🎧 How to Create Your Own Alpha in Crypto
Round Table Recap: May 8th, 2023
In this Twitter Space recap, we dive into the insights of 2Lambro (“2L”), an anonymous crypto enthusiast with experience since late 2019/early 2020.
From his initial interest sparked by friends to his setbacks in FTX and subsequent recovery, 2L shares his perspectives on crypto, DeFi, GameFi, and trading strategies. He highlights the importance of narratives, yield maximization, L1 vs. L2 battles, and resources he relies on. Additionally, he touches on his bullishness on BTC and ETH, portfolio allocation, and project valuation approaches.
You can listen to the full audio here.
Keep reading for the key takeaways 🍿👇️
2L is anonymous on CT and has been around crypto since late 2019/ early 2020.
He got into it because of close friends who were involved.
He got into DeFi and GameFi space during the bull runs.
2L explains how he got extremely wrecked in FTX, putting a lot of his capital into FTX.
Following this, 2L had to mentally recover from being motivated to get back into the space.
He now shitposts on Twitter, lol.
🎧️ 2L’s crypto journey 👇️
What got you interested in crypto?
2L explains how he was involved in BTC very early, but he only correctly invested once ETH and decentralised money came around.
He saw BTC and ETH as ‘controlling your own money’ and liked crypto's prospects and opportunities.
He gives an analogy where his mother provided him with a sticker that he could ‘trade’ for an item such as a PlayStation.
He compares this to fiat currency being diluted by the US government and how his stickers, over time, would not be worth the same as, let's say, a year prior.
2L explains how he sees BTC, real estate and stocks as a replacement for fiat in his opinion.
🎧️ 2L talks about what got him hooked on crypto 👇️
Within the crypto space, is DeFi your most significant focus?
2L emphasises how his main focus is what brings the most ROI, whether DeFi or Gamefi.
He explains how narratives are his most important focus.
He talks about how he made good returns on Axie when the NFT space was popping off.
2L talks about how real yield was a real narrative during the bull market.
Currently, 2L explains how he's bearish and mainly in stables.
He keeps 70-80% in stables and gambles 10% on small valuations, new ecosystems etc.
Is there more alpha in L1 or L2 battle?
2L talks about how the best way is to take advantage of the incentives given by the L2s.
He utilises OP as an example, stating how it launched right before the FTX collapse and explaining how incentives heavily funded the ecosystem.
2L talks about how farming with BTC and ETH is a good route to go with L1s.
Furthermore, 2L mentions unsustainable valuations in this ‘fake’ bull market.
🎧️ Views on Layer2 vs Layer1 alpha 👇️
When trading, what are your ways of getting alpha?
2L states it's very important to write out your preferred market direction.
He emphasises how you need to specify potential narratives in different sectors and search within that.
2L uses this when identifying current L2s that have greater than $50m TVL.
Moreover, he talks about how people need an edge when trading and also monitor VCs and where capital allocation is going.
🎧️ How 2L gets alpha in trading 👇️
What are the resources you utilise?
2L explains how he monitors Illuminati’s newsletter consistently.
He also mentions Crypto Lane, DeFi llama and more.
He follows this list systematically as well as using Medium, Substack and more to stay in the loop and educated.
What sector are you bullish on?
2L says his current idea is to maximise his yield the best he can relative to delta data.
As a true believer of BTC and ETH, 2L explains how he is happy to buy as the price drops.
Furthermore, 2L talks about how a good portfolio split is 30/30/30 in stables, BTC and ETH, with the last 10% being degen plays.
He also emphasises how a DCA strategy is most effective in the current market.
2L mentions how his recent explorations have been on perp exchanges, real yield and other smaller market cap projects.
2L mentions how real yield on the LSD side back in the day provided the exchange between ETH and whatever derivative ETH where you would earn the trading fee.
When LSD market came out, investors took advantage to squeeze and manipulate the yield.
🎧️ 2L’s views on crypto rotation 👇️
Macro events and CBDCs:
2L talks about macro events being very correlated to the market; however, timing these events and their effects do not affect 2L significantly because he is not a short-term trader.
Towards the DeFi market, 2L is short-term bearish and long-term bullish on it because he does not believe adoption and composability will be the same.
2L says he does not believe CBDC will make a difference unless it's confirmed that you require KYC to utilise it, or else DeFi will stay the way it is.
🎧️ Impact of CBDC’s on DeFi 👇️
What do you look at when valuing projects?
2L utilises a comparable model when evaluating projects.
He looks at FDV with DEXs or perp DEXs.
Furthermore, he uses TraderJoe as a benchmark for DEXs and does similar with other long-term projects.
For the short term, he simply researches utility and market cap.
🎧️ What 2L looks at while valuing a project 👇️