🎧 Arbitrum Vs. ETH: Toilet Analogy
Round Table Recap: April 7th, 2023
This Twitter Space recap features Jeff, who shares his experiences investing in crypto, particularly on Arbitrum.
He discusses the benefits of Arbitrum's network scalability and TVL for DeFi innovation and highlights projects like GMX and CamillaDEX as blue chips.
Jeff advises caution when investing in low-caps and suggests filtering projects based on DEXs, TVL changes, and tokenomics.
He emphasizes the importance of managing one's portfolio and taking profits early.
You can listen to the full audio here.
Keep reading 🍿👇️
Jeff has been in crypto for around a year and a half.
He started his journey at the bull market’s peak in November 2021.
He got in initially due to the hype in DeFi and also the ponzinomics in the space.
Even before this, he was a venture capital guy in Thailand working with early-stage founders to raise funds.
He worked to raise capital for C-stage VCs at the time.
Jeff was curious during raises about the crypto projects and was then pushed to look into the space.
He saw projects with high APY and saw his investments generate insane returns. Seeing this in person made him risk more of his capital.
Jeff says that following this, the market tumbled and humbled his experience in the space, but it didn’t dampen his outlook.
He looked more into the space and at fundamentally strong projects.
He says that even then, he still partook in pump-and-dump hype projects that raised 100-500ETH successfully, investing early and taking profits as quickly as possible.
This enabled Jeff to compound his investment. It’s important to note that Jeff states he chose projects that were doxxed, adequately audited, and relatively safe.
He says a specific investment $KASTA provided him with 8x, which turned his initial $7000 into $50,000.
🎧️ Exploring The Crypto Rabbit Hole: A Venture Capitalist's Journey 👇️
Arbitrum vs ETH: The Toilet Analogy
Jeff uses a toilet analogy where a toilet is used for many purposes.
He says that people want to piss, but someone who wants to shit and is in the toilet stops those people from pissing.
He says Arbitrum adds the urinals to the overall toilet to allocate the stress on the network, while Ethereum is like one toilet stall.
Jeff explains that DeFi innovation is prominent in Arbitrum based on network scalability, TVL, and more.
He states that the TVL didn’t drop as much as people expected after the airdrop.
Garlam himself agrees that Ethereum has so many options but doesn’t provide smooth options being expensive, etc.
On the other hand, Garlam says Arbitrum is geared to many sectors, whether traders or the broader ecosystem.
Jeff emphasizes that he believes blue chips moved to Arbitrum for this reason.
He says GMX has established itself and scaled on Arbitrum to make its protocol successful.
🎧️ Audio clip for the toilet analogy 👇️
Jeff states that the model GMX has pushed to the space is innovation in general.
He states that we traditionally have the LP where you put in 50% of token A and 50% of token B for investors to use. He further says that this isn’t efficient to use as you can experience impairment loss.
Jeff explains that the investor gets slippage on this, while GLP is a basket where people are staking different assets and receiving GLP in return.
He further says that GLP uses oracles to help balance out the price of these different underlying assets and that the critical points of GMX are that you are trading perps without affecting the asset’s underlying price.
Jeff says if the liquidity of the asset’s order book is strong, the price is strongly mirrored onto GMX.
🎧️ Exploring GMX Money Markets for Profit Opportunities 👇️
Blue Chips People Should Pay Attention To
Jeff says that CamillaDEX is a project he’s been consistently looking at.
He further states that the tokenomics differed from other DEXs he saw.
It utilizes the XGRAIL mechanism to curb the selling pressure and enable a low circulating supply.
Jeff says there is a higher incentive model for the stakers.
🎧️ Investing in Blue Chip Tokens A 5 Minute Guide 👇️
On Low Caps and Farms
Jeff says it’s not always that he finds excellent projects and sometimes experiences terrible decisions and bad finds.
He emphasizes when looking at low caps, overall market conditions hugely impact price volatility.
He says choppier markets, as we have now, means there is more risk and less reward for investors.
Jeff says that, especially on Arbitrum, because the market narrative is uncertain.
Jeff says it comes down to managing a big part of your portfolio too.
When investing in micro caps or low caps, do not put a significant % of your portfolio into a low or microcap.
He says that although it may tempt you in terms of bringing you a huge return, the risk outweighs everything from his experience, and you do not want your hard-earned capital to be gone so quickly.
Jeff says that on Arbitrum micro caps, he does not utilize any particular type of tools that others are not using. However, he suggests DeFi Llama and on-chain sites explore and familiarize yourself with.
Moreover, Jeff says he filters projects by looking at DEXs, new protocols listed on Arbitrum, TVL changes, and tokenomics to evaluate the project.
Jeff states that trading low-caps involves identifying the market narrative early and taking profits when others are greedy.
🎧️ Exploring Low Cap Crypto Tokens Key Insights and Strategies 👇️