Thread by @0xminion

1) My third thread aims to jot down some thoughts on the “conflicting” views that are often presented in crypto’s primary and secondary market. Quoting “A New Era of Financial Market Behavior” by @ashwathbk

https://twitter.com/ashwathbk/status/1417827146374864898?s=20

2) There are so many misunderstanding elements for primary& secondary investment/trading. Newbies are often jealous about how primary market participants getting 100x ROI with many of them still at their book value which is a useless metrics to chase.

3) They often forget there is a significant opportunity cost component within the primary market opportunities. You might be locking your money for several years and slowly getting them back across the time horizon.

4) On a risk-adjusted basis, sometimes is just better off to hold market benchmark (i.e, #Bitcoin or #Ethereum) from an ROI point of view. It’s really hard to outperform the market. Survival bias is in full force.

5) Primary market participants often dislike degen culture in a way that the group of people doesn’t follow a set of rules. Yet, degen farmers are always one of the first to provide exit liquidity for the market and take significant risks to help projects bootstrap.

6) They often look at metrics such as fundamentals, market sizing, FDV, team capability, ecosystem bets, growth strategies, token vesting schedule, cap table, value add/synergies, branding needs, classifying deals into e.g. alpha/beta.

7) On the other hand, secondary market participants often look at metrics such as market narratives, circulating market cap combining with token unlocking schedule, fundamentals, etc.

8) Within the secondary market participants, degen farmers often leverage information asymmetric to YOLO in order to capture the market alpha as early as possible. #ApeStrongTogether 🦧

9) We operate on the ethos of if the market knows an opportunity very well, meaning this is the market beta, if no one knows about this, either we are early (market alpha) or we are wrong.

10) By aping into an opportunity early and trying to capture market alpha, degen farmers often absorb significant risks in the early stage in exchange for a higher return to compensate them. Sometimes FDV is a meme on the secondary market.

https://twitter.com/0xminion/status/1412114436534554626?s=20

11) Holding views from both sides are extremely useful in crypto, as crypto is not your everyday TradFi market structure, if you are only thinking in TradFi term, you are #NGMI.

12) Clearly define the purpose and put a firewall in between the primary market and the secondary market brain often helps me to control risks and improving my investment/trading thesis. Some detailed metrics which I found useful.

https://twitter.com/0xminion/status/1395463711360372737?s=20

13) Primary market (e.g. investment) in a way resembles a trade as well, you are trading off a portion of your AUM for future growth of the project that you betting on. So we kinda all degenerate but in a different way.

https://twitter.com/0xminion/status/1417425636327497729?s=20