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OCW: Year in Review
Happy holidays everyone. I started this newsletter back in April to help educate people on how to do their own crypto investment analysis, and how to use onchain data to assist in finding and monetizing great ideas. Despite starting at a very inopportune time (basically a month before LUNA/Terra blow up), the newsletter now boasts over 15,000 readers, which still blows me away. We’ve covered so much over the last 8 months that is hard to review in full here. From how to research projects, looking at tokenomics, coverage on LUNA’s collapse, understanding unlocks, watching whales, to project deep dives, alpha bursts and even historical case studies on project blowups (including when Mark Cuban got rugged), its clear that this newsletter, while unstructured, is written with one thing in mind: trying to make you a better positioned crypto trader or market observer.
With the year closing out, I wanted to look back at some of my best content over the year where I hopefully added a lot of value to you all, along with more context around them. Continuing with the end of year trend, On Tuesday I will be dropping my "Favorite Ideas & Themes of 2023”, which will focus on my highest conviction (somewhat degen) ideas going into next year. While I could write this with a lot of fluff on “potential” themes and narratives, I will instead really drill down into the 5 or so best and highest upside ideas that I have on my radar and why going into next year. Further, I look forward to making next year even better and appreciate you all for reading my content, even with its somewhat irregular posting schedule.
Intro To Whale Watching:
This was my most popular post of the year, where I laid out how watching wallets contributed to most of the success I’ve had in trading onchain DEX tokens (and is why I am excited about what we are building with chainEDGE). I assume a lot of you have read this, but if not and you are newer to “onchain analysis”, this is a great one to check out. I am often asked how to get started in analyzing onchain movements, and I think this is an easy first step, especially if you are looking for trade ideas instead of watching the FTX hacker move funds around or watching Jump send ETH around to various CEX’s every week.
Playing an Insiders Game as Outsider:
This was my first email that went out in April, and is more of a post on the mindset to make it playing the onchain crypto game. I still have people reach out and say this one opened their eyes to how to approach these opaque markets, and it will always be timeless as incentives within tokens are usually skewed to the teams/insiders.
How To Research a Project (High Level)
I still get questions on how to research projects, and this post still provides a great overview of how I think you can approach high level analysis of a token.
This is a good overview on how to think about (1) token emissions and (2) token value accrual. I think next year will be a bifurcation of crappy projects continuing to go down in the face of unlocks, while better structured or positioned projects can do well, so this is a good one to look back on as you ramp up for what should hopefully be a better year in the crypto markets next year.
Is Forced Selling Behind Us?
I made the case that we were hopefully done with forced selling in mid-July, and ETH proceeded to double over the next 30 days + a mini degen season erupted with many alts going 3-5x. While I’m no macro expert, the 2 times I’ve written “we’re close to a bottom” we have indeed bottomed, so I’m at least not a total idiot!
This is another one that I receive pretty positive feedback on, even today, regarding how to think about real yield. Gives concrete tips on how to go about calculating for yourself if a project is sustainable or not. I think this will continue to be an important framework into next year as trash projects continue to bleed out.
What about the token specific paid research posts throughout the year? How did those perform?
XMON doubled vs. ETH in a few months after writing (still down -56% inUSD but this was also written pre-LUNA). This was the worst performing idea of the cohort.
TRX/USDD - when everyone wanted to short TRX and USDD, I put together a thoughtful analysis of why it was not a LUNA style situation, and is not worth shorting. Today USDD remains “fine” at ~98c and TRX is down just 7% since (you would be negative on your short with funding rates) and increased ~20% from writing in August.
GMX has obviously done very well. It was trading at $19 at writing and traded to as high as ~$59 a few weeks ago (now at $46).
ILV - I made the case why ILV’s game looks interesting + sustainable, but that the token was not interesting at all. ILV was trading at ~$119 at time of writing and is now down to $40.
BTRFLY - I made the case that the product usage / feegeneration of BTRFLY was interesting but the tokenomics made it a tough setup for now. Its price has fallen ~50%.
YFI - I dug into how we found an upcoming catalyst for the token and why it could be interesting. The token has fallen ~41% since or -24% vs. ETH.
rDPX - Wrote about an event driven setup at ~$37 back in September. While the token ate a brutal drawdown during the FTX blowup, it now trades at $36 and is up 45% vs. ETH.
CNC - Wrote a piece on why the mechanics of the project were interesting but that its valuation vs. CRV/CVX was too high at the time. Token is down ~7% since.
GNS - Called out that GNS looks interesting but the valuation seemed to be pricing in a lot. The token is essentially flat since
GRAIL - Wrote about the upcoming launch of Camelot, the Arbitrum DEX. Found it interesting at a $5-10mm valuation, but communicated in comments that it was too rich at $25mm FDV at launch. The token is down 22% since launch.
Anyway, I wanted to just share this year in review with you all. I think broader macro will turn into a tailwind sometime next year, so if you are still hanging around the crypto markets, your patience should be rewarded soon enough. Thank you again for your readership, and here’s to crushing it next year.
Disclaimer: This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.