Digital Slowmad newsletter
24 December 2021
Crypto portfolio update
Invested in: Jewel (JEWEL), Luna (LUNA), Ether (ETH)
Net return: 473.6%
Comments: Over the past few weeks there's been a pivotal shift in fundamental outlook of DeFi Kingdoms (DFK). The community has grown substantially (40k Discord members!), engagement has increased, and increasingly large amounts of funds are flowing into the game.
Notably, the transaction volume has dwarfed that of Axie Infinity. This is the first objective measure that points to DFK becoming "the next Axie Infinity".
Personally, I think DFK is going to be more than just the "next Axie Infinity". I think it's going to be the first cross-chain DeFi application with a real value proposition beyond yield farming.
DFK is truly special, and I'm not the only one that realizes this. While the rest of the crypto market is broadly down (even BTC and ETH), the JEWEL token is being bought up like hotcakes, pushing its price to consecutive all-time highs.
With almost all my capital allocated to DFK, my portfolio has grown accordingly.
I am on the lookout for other applications/protocols/platforms to invest in, but struggle to find anything that rivals the attractiveness of DFK; I suspect it will be a while before I find another project with a similar risk-reward proposition.
My portfolio allocation remains largely unchanged, with most of the funds held in the form of DFK heroes. The only noticeable difference is that I've sold out of my AVAX position in favour of more JEWEL and LUNA.
I am generally comfortable with this allocation, though I'd still like to to reduce my exposure to DFK heroes to keep things a little more balanced. For now though, the hero market is quite weak, due in part to the rocketing price of JEWEL, and in part to recent Harmony RPC issues. I'll hopefully be able to give a more concrete update about this soon.
My view on DeFi Kingdoms
- The recent JEWEL price surge has paralyzed the hero market, as the number of heroes being summoned and purchased fell off a cliff:
statistics from DFK Wiki
- Players are, understandably, unsure about the rapidly rising JEWEL price.
- Two weeks ago, a Gen-1 hero cost $400 to summon. Today, that cost has doubled to $800.
- This new paradigm has affected the mindset of many; The stakes of playing the game has effectively doubled... and when the stakes go up, so does fear.
- For many, it's hard to justify "spending" $1,000 on an entry-level hero, especially when the dynamics of 'play-to-earn' are not well understood.
- Most people are familiar with the idea of exchanging time for money (i.e. at a job); They are not used to the idea of exchanging money for more money (i.e. business, investing, play-to-earn).
- The surging price of JEWEL can therefore seem very illogical to those new to the crypto space. It's the same little-understood phenomenon that leads to simple JPEGs like CryptoPunks being priced at tens of thousands of dollars or more.
- In my view, the "high" price of JEWEL is reasonable as long as player adoption continues to grow.
- With the upcoming expansions to 4 other blockchains, I believe the price of JEWEL can maintain at elevated levels for longer than some might imagine.
- In one of my earlier videos I theorized that JEWEL might reach $50. Recently, a highly-regarded member of the crypto community has predicted a price of $100 within 12 months.
- All in all, I'm not at all worried about the current fears about the "high" JEWEL price. Six months from now, people will look back at how "low" JEWEL was at $14.
- My plan is to continue summoning and buying/selling heroes as per normal. The way I see it, the fundamentals have not changed. In fact, what's happening right now is just as I had expected... it's why I allocated practically all my capital into DFK in the first place!
- The game mechanics are extraordinary, the developers continue to ship, and the community is growing quickly. The only stance that makes sense here is bullish.
- Paperhands will paperhand.
- There will always be people who get scared no matter what happens. When the price goes down, they worry about getting rugged. When the price goes up, they worry that the price isn't sustainable. In all cases, they can't stomach the changing tides because they either have not done their research and/or have no conviction in their views.
- All this being said, I am not a perma-bull. There will come a time when it would be sensible to start taking profits. I just think that time is not yet here... far from it, actually.
- With the upcoming Avalanche expansion in Q1 2022, and 3 more expansions on the way, I believe we have yet to see a proper price rally. The best is yet to come, and I intend to stick around until the REAL fireworks begin.
Opera Singing Cockatiel
This... is so amusing:
Thank you for reading, and have a great weekend.
P.S. If you have any questions or feedback, let me know at: chris[at]digitalslowmad[dot]com
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