2021 was the year that changed my life forever. I was fortunate, and lucky, to be part of an adventurous crypto bulls and launch a DeFi fund. Our original fund thesis was simple - DeFi will suck in liquidity because Ethereum and emerging Layer 1 blockchains enable anyone to store assets that generate yield. Make sure you read my 2022 bold predictions to see where I’m focusing my capital now. Our original thesis changed as fast as your favorite NFT influencer’s profile picture…weekly. This is due to the constant technological, governance, tokenomics, and ecosystem innovation in the Web3 space. I never worked so much and also never had so much fun as a professional as the year 2021.
Here’s what I learned as the CIO of Titan Moon Fund, and I hope this helps inspire some of you to apply the knowledge or ask questions about how you can get involved.
Build conviction in your investments before deploying capital. This requires days of up front research, modeling, and peer review. This makes it much easier to average in when price goes down. It’s much harder to average out when price goes up…more on this later.
Tax loss harvesting is powerful in a volatile market like crypto. We all like to believe digital assets are ‘up only,’ but on short time frames (e.g. one month) cryptoassets can decrease by more than 60%! Assuming nothing has fundamentally changed with the asset, these draw downs are a good opportunity to sell at a loss and buy back to offset any other gains.
Get deeply involved with your investments. Follow their Twitter accounts, follow project activism and DAO governance, join Twitter conversations and Spaces, and follow Discord and Telegram announcements. Tons of high value information can be garnered in these arenas.
Share alpha and spread information about your market perspectives, where DeFi could get better, or your opinion about a new project you come across. All of this helps grow the pie. As we transition towards a decentralized world, we are all owners of the protocols and tokens we invest in, thus it’s our collective responsibility to evangelize and educate new entrants. Personally, even with a very busy schedule, I have remained active with writing for Ethropy, hosted monthly community calls, and opened up my Discord to anyone crypto curious.
Never hesitate to ask questions when you are reading a Medium or protocol documentation that is unclear. This is the most welcoming and inclusive investment opportunity and community in history.
Everything your boss taught you about time management doesn’t apply to crypto. This is a game of players, builders, and investors across the world and all time zones. Be ready to act at any time, learn how to multitask, and good luck staying on schedule or organized! The ‘intern’ role has taken off in crypto thanks to the chaos.
Trading in DeFi > OTC. Many tokens have superior liquidity depth, faster token listings, less slippage, and lower fees. Not to mention you never have to wait for a DeFi protocol to respond to a Signal message or email…speed is critical in this space.
Be patient and opportunistic. This is probably the biggest advantage crypto native funds have over a passive investors. We are glued to the daily drama of crypto Twitter, have our crypto Discord tribe sharing happenings, and are well positioned to act when a protocol stealth launches, a good token dumps, or a new NFT project drops.
Surround yourself with diverse opinions. A good team is able to trust, challenge, and leverage each other based. My Team often disagreed, but opinions were never discarded flippantly. We debated and almost always came to a collective decision. When we were right, we celebrated, but when we were wrong we learned and never kept score. I’m extremely fortunate to be part of a team with a high locus of control, personal accountability, and ambitious self-starters.
Thanks for reading. Part 2 will cover challenges!