Hey there everyone, this is going to be a long post.
Been a longtime lurker and I’m thinking my karma is finally high enough to post.
I’ve spent six months now in this space (which seems like a short time but really feels like two years), been through the highs and the lows.
I wanted to do a public “debrief” with the aim of informing others who are just starting, and also to collect my thoughts so I can learn better. Without doxxing myself of course.
My first crypto buy was Bitcoin back in January, and yes, it means I got it for under 35k or something. And I traded it in the following weeks for about 10% gain each trade. My take on crypto was: it’s highly speculative, very risky, and you should only commit a small amount of money to it, but you shouldn’t commit 0.
Lesson learned, I also bought ETH for under $800 an sold it for $880 or something.
So when I first discovered DeFi projects in March, I started to see the real potential of adding more crypto to my portfolio. After all, what if crypto is not just a speculative asset, but part of an ecosystem with competitive benefits compared to banks? Then its true value, its fundementals, would be much higher.
So slowly I got to know more and more about it, and that eventually resulted in my “all-in”. I decided to put most of my savings into ETH and started using ETH apps.
My first mistake: underestimating transaction costs.
It feels easy to click buttons and do things on the Ethereum blockchain, especially back when 5-15 gwei was the norm, and transactions took maybe 3 minutes to confirm on average. But man was it expensive.
All in all, in my first three months of DeFi I spent 1.5k USD on all my transactions. I had invested less than 4k at the time. It was devastating to realize that, but I came to terms with it and moved on. That’s also what got me more interested in projects that saved gas cost like Dracula.
I was getting the hang of providing liquidity on Sushiswap and collecting sushi rewards, but I was still heavily in the red. Then one of the worst things happened: one of the tokens I was holding took a 90% plunge. I was devastated. My 3k was now 300.
But I collected my thoughts and sought to understand where it went wrong. I looked at the numbers on etherscan. One advantage of the blockchain is that you can always see what was happening, if you could make sense of the data. I saw that 99% of the token holders were still in, which meant the community still believed in the project, and long story short, I decided to become more active in the community.
I wouldn’t say I was “fighting FUD”, but mainly I presented the numbers and facts, as well as learn more about how the protocol and space worked. I was eventually doing copywriting for the project, and even got offered a position.
This is where I got the drive to continue. I saw that a community could hold on strongly even after a 90% plunge, so long as the facts were presented, and the devs come clean.
So I continued farming on ETH. It still wasn’t profitable due to the gas cost, but every new token I farmed helped me understand a little more about the Ethereum economy. I look through and researched about 15-30 projects a month while farming on Sushiswap. Every onsen launch was an opportunity to learn.
One of my regrets: not getting into OHM when it was still in the early liquidity mining phase on Sushi.
When I discovered Polygon, and moved my funds over, that was a breakthrough. Suddenly, I could use the protocols that I’ve been hearing about all the time, but we’re too cost-prohibitive to use (due to the ratio of gas fee to earnings).
I used AAVE, Curve, Sushi Kashi, and more for the first time on Polygon. And it was beautiful. All the research I had done, I could finally see it in action.
Also the fluidity of funds in Polygon is amazing. You can switch your tokens from one farm to another in a flash. And it basically cost nothing. I was able to get in on Polycat when it was still $5 Fish, and rode it all the way up to $50. I was also in $1. 45 Titan, but we all know how that turned out.
Basically, Polygon was like a special commercial zone with low taxes. It invited innovation, but unfortunately also profiteering. A lot of sketchy BSC inflationary farms came in and started crowding the space with nonsense tokens.
I can’t lie though, it was insanely profitable for a while. And through the market downtime of April-May, I still made around 5-7k in profits, because polygon tokens were mostly pegged to stables.
I rode one shit coin farm from an extremely profitable launch, right into the ground in 24 hours.
I also got in deep with Iron Finance V1.
I was getting wary when mcuban got in on Titan. I sold my pot and put half into Terra LUNA, and kept the other half in stables.
I should’ve stayed out, because the next thing I knew, Titan plunged back to 29 and I was buying back in, hoping to get a quick profit.
And that would become the transaction confirmation screen that haunts my dreams for the rest of my life.
I slept soundly too, believe that this dip would correct itself just like the many others before, that Titan was “too big to fail” at 2.x Billion liquidity.
All of that vanished the next morning. I couldn’t say anything. It was 0.
Honestly I kept it together for longer than I thought. I wrote a post on my personal insta about lessons learned, and I checked on my other funds just in case. They were safe.
But I had lost close to half my net worth that day. And all within 8 hours.
It wasn’t until I called my partner and told them about it that I could cry out loud. But that felt good. I could finally talk to someone about it.
Even though most of it is money I didn’t have before DeFi, it’s still a good year’s worth of salary to me. It represented future possibilities, moving abroad with my partner, or putting a down payment for an apartment. Finally coming to terms with that gave me cathartic release.
Anyway, I wasn’t perturbed. I knew my risks going in, I just wish I followed my own advice a bit better. From then on, I decided to write my own investing rules. For example, no trading on my phone. No re-entering a project that I just exited, because I probably exited for a good reason.
Anyway, I started investing in stuff I really saw long term value in, and that’s given me a lot of peace of mind since. I don’t watch the price as closely anymore, cos that didn’t matter to me as long as the team behind the token was building things and had sound ideas. That’s what got me to invest in LUNA and the Terra ecosystem, and finally, that paid off recently when it hit $9.
I knew it might be temporary, and yeah, at the time of writing it’s receded back down to something like $6.30, but I still believe in it, and I trust my convictions and instincts.
I realized that community has value in DeFi. Dracula, BAYC, Punks, and OHM would be nothing without their stalwart meme lords and smoothbrained APR-crunchers. I make sure that every project I’m in now has a great community that’s able to welcome newcomers, and also discuss high level tokenomics while explaining it to layman terms.
I’m also invested in a few other projects that I think have long term value, and I’ve reduced my Polygon holdings to less than 1/5th of what it was before. Most of it is in Balancer, which is simply a great way to diversify your assets.
The rest is in a dividends contract with a yield aggregator.
I’m not done with farming coins, but I’m definitely allocating my risk better now. I think TITAN was my biggest lesson to date, and though I wish it did not happen, I still got something out of it. From now on, my instincts will be sharper, and my nose for good/bad fundementals will be too.
Most of my journey and thoughts I post on Twitter, including a spreadsheet and guide on how to use Mirror Protocol V2. You can check it out at [Twitter](http://www.twitter.com/DrCle4n)
I hope that this thread was a good read for you, and that you gain something from my experience.
If you’d like to have a conversation, or if you have any thoughts/questions, do feel free to comment, or drop me a DM on Twitter where I’m more active. I’d love to engage with you.
TL;DR I spent six months in DeFi, got rekt multiple times including with TITAN. I recovered, learning from my mistakes, and started investing in long term projects instead, especially the ones with a great community. Since then, I sleep a lot better.