| HN Mirror

Although there are several things I disagree with in that statement, I can understand why people believe that and participate the way they do:

All the extremely high alpha opportunities I’ve had were because the opportunities presented themselves in the protocols that I knew and understood. It was all luck that “my” protocols were the ones that became wildly mispriced or had a flaw or attracted vast interest. And it is distressing seeing all these different protocols have these wild returns or opportunities that I was only able to be aware of in hindsight. But I don't chase.

My strategy has been to wait. I do this in many markets and asset classes. Wait for the perfect storm that fits my criteria. It doesn’t matter to me that other people can’t understand it because the trading or valuation book with survivorship bias on its side hasn’t come out or been revealed yet. Since it hasn’t had time to. By the time the equivalent of 1980s technical analysis books come out for this market that some future children will swear by, it will just be a different market.

For DeFi sector, I also wait and act fast. I saw a protocol (that I was already familiar with) get hacked and people sold off the tokens. Initially seeing the price drop so hard, I went to twitter to see that there was a hack. Then I went to discord to see what people were thinking. Then in parallel I went to the blockchain as soon as I found the transactions. The information asymmetry immediately presented itself to me. People were afraid of many things happening that could not happen. Like they were primarily afraid that the hacker had a bunch of the project’s token and would sell it - crashing the price before the other users did. Secondarily, they were afraid that the project’s technology was irreparably flawed. And thirdly, the lowest weight, they were afraid that the reputation would be hit. For one and two they were simply wrong. So I bought the dip. For three, well because users aren’t discerning lol… there just isn’t a history to really support that when the supply stays the same, and there are so many for projects can do to appease their audience, so it fit my risk profile and the token recovered to pre-dip prices in a week and I ultimately made 6,000% on it. For the users of the actual product, the ones that took out insurance policies elsewhere were immediately recompensated. There should be news articles about that, but again I’m pretty fine with the information asymmetry where there is a belief that everything goes wrong.

People don’t know how to do what I did, but what I did is a very low bar. Its not genius, it is reading some code and blockchain analysis, and the luck/risk is heavily reduced. Confirm with the blockchain and know how that protocol works. Or don’t participate. The people I compete against do that, and the people I compete against in other markets are also highly optimized for those markets, so who cares if “reading code” sounds like an absurdity to today’s wannabe crypto traders.

Another thing I do is scan the blockchain for previously unique method signatures. This means someone is launching a clone. It doesn't matter to me that other people don't scan like that or at all, I know that I'm competing with some people that also do this.

If you don't know what you're buying, get out of the market. Or be my exit liquidity.