Designing a cryptocurrency portfolio

Discussion in 'Digital Currencies' started by mmm....shiney!, May 29, 2021.

  1. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    I came across the following article recently and thought that it may be of some use to members firstly, by categorising the different types of blockchain projects out there and secondly, by highlighting the largest individual projects within each category.

    https://messari.io/article/weekly-r...um=top&utm_campaign=weekly-recap-ending-may27

    I'm of the opinion that members could do worse than say buy and hold the top two assets in each category thereby creating their own diversified portfolio. Naturally for those with time and some crypto knowledge, you'd probably do some research on the projects and may end up choosing alternative assets that are further down the lists at the expense of those higher up eg I would be reluctant to hold XRP or DOGE as they don't fit my investment strategy, or you may decide that UNI is overpriced compared to SUSHI so therefore hold more SUSHI at the expense of UNI.

    I've broken this down into 2 posts so it doesn't present a wall of text, the first post looks at the project categories, the second at the tokens on offer.

    For those new to the crypto space or those sceptical of it and therefore maybe unaware of the extent of the technology out there, projects are categorised as follows:

    DeFi: financial services on blockchains that replicate the legacy banking industry eg borrow, lend, earn interest
    Currencies: tokens that are used as a medium of exchange just like government issued fiat
    Smart Contract platforms: self-executing digital contracts that do away with the need for intermediaries determining whether agreed conditions have been met
    DEXs: peer-peer trading platforms where you hold the keys to your own wallet, unlike centralised platforms like Binance or Coinbase that hold your assets on your behalf
    Web3: the decentralised global internet (or distributed global computer), unlike the current centralised version where companies provide access/services in exchange for your data etc

    If any one wants to clarify, correct or add to the above then they'd be more than welcome.
     
    Last edited: May 29, 2021
    Markco2, Ivykoin, nutshell and 5 others like this.
  2. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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  3. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    Unlike shares/stocks where say 20 - 30 companies would probably give enough diversification to protect an investor from sector downturns, the whole crypto market is fairly highly correlated, especially the top 2 BTC and ETH as well that some projects correlate with a couple of categories eg UNI and CAKE are both DeFi and DEX projects, and surges in DEFI projects often result in surges in the price of ETH, so I'd argue that 10 individual projects would probably be more than enough.

    So taking the top from each category you'd end up with something like the following:

    Screen Shot 2021-05-30 at 7.46.59 am.png
     
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  4. dozerz

    dozerz Well-Known Member Silver Stacker

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    missing layer 2 ethereum scaling category, i would be increasing my exposure on this over any other category, matic and link for example.
     
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  5. Markco2

    Markco2 Well-Known Member Silver Stacker

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    Good idea.

    I have tried to include one or two of the layer 2 scaling solutions such as PHA as Polkadot roles out it's parachain.
    Also see the big future in NFT's and DeFi becoming much larger as institutions take to adoption. I would also give an equal weighting for Cardano, Polkadot Solana and BNB. Chainlink will continue to grow. My favourite NFT is Redfox Labs. Even if they don't get the runs on the board in this cycle, I see them as one of the major growth areas during the next cycle. It's a buzz in the crypto space. When I get my password sorted out with Goldpelican I will look forward to posting a lot more. Still only have access from my beat-up old laptop at the moment.

    Cheers markco2
     
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  6. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    @Markco2, yeh mate I haven’t heard anything from @goldpelican as of yet regarding your password. There’s a couple of other issues I’d also like him to address so hopefully it won’t be long.
     
  7. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    So you’re saying that’s a sixth category?
     
  8. dozerz

    dozerz Well-Known Member Silver Stacker

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    its getting harder to slice and dice seeing as theres so much overlap. sushi also runs across multiple smart contract platforms now and quick isnt even listed.

    probably best to expand the smart contract category and include platforms like matic, avax and ftm then removing neo, atom, vet and trx. will need some constant updating as this space changes rapidly.
     
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  9. crewy

    crewy Active Member

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    Long term won't Matic/Polygon and all other layer 2 scaling platforms tank once Eth 2.0 is fully upgraded?
     
  10. dozerz

    dozerz Well-Known Member Silver Stacker

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    fully upgraded to what? layer 2 is just an extension of layer 1. as more layers get added it will become cheaper and plebs like us will not be able to afford to use layer 1.
     
  11. crewy

    crewy Active Member

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    Ow ok I thought polygon was popular because of high gas fees, which ethereum 2.0 is aimed to tackle? Im fairly new to the crypto world though and trying to work it all out.
     
  12. Gilligan

    Gilligan Member

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    No HBAR, ONE or GRUMPY? NGMI.

    grin...
     
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  13. Revils

    Revils Well-Known Member Silver Stacker

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    RPL (Rocket Pool token) - exposure to ether staking ecosystem.
     
  14. dozerz

    dozerz Well-Known Member Silver Stacker

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    not the only reason it is popular but is the main one. i think you ar referring to eip 1559 which will change the fee structure, but not reduce the fee completely and still wont be as competetive as layer 2 solutions.
     
  15. Revils

    Revils Well-Known Member Silver Stacker

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    RPL making some moves, I still think it'll go higher in October on full release. For reference it was about $11usd 3 months ago, $~31 now.
     
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  16. Revils

    Revils Well-Known Member Silver Stacker

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    Up to $37 now with 2-3 days before main launch.
     

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