Making comparisons through metaphors can be very helpful with just about anything. The one I use quite often is learning a new language. Deep immersion tends to be the most effective learning tool overall. That leads me to - The Unbanked Series - When You Start to Learn About Liquidity Pools (Thursday).
What is a Liquidity Pool?
While this may seem rudimentary in nature, having a foundational view will yield better results in the long term. There are similarities overall with the non-crypto markets, but in general the crypto space is an incredible ecosystem where a liquidity pool can thrive.
The challenge facing many start-ups and newer projects is two-fold.
First, in order to overcome the seemingly never ending bootstrapping requirement, there is a huge need for Liquidity.
Second, the challenge overall is the illiquid nature of the initial blockchain ecosystem, thereby seeing larger volatility from smaller movements.
To address this issue overall while still retaining the innovative prowess in the crypto-space, liquidity pools have been developed. Many of which are riding on the Ethereum blockchain.
Liquidity pools are thus a bellwether of maturation for decentralized cryptocurrency markets. -Matthew Prewitt (https://www.coindesk.com/decentralized-liquidity-is-the-backbone-of-defi)
Currently a handful of competitors are jumping out in front which include:
There are a handful of others that you can see from the article linked above in the quote, but they are all moving in a similar direction.
How does this affect you?
On the surface, if you are like many of the people who see a token or project you're interested in and are looking for a 5x, 10x, or 100x return, you will probably stop reading. I truly hope you continue.
Here's the thing, the DeFi space (Decentralized Finance) is growing at an eye popping pace. Everything from flash loans to creative staking is being explored on all levels. What I have found incredibly amazing is the different ways to connect information and what it means to you.
While the days of big gains and massive shifts are far from over, it seems that the unicorns have moved into a different pasture. Check out this video from Chico Crypto as he walks through a research process while looking at sBREE.
It's not a pick by any means, so don't run out and grab it just because you read it here. The point is look at the process he goes through and the different tools he his looking at across Uniswap, PoolFYI and even basic web searches through leGoogle.
Two Points to Keep in Mind
If you're like me, there is a little more time needed on the upload. Intellectually, I can follow and track everything that is happening, but it is that critical next step that moves you to action which can make or break what you are attempting to do.
To help out with how you're thinking about things, I want to share two points that I keep in mind whenever I am looking at something like this. Well, actually two points plus a bonus.
POINT #1 - The value is in the process. It is easy to get wrapped up in the actions or tasks for any grouping of what you're doing. The real value is in the process of what you are doing.
For example, when you look at ChicoCrypto's process, whether you like or dislike it, there is value to understanding the movements. From there you can adjust.
POINT #2 - The second point is consistency. Have you ever gone to the gym 1 day on a certain week and 5 days during another week? What were the results? Sporadic at best I suspect.
The same holds true with DYOR and how you approach what content is being consumed and / or analyzed. It is easy to run down rabbit holes in many different directions in what feels like parallel time. The HUGE upside is being consistent in your approach.
Your monitoring and adjustments will be easier in the long term.
BONUS - Here's the diamond in the tall field of data. Being DELIBERATE & DECISIVE will give you an edge above your competitors, peers and friends.
Just remember the deliberate and decisive does not mean eternal. With the best information you have right now or expect to have very soon, deliberate and decisive means a.) making the turn, b.) pulling the trigger, or c.) taking massive action.
If you need to adjust, then adjust. Steady, consistent execution of your process will leapfrog you ahead, further, faster!