3 Cryptocurrency Making Their Way Back to The Watchlist
I ditched them in the past, now they look attractive once more
Investing in crypto sometimes feels like being in an on-and-off relationship. I have a strict rule when it comes to selling -I don’t like parting with my coins. One of the few conditions, when I have to sell, is when I stop vibing with the project. Such as when the fundamentals changed and in short, the project is too ngmi in my eyes.
But sometimes the opposite happens. The project I broke up with in the past started to look attractive to invest in again. Plus the current bear market comes with its special blessings: Many coins are becoming fairly valued as prices head lower.
If the typical “mini monthly cycle within a cycle” plays out again in the upcoming weeks, there’s a huge chance I’m gonna deploy this accumulating strategy I’ve been using for the past couple of months. Now with a new focus, hunting the following coins at the most attractive price possible.
dYdX ($DYDX)
dYdX surprised everybody on CT a week ago by announcing their own chain. Many people, especially Ethereum maxi, didn’t take this news quite well. You’d hear the phrase “Abandoning Ethereum” followed shortly with a link to 3AC bankruptcy — implying the same demise would also happen to dYdX. Quite dramatic all around.
The trading platform, running on Starkware, an Ethereum layer 2 solution, was one of the stars of my Ethereum Layer 2: Overpromise, Underdeliver article a while ago. I voiced my problem regarding their crap tokenomics, profit sharing, “equities”, and the general ‘centralized’ business model, which made them practically just another silicon valley web3 startup.
I know that some of those decisions were regulation-related, being based in the US. However, the announcement also revealed how Layer 2 technology also limits them to do a lot of things.
Having their own chain will let them break free not just from regulations but also from Ethereum layer 2 solutions limitations.
Here are some potentials.
- Owning every part of their code and making it open source. dYdX said they are aiming for ultimate decentralization. Starkware is a centralized solution. Their code isn’t open source. By not using Starkware, dYdX is saving a lot of headaches in the future from having to deal with licensing or paying royalties part. Just simply focusing on the product.
- Create utility for dYdX tokens, as the new chain, a POS Cosmos chain, will give the opportunity to tokenholder to stake on validators and earn yield. (Profit sharing while still being Gensler-approved.) What about token inflation? They can always use buyback and burn with fees. A nice workaround to distribute value back to tokenholder without triggering the security law.
- Being as ambitious as they can be. dYdX is aiming to have features and performance on par with CEXs like Binance. They probably have experienced firsthand how Ethereum layer 2 is not performant enough to keep up to their vision. Just recently, Arbitrum is down and has a more expensive gas fee than Ethereum mainnet.
It’s worth noting that dYdX currently is in the top 3 based on accumulated revenue, despite the unattractive tokenomics. dYdX is a solid business, and still has a lot of potential for growth. Imagine it being indistinguishable from Binance, having varied trading services and crypto products, all while being fully on-chain.
The DYDX chain still has a long way to go as the launch is scheduled for 2023 (I expect more delays.) But prices these days are simply irresistible for DCA entries.
Cosmos ($ATOM)
Did I mention that dYdX is moving to the Cosmos ecosystem? Basically like putting salt on the wound of Ethereum supporters. dYdX isn’t creating from scratch, but taking advantage of the existing blockchain development template from Cosmos and possibly attaching itself as one of the zones under Cosmos Hub.
People have been saying dYdX move will have no effect on the price of $ATOM — the coin did rally after the announcement. I’m afraid they are seeing things from the wrong point of view.
dYdX move sent an important message — Or here, we could call it ‘alpha.
The move signals that Cosmos is worth checking as the solution for scalability. The main reason for dYdX move is that the team doesn’t feel satisfied with the current capability of Ethereum rollups. It sends a message to other dApps planning for their dApp’s future scalability. dYdX won’t be the last to make a move to Cosmos.
Not to mention, as the biggest, most prominent dApp running on Ethereum layer two, the team's decision to move can help discourage maximalism, something Ethereum is notorious for (which in part, makes devs reluctant for multichain.) Robust competition is needed for the industry to grow. Just build on the chain offering the best solution.
dYdX chain marks the era of 1. Modularity, 2. Appchain (Fat app > fat protocols). All in line with what the future of crypto might look like.
Cosmos fulfill this thesis nicely. Moreover, staking Cosmos often lead to airdrops, an opportunity worth considering as the ecosystem welcomes more dApps in the future.
I used to trade Cosmos back then when I wasn’t aware of the ecosystem potential. Once I became more well-informed, the price had reached overvaluation due to the bull market. It’s not been the case lately as valuation now makes more sense than a few months ago.
Cosmos price still could be cheaper now, I hope. (another 60% off please until it reaches my 2020 buy). But even, for now, it is not bad to start DCA.
Solana
Out of these three cryptos, Solana ($SOL) is the closest you can get to investing in a very “meme-able” narrative-driven asset.
Solana is an ‘interesting’ token. It can be hard to figure out, but when you do, Solana can be rewarding. There’s a reason why this asset is popular among traders — remaining to capture a decent daily trading volume too despite the market slump.
If you’re active in the crypto community, you might have heard about the notoriety of Solana and its ecosystem. Often it's overblown, once again with fire being kept alive by Ethereum community. Often I wonder to myself if my view on Solana was a result of prejudice, rather than from my own due diligence.
Just like dYdX, Solana also came with a head-turning announcement recently. Introducing Solana Mobile, basically a blockchain phone for Solana. Also, just like with dYdX, they receive a lot of criticism and mockery.
I really don’t like dismissing ideas outright, which has become a common sight among the crypto community lately.
In the case of Solana, actually, this announcement is worth noting (once again, alpha.) One thing to respect about Solana is its commitment to crypto mass adoption. Solana Mobile is just one more of their effort to do so, after NFTs, and Move-to-Earn Stepn. A lot of smart contract platforms in the world, but Solana is the only one that reaches overlooked crypto communities globally (i.e they do quite a marketing in my country and surroundings.)
Solana looks like they don’t just aim for DeFi — other blockchains are better for it — even though they’re technically a general-purpose blockchain. It’s their commitment non-DeFi part of web3 that’s worth paying attention to.
Despite the modular future of my thesis, I still predict that monolithic chains like Solana will not go away anytime soon. It remains an area of crypto worth following while we’re waiting for the modular technology to truly mature. Plenty of reasons for this, such as an established social layer, straightforward onboarding, and an already thriving developer community.
Remember that modular solutions still have a long way to go. Many projects also aren’t currently investable unless you’re a VC. Solana can be rewarding short to mid-term play.
So that’s the three coins I used to own in the past, have sold for various reasons, and started to look again. To be honest, many tokens have started to look attractive these days, and it’s hard to not get tempted to hoard them all.
However, patience is needed even more these days. The game is to be vigilant and keep stacking, all while staying solvent longer than the market is being irrational.
Disclaimer: Not investment advice. This article is for sharing and learning, just like my other articles too.