I hope many of you were able to enjoy ten chapters from my first yield farming e-book, each chapter released as an article on this platform. I'm not going to release the chapters from my second e-book, however, I will give you a peak into my strategy which is a key component of this book along with step-by-step instructions on how to execute this strategy.
As the crypto winter looms, it is a good time to re-evaluate your current strategy and position yourself correctly for when we do eventually return to a bull market. As you know, there are currently over 20,000 cryptocurrency coins and tokens in circulation, but which ones should you focus on? For me, this is a fairly simple and straight-forward answer that starts with the question - which of these are still going to be around in a year? Two years? Five years? Ten?
If you are not sure if a coin is going to be around in the future, why are you messing around with it?
There are only three coins I feel very confident will be around for the long haul. Please understand, this does not mean these will be the only three coins in my bag (or MetaMask and Ledger wallets). I do hold other coins for gas fees as needed or as part of a project that will ultimately help me build up these three coins. This is because my strategy also includes projects that help support my three coins of choice by building them up rather than just holding each of them for their eventual price appreciation.
My Three Coins of Choice
This isn't going to be any big reveal and the projects that follow later may be of more interest, however, we do need to start here. These coins are the bluest of the blue chips, the cream of the crop and the three coins that I believe will be around for the forseeable future.
Bitcoin - the grand daddy of all cryptocurrency. The "store of value" coin and digital gold. You simply can't have a crypto portfolio that doesn't revolve around BTC. Bitcoin is worth more than 40% of the overall crypto market and it therefore gives you a good overall exposure asset. Some might argue this is the only coin you need, I'm not that much of a "maxi" myself but do see their point to a degree.
Ethereum - the utility play in the crypto world. The network that has spawned an entire ecosystem of DeFi projects that sit upon its code. The coin that at some point in the future becomes ETH 2.0. As Ethereum goes, so does most of the ERC-20 tokens and at 14% of the overall market, like BTC, it acts almost as an index fund but in this case to "alt coins".
USD Coin - if you are looking for a stablecoin, this is the choice. USDC is a top-ranked coin that is gaining market cap quickly due to its dollar and secruties backings which makes it more dependable in the long-run than Tether which has a "shady side" to it that I simply can't shake. USDC is currently the fourth-largest coin with over five percent of the total market cap and it is closing on Tether's third spot quickly.
Combined these three coins account for over 60% of the total crypto market. You get the long-term upside of Bitcoin and Ethereum, along with the stability of USD Coin which also will help lower the volatility of your overall portfolio.
My crypto strategy is based on a portfolio built on having 95% of it in these three coins or projects exposed to these coins with the remaining 5% for other coins and DeFi degen plays. You own strategy should also have a very large portion allocated to these coins, however, how you break down each of the three in percentage terms will depend on your personal preferences and risk tolerance. For those with a lower risk tolerance, you should have more allocated towards USD Coin.
Project #1 - USD Coin Play - Dex Finance
The project I'm focused on currently on the USDC side is Dex Finance. This is a tomb fork project on the Binance Smart Chain with an ecosystem built around USDC. All of crypto is risky and DeFi projects add another element of risk, but given the stability of USDC this project is likely the least risky of the three that I will be presenting.
Dex Finance offer a yield farm that creates and liquidity pool (LP) token using USDC and its own native coin, USDEX, which is pegged to USDC. Since the two coins are pegged, there is limited impermanent loss risk. As for a stablecoin yield farm, it offers a return that is currently around 400% APR. I'm a huge fan of generating returns like this on coins that aren't going down in the current bear market.
You earn another token, DEXSHARE, from the farms. These can be staked in their REGULATION part of the ecosystem to earn more USDEX at very high return rates when USDEX is above peg which it almost always is based on my experience. There are many more parts within the ecosystem including ETFs, BONDs, IRAs that I will be exploring as I build up my assets within the Dex Finance Farms and REGULATION.
Project #2 - Ethereum Play - EMP Money
The project I have enjoyed the most as an Ethereum Play is EMP Money. It is also a tomb form project on the Binance Smart Chain as I really enjoy these ecosystems and like DeFi projects on BSC due to the low gas fees. This is personally the DeFi project I have the biggest stake in and I will take the profits earned from here and invest in other projects like I did with Dex Finance. Once you understand one of these tomb forks, you will quickly grasp the others.
I started here with their EMP-ETH farm which is another pegged coin yield farming play. These are a large part of the yield farming strategies laid out in my second e-book (both will be released in a few weeks). I'm involved in three key areas of this ecosystem including the farms, the BOARDROOM which is like the REGULATOR for Dex and pays out EMP, along with the DETONATOR. This third area is unique and functions like a DRIP protocol where you can stake EMP-ETH LP tokens, getting back up to 1% daily up to 365% total (or more if you compound). This feature is the platform's 'secret sauce' as it has a daily lottery component that pays out to two winners - the daily largest depositor and one random depositor. With each winning 1% of the total DETONATOR pool, each winner is currently receiving around $35K which is a huge motivator for people to keep adding deposits.
There are many more features which you can find in the article I wrote back in April or in their EMP academy.
Project #3 - Bitcoin Play - Hydro Whales Mining Club
The BTC play is called Hydro Whales Mining Club and is quite different from the other two and one I am just getting involved with. It is also a unique NFT driven project and I typically avoid NFT's but made an exception here due to the passive revenue stream these NFTs produce. Mining is what first brought me into the crypto space and I still use it to stack my satoshi's. This project makes mining easy.
The project involves 9,999 unique NFT's that are still in the process of being minted. They are being rolled out in phases and currently sit on phase three with one more phase to follow before the NFT's are all owned. By holding one of these NFTs, you are essentially a part owner of a company that mines BTC via sustainable hydro electricity. There are a couple of different revenue steams they are generating and paying to the NFT holders including the BTC mining but they also have a community pool of funds they invest in other crypto projects. Funny enough, one of their biggest investments was in EMP Money showing you just how strong that project is.
Just think about it, by just holding one or more of these NFTs in your wallet you have a long-term BTC mining revenue stream coming in. A crypto project with a real revenue stream behind it - count me in and I hope more crypto projects move in this direction going forward.
Final Thoughts
Every investment portfolio needs a solid strategy behind it to maximize long-term returns. I hope that by sharing my basic strategy you are able to take a step back and look at how you approach the crypto portion of your investment portfolio. Once you have a solid strategy down, you can look for projects that support your overall objectives. I find this helps keep me focused and away from new shiny projects that lie outside of my overall strategy.
Your strategy will develop and shift over time. Bull markets, bear markets and sideways-moving markets will each make you look at your portfolio differently. By having a well developed strategy, you can avoid the emotional responses to these conditions that can cause you to make poor portfolio decisions and lock in losses or miss out on long-term upside gains.
So what is your crypto strategy? Please share your own strategy below and let me know what you think of my crypto strategy and the three projects I shared that support it.
