My Investment Experience: Exploring the New World of DeFi Wealth

After I entered the field of digital currency investment, after a period of hard work and thinking, I gradually established my own investment analysis framework and logic, and used this logic to gradually eliminate most of the early investment currencies.

Under the guidance of this logic and framework, I finally only settled down Bitcoin and Ethereum. But I always think that investing in Bitcoin and Ethereum is not too big a challenge, and it should never be the only goal of investing in digital currencies.

On the one hand, the way of investing in Bitcoin and Ethereum is not too difficult for me, because the investment method is relatively simple - that is, to invest in batches in bear markets, and to sell in batches in bull markets. I have already experienced this psychological experience in A shares. It has been repeated many times with other investment markets, and the operating logic of investing in Bitcoin and Ethereum is similar.

On the other hand, digital currency is a vast new continent, which is as vast as the sea of ​​stars. This endless cyberpunk world will surely prosper in the future so that we cannot imagine it with today's imagination. This world cannot only have solitary bits. With the two treasures of Bitcoin and Ethereum, there must be more hidden treasures. So I have to look for new projects, new fields.

Furthermore, I have always believed that the method of fundamental analysis in the stock market should also be used in any other investment field, including digital currency. Of course, this analysis method will not be exactly the same in digital currency, and it is impossible to use such indicators as price-earnings ratio, price-to-book ratio, sales, and net profit to analyze exactly the same. But there are bound to be similar approaches that apply in this area as well. That is to say, I think there must be a fundamental analysis method based on quantitative analysis in the field of digital currency.

Based on this idea, I have been trying to find new projects besides Bitcoin and Ethereum. But before 2020, I haven't found a suitable analysis method, so I can't come up with a set of quantitative indicators to analyze and find a suitable target.

The outbreak of DeFi in 2020 has completely changed this situation, mainly for three reasons:

1. DeFi is an important step towards the implementation of blockchain applications.

Since the DeFi tide broke out in 2020, most of the DeFi applications have real usage scenarios, a real user group, and the logic is becoming more and more understandable to ordinary people, although the usage scenarios are still relatively narrow and the user group It is still relatively small, and the business logic is relatively simple, but this has taken a major step towards the implementation of blockchain technology.

Therefore, we can slowly use business logic to analyze the value of DeFi tokens, instead of imagining its future and value based on a white paper without even seeing the product like ICO.

Second, with intuitive and reliable transaction data.

Let's take Ethereum as an example. Almost all DeFi applications have real data stored on the blockchain. We can use real data to measure the value generated by the application, the locked tokens, and the users used. This is a step towards quantitative analysis. a big step,

This has completely subverted the traditional financial investment field. We need to evaluate the fundamentals of the project through the data provided by a third-party accounting firm.

In the traditional investment field, even if some projects are accounted by world-renowned third-party accounting firms, scandals of fraudulent accounting have been repeatedly exposed. In irregular markets, this phenomenon is especially serious, and A-shares are a typical example. This is why I invest in A shares and never buy individual stocks, because I can't believe their financial data.

In the DeFi field, it is completely different, all information is public and cannot be tampered with. We can clearly see the real performance and profitability of each project based on these open and transparent data.

3. New indicators for evaluating projects began to appear.

In the field of DeFi, currently the most intuitive data to measure the value of a project mainly include the total circulation market value, circulation market value and total lock-up value. Although these indicators are still very simple and rough, at least they are moving towards a systematic and quantitative direction. In the future, a unique quantitative evaluation system will definitely be formed in the field of digital currency.

At present, this system is still in the embryonic stage of development. We are entering now, which is a good time to grow together with this system. As long as we keep up with its simultaneous development, we will occupy an extremely favorable position in the evaluation of digital currency projects. status.

Based on the above three reasons, starting from 2020, I was finally able to focus on selecting individual DeFi projects, and took this opportunity to verify my various ideas and logic, and accumulated certain experience and lessons.

I believe that with the development of the market and the accumulation of experience, retail investors in the blockchain field will definitely get rid of their dependence on third-party financial evaluation agencies, and one day they will be able to use blockchain tools and real data independently from Fundamentals evaluate the long-term value of a project, achieve freedom of investment, and discover your own gold mine.

In my opinion, this is the most reliable way to invest in digital currency.