Personal Reflections in Crypto
This story is meant to capture some of my experiences and lessons learned with crypto over the last 4 months. In 20 years from now I hope to look back on this as my first steps in something much bigger than it is today.
2017 | A Bitcoin documentary is all the rage on Netflix, my friends are making stupid bets with each other using Litecoin, and I’m fascinated feeding the King James Bible into a SHA-256 hashing algorithm. If you knew me, you probably would have thought I bought or mined a bag of Bitcoin and sat on it… I wish. Instead, I read the Bitcoin whitepaper and wrote a MATLAB script to generate the nonce for the first Bitcoin block to help me understand the math and coding behind the Bitcoin proof-of-work. Nothing more than a learning exercise.
2021 | Fast forward to today. Bitcoin is at $50k and one of the largest transfers of generational wealth is front and center on the World’s stage (not to mention, there is a global pandemic). Crypto is revolutionizing industries and technology and there is no doubt that it is here to stay. My intention with this story is to document some of my experiences in the last few months exploring the world of Crypto. I’ll focus on the 3 main chapters:
- Crypto Trading on Coinbase
- Ethereum Dapps Exploration
- Polygon Layer 2 Adventures
Crypto Trading on Coinbase | The hype. The gains. The FOMO. I wanted so badly to be a crypto purist, but the FREE coins on Coinbase pulled me right in. After 15 mins of well animated videos, I had $30 in crypto in my “wallet” and I was now an expert on decentralized finance. To add to it, I guess I picked the right weekend to sign up because within 72 hours my $30 turned into $90. While everyone was talking about Gamestop stock, silver, and SPACs, I was killing it on my $90 crypto portfolio.
It was time to add some real money into the pot. I bought some GRT and LRC. Both seemed like solid projects that were recommended from a friend. GRT is the token for The Graph and LRC is the token for Loopring. Most people would have bought these tokens to trade for profit, but I’m a purist and I wanted to put my new tokens to use. Particularly I was interested in delegating my GRT. So I went to The Graph website, found my way into their discord, and started asking all sorts of questions. While delegating is probably a great idea for people with large amounts of money to invest, I quickly realized that I couldn’t even afford (with my crypto budget) the fees to get my GRT onto the network and delegate it to an Indexer. With that, I decided I would be trading my crypto for gains after all.
As of today, I am up about 20% after fees, I finally understand the advantages of Coinbase Pro over Coinbase, and the hidden fees are not so hidden to me anymore.
Ethereum Dapps Exploration | Despite high gas prices on Ethereum, I was determined to get into into the world of Dapps and figure out what all the hype was about. I went to the Ethereum website and scanned through the top Dapps. That’s when I came across Pool Together. A no-loss lottery in which the interest gained by all the pooled money is raffled off each week to one (or multiple) lucky winners. It sounded too good to be true. For the rest of my life, I would have a chance at winning thousands of dollars and at any point, I could get that deposited money back.
There was still the issue of high Ethereum gas fees. Gas is the term for the fee that you pay miners (the people supplying the computing power) to complete the proof-or-work for your transaction. With a target of 1000 USDC Pool Together tickets, how was I going to move $1000 without losing hundreds of dollars in the process. My first solution was to split the gas with my friends. I created a discord channel and recruited 5 friends to join me in entering Pool Together. We would split any winnings and this way we would be able to split the gas fees. After 2 weeks of pitching my idea, nobody was interested. Go figure.
It was time for me to do this on my own. All I needed was 1000 USDC , $250 worth of ETH, and I should be good to go. I decided I would buy 1000 USDC and $1000 worth of ETH on Coinbase (not pro). At that time ETH was an ATH of $1800 which I believed was probably as high as it might go. After my order was placed I learned that Coinbase requires you to hold the asset for 1 week while the bank transaction takes place. And so the waiting began. While I was waiting, Ethereum began to drop in price and I quickly realized my mistake. I now had half my money in a fluctuating asset which I believed at the time could drop below $1000. I wasn’t going to trade it though because I needed it to enter Pool Together. After a week I was able to trade my assets into my wallet and I now officially had assets on the Ethereum network.
