Crypto portfolio update

Invested in: USDC, JEWEL

Net return: 497.2%

Comments: Last week, the poor macro-economic outlook and weak crypto sentiment convinced me to unwind my NEAR and CRA positions for a loss. To further reduce risk, I also liquidated more of my liquid JEWEL holdings.

4 days later, Russia began its invasion of Ukraine and risk assets took a hit upon the news. 

By then, thankfully, my portfolio was in a defensive position so I avoided much of the initial selloffs.

Interestingly, prices recovered almost immediately after. While the crypto market remained at generally depressed levels, their resilience given the deteriorating landscape was remarkable.

Could this mean that the crypto market has bottomed? There's no way to know for sure (except on hindsight), but the chances have certainly increased.

This said, I'm happy to maintain a defensive portfolio. After all, the global economy is on the brink of recession and the equity market looks to be falling off a cliff; If the latter continues to break downwards the crypto market will likely follow suit.

Current portfolio allocation:

If a crypto bull market has indeed begun, there will be many opportunities to hop on the trend so there is no need to rush; I'd rather risk missing out on an initial bull move than to risk getting caught in a protracted bear market.

In the meantime, I've been taking short-term trades to grow my stablecoin stack.

 DeFi Kingdoms

Users (30 days): 131.7k (+4%)
Transaction volume (30 days): $536.2m (-31%)
Number of xJewel wallets: 39,286 (+1%)
Discord members: 89.2k (+0%)

In the previous newsletter I speculated on the devs' metaverse plans for DFK. As it turns out, I was on the right track.

In last week's AMA, Frisky Fox and Dreamer started talking about it:

FriskyFox: "The metaverse — this is a huge part of the blockchain experience and having things from other games inside one game. We are for sure looking into ways to pull in other NFTs into our experience here."

Dreamer: "I’ve been talking to other projects on Harmony, and they’ve asked how they can use our NFTs in their game and how we can use some of theirs."

In the long term, this drive towards a shared metaverse is probably a good thing for DFK. 

In the short/medium term however, I'm concerned about player interest diverting to other currently more engaging games.

You see, though DFK had an early-mover advantage in the GameFi space, their growing ambitions resulted in the slow rolling out of engaging gameplay. After almost 6 months since launch, we have still not heard anything concrete about the main gameplay feature - combat.

Meanwhile, other less complex games like Crabada have produced a working version of their mining/looting mechanic and published a demo of their battle system, even though they launched months after DFK did.

I have a lot of respect for the DFK leadership, but am concerned that they might be discounting the importance of maintaining user engagement. People are not going to wait around for the devs to "do something" while there are other fun and lucrative games to be getting into.

For context, check out Ragnarok, Phantom Galaxies and Synergy Land (not endorsements, always DYOR). The quality of these upcoming games are impressive, and DFK needs to start delivering substantial updates to stay ahead of the competition.

Already, content creators that got popular talking about DFK are starting to talk about other games. This, to me, is a clear sign that the DFK is losing mindshare among its enthusiasts. I can only hope the core team recognizes the significance of this.

The way I see it, there is only one event that can re-ignite interest in DFK: the launch of a genuinely fun combat system.

Even if the Crystalvale launch goes well, players will still have nothing to do but participate in the mindless profession quests; A good combat system can be the saving grace of the deteriorating interest in the game.

TLDR: The goodwill earned by the DFK devs is eroding, players are losing interest, and the window for turning things around is closing fast. If nothing is done soon to address the lack of engaging gameplay, I fear the game will irrevocably lose its lead as one of the most popular crypto games today.

 More crypto thoughts

The war between Russia and Ukraine has seized up the financial systems of both countries; Russian banks are being banned from the international SWIFT system while the Ruble has collapsed in value. Meanwhile, Ukrainians are facing foreign currency restrictions imposed by the National Bank of Ukraine.

In other words, millions of people in both countries now find their financial future under threat, through no fault of their own.

So the people of Russia and Ukraine woke up one day to suddenly see the value of cryptocurrencies. For most, it's the only way to preserve the value of their savings, and to transfer it elsewhere without needing the permission of someone else.

Even governments themselves are coming to see that the fiat monetary system can be used as a geopolitical weapon to coerce a nation.

The logical outcome is that most countries will end up holding some amount of crypto in the name of national interest. The worldwide adoption of crypto continues to grow.

Admin update

• New video: My crypto farming playbook
• If you missed the previous newsletter, you can read it here.

 Quote of the week

It is possible to commit no errors and still lose. That is not a weakness, that is life.

- Jean-Luc Picard

Thanks for reading, and have a great weekend.

Cheers,
Slowmad

P.S. If you have any questions or feedback, let me know at: chris[at]digitalslowmad[dot]com

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