yields will go down. Also, EigenLayer and new LRT protocols don’t have a token. So, airdrops are waiting for you.
So, get on the trend before everyone else.
Double Your DeFi is Coming in November
The most intense DeFi training in the world is back.
We’ll host the 3rd edition of Double Your DeFi Cohort next month. We’ve been spending the past few months improving the program based on feedback from our previous students.
Here are a few improvements we made:
- Introducing Playbooks – These are complete, current, and step-by-step systems designed to give you a specific outcome.
- An exclusive Alumni Discord – After the cohort is over, you’ll be invited to private discord with several hundred DYD alumni students. No additional costs.
- Edgy’s Degen Deep Dive – Edgy will conduct A-Z research on a brand new protocol. And he’ll do it within 48 hours of the session so you’re learning about the latest.
- Narrative and Catalyst Trading – We have a new module dedicated to trading based on narratives, catalysts, and making the most of market cycles
- and much more.
All this so that you can level up without the pain. And so that you can shorten the learning curve before the next bull run.
By the course’s end, you’ll know everything you need to make it in the coming bull run. Now’s the time to learn before the bull market’s here.
We filled up at max capacity last time, so don’t procrastinate.
Small Portfolio Strategies
“What strategies would you recommend if I have a smaller portfolio? Like it’s under $1,000 USD“
Look, if you have a large portfolio you can stake Ethereum and disappear for a few years. But if you’re trying to “make it” with a smaller budget, you have your work cut out for ya.
First, don’t expect to turn $1k into 6-figures. It’s not 2013 anymore. It’s unrealistic and will only set you up for disappointment. But how you manage a smaller portfolio differs from a larger one.
Here are some strategies.
#1 Hunt airdrops
Airdrops can make a huge difference when you only have a small portfolio.
The Arbitrum airdrop was something almost all DeFi users received. More than 625k addresses were eligible. The average user received 1,852 $ARB. Even now, that is worth more than $1500 . That’s huge for a small portfolio! And quite a few people did well with the Arkham Intel airdrop.
Right now, everyone is running after airdrops from SocialFi protocols. A large percentage of activity on Friend.tech and Post.tech is following its airdrop. There’s also anticipation around a LayerZero airdrop, and various Layer 2s.
Airdrops can be lucrative, but be careful. Way too many threadboys out there exaggerating things for engagement bait. It does cost time and money to bridge, use dapps, and deposit funds. Be strategic.
#2 Increase your cash flow
Let’s say your goal is $1M in crypto.
It’s far easier to start with $100k and 10x your portfolio than to start with $1k and try to 1000x trade your way to $1M.
I’ve already written about a few online side hustles you can start. If you want a job, here are some non-technical skills that’ll pay a lot:
- Ghostwriting tweets
- Marketing for protocols
- Bug bounties
What should you do if you don’t have any skills? Uhhh…invest time into learning some.
#3 Invest in higher-risk tokens
This is NOT me giving you the go ahead to invest in shit coins.
Let’s say you have $3k to invest and dump it all into ETH. Even if it 5x from here, that’s not life-changing money for most people.
Old blue chips won’t give you fast returns. (They still have their role in a solid portfolio though)
And you’ll probably have to wait for the bull market to peak to achieve that 5x. By then, you’ll have missed several solid 10x+ opportunities.
So, find higher-risk gems that you have conviction in. Here are just some of the ways that you can find gems:
- Private groups
- Watching whale wallets
- Focusing on a subsector
- Onchain metrics such as $ inflow
- Trending dApps on upcoming chains
- Some accounts focus on lower market-cap coins
- Rotating to take advantage of ecosystem incentives
Develop your own systems for identifying gems. Alternatively, join us for Double Your DeFi where we teach our systems.
A key principle: concentrate to grow and diversify to preserve.
Investing in 1-3 projects is too risky – a rug pull or exploit can easily wipe your entire gains. I recommend investing in around 4-6 projects starting off.