As soon as I got onto the network, I did two things. The first thing I did was complete my deposit into the USDC pool. Finally, I have never played the lottery (and always regarded it as a tax on the poor), and now I had 1000 lottery tickets for the rest of my life! The second thing I did was swap 75% of my ETH to USDC on Uniswap. At that time, ETH would just need to fall below $1300 and I had made the right decision. It never did. Instead, ETH continued upward and is still continuing at $3800 today. Fortunately, I think the gains in my remaining ETH have been enough to cover my transaction fees up to today.
Polygon Layer 2 Adventures | Whether or not layer 2 scaling is the future of crypto, the low cost transaction fees allows small wallet holders like myself to move around much more in the crypto space. At the moment, a transaction on the Polygon network is 0.001 MATIC which is less than 1 penny! To complete a similar transaction on Ethereum this second is about $120. It was Pool Together that brought me to the Polygon network. As a test run, a DAI pool was opened on the Polygon network and was incentivized with twice daily prize pool for 2 weeks. Like a rabbit chasing a carrot, I decided to move my remaining USDC to the Polygon network knowing that after the 14 day period I would be able to move around with nearly zero fees. Needless to say, I didn’t win any of the 28 drawings, but I did look forward to them. Once the 14 day period ended, my assets were now firmly planted on the Polygon network.
I decided to move my assets to Aave while I waited for Pool Together to introduce a new pool. Depositing my money into Aave was the very first time I realized that decentralized banking is the future. At this moment, there is no doubt in my mind, that banks will either adapt or phase out. Aave has a beautiful and easy to understand interface. While my assets were in Aave I was earning interest as well as a daily MATIC reward. Each day I looked forward to my $0.50 MATIC reward like I was making 10x gains. I was so stoked that I could unwrap my MATIC on Quickswap then deposit it back into Aave and compound my rewards. To make things even more interesting, I took a loan from Aave for USDT using my DAI as collateral and deposited it back into Aave to earn more rewards. It was exhilarating.
After 2 weeks of waiting for the new Polygon pool (and making about $5 in MATIC), I reached a decision that I would look for a more aggressive play for my assets on the Polygon network. That’s when I discovered the yield farming movement. In a matter of days, a number of staking farms (PolyWhale, PolyFox, PolyCat, PolyGaj) had all popped up. Promising massive returns and sporting tokens that were surging in price. While I had no idea what staking was, I saw the PolyWhale token KRILL was pumping and decided that would be my first high risk play. I got in at $180 and as soon as the trend changed I sold at $210 for a small gain. I got really lucky. However, during the swap process, I noticed an asset in my wallet that I had not purchased, WOLF.
I was intrigued. With super low gas fees, it was possible to freely give people tokens on the Polygon network. This WOLF deposit was like someone handing out a flyer in the city. After a quick google search, I went to the website moonwolf.io, the Discord link was broken. Typically this would turn me off, but I decided to press forward. I downloaded telegram and decided to read in on the latest messages. To my surprise, there was a live conference call underway. I had to listen in. Immediately from the tone of the developers, you could tell they were passionate about their project and they were disappointed with the new yield farms on the network that were taking away from their liquidity and giving Polygon a bad rep with “Pump and Dump” behaviors and “Rug Pull” tactics.
I decided this was now my aggressive play. Moonwolf will be launching a utility token (MOON) that will compliment their deflationary token (WOLF). The new token would be rewarded by staking WOLF in their new and expedited yield farm. In the near future, the MOON token will be used as the form of payment in the Moonwolf NFT Marketplace. For a week now I have attended their community calls, provided feedback as well as ideas, and I have grown a part of a community that I hope will carry on forward. While all of the other yield farms are fading out of existence; Moonwolf, with it’s quiet launches (while somewhat unorganized) and passionate community, seems to be moving right along to a marketplace launch that could evolve into a premiere app on the Polygon network. Maybe some day I will reflect on how I have played this investment, but for now, I will continue to Harvest and HODL my MOON rewards on my Moonwolf farm.
To Close | Crypto is more than just hashes and security, it is a decentralized lifestyle in which the people hold the power and not the corporations. It is amazing to think that a decentralized entity like Pool Together may one day provide scholarships for students in the same way that US state lotteries do today. There is no doubt that this space is currently filled with bad actors and toxic practices, but when you look past all of that noise, there is a movement that is disrupting the world and unifying people all over the world.