#4 Laser focus on a subsector
You have limited energy.
If you’re a solo investor, you won’t be able to follow all crypto sectors. Instead, laser focus on one subsector that you really believe in.
This may sound like a cliché, but we are still early. Not many people understand the DeFi mechanics in a lot of detail.
Friend.tech is such an example. It is an entirely new game. If you had seen it come and mastered it, you’d have made a lot of money. All the top 10 FT users (ranked by realized profits) have made more than $136k USD.
Find a sector and master it.
A few good ones now: Dex perps, GambleFi, SocialFi, AMM’s, etc.
#5 Be frugal and save fees
A penny saved is a penny earned.
There are many ways to save money in DeFi. Find and use all of them.
- Use cheap chains like Layer2s and Solana
- Bridging or swapping? Research the cheapest ways
- If you use Coinbase, Coinbase Pro comes with cheaper fees
- If you’re on Binance, holding BNB tokens can lower your trading fees
- On ETH mainnet? Monitor the gas fee and time your transactions to pay as little as possible
- Use discount and affiliate programs (for example, HMX Protocol ) that protocols offer.
These are just a few strategies to adopt when working with a small budget.
DeFi is a once-in-a-lifetime opportunity. But it won’t be around forever. Regulations and institutions are coming, and we’ll lose our edge now.
So, create generational wealth when you can.
🚀 DeFi Catalysts
Mountain Protocol shipped the USDM pool on Curve. It is regulated from Bermuda, and passively pays you the US T-Bill rate.
ApeCoin DAO received a proposal to develop a zk-L2 chain utilizing the Polygon CDK from the Polygon Co-founder, Sandeep Nailwal.
Synthetix Protocol can now be accessed from Telegram using a bot, Atlanteen. This will increase the accessibility of Synthetix.
Mars Protocol V2 is officially live on Osmosis. It introduces a new DeFi primitive to the Cosmos: Rover credit accounts.
Euler Finance has announced its V2. Its v1 suffered from a devastating hack and lost most of its TVL. V2 is a comeback attempt.
Instadapp introduced an evolving protocol named Fluid. It is in the testing phase and is aiming for a January release. It claims the highest capital efficiency.
Timeswap announced its token premine. It is the first oracleless lending/borrowing protocol.
Manifold Finance has rolled out a new MEV protocol to capture value for validators. It is integrated with mevETH, an LST.
Lido DAO is discussing Hasu’s GOOSE submission. It is a comprehensive 1-year and 3-year plan for the LIDO DAO.
Frax Finance released the v3 documents. Frax v3 will be able to thrive in both high & low-treasury interest rate environments.
MakerDAO is offboarding RETH-A vault type, totaling 26.14 million in DAI debt. The founder, Rune is citing costs as the reason. Many are criticizing this move.
Gearbox Protocol is discussing the tokenomics redesign of its token, $GEAR. They want to bring value to $GEAR beyond just governance.
Solana‘s latest upgrade introduces “Confidential Transfers”. It enhances user privacy with encrypted SPL token transactions.
📰 Industry News
JPMorgan’s Tokenized Collateral Network (TCN) has gone live. It is a blockchain-based app that allows clients to use tokenized assets as collateral.
Bitcoin can potentially have smart contract capabilities. A whitepaper for BitVM proposed a method for Turing-complete smart contracts in Bitcoin.
Circle has rolled native USDC on Polygon PoS mainnet. The official support for bridged USDC will be discontinued from Nov. 10, 2023.
ThorSwap temporarily paused its front end after the FTX hacker transferred funds through it. They are working on creating address screening.
Binance shipped the copy trading feature. You can now replicate the trades of some of the best traders on their platform.
🧠 Twitter Alpha
- The DeFi Quarter 3 rewind.
- Introduction to Pendle Academy.
- Summary of the FRAX v3 upgrades.
- A Great Depression Worse than 2008: takeaways from Hayes.
- Security tip: how to accept files from strangers?