The next investment logic of the crypto market

Source: Daoshuo Blockchain

A reader wrote in the message area at the end of the article:

"Now I don't know what else is worth investing in..."

I don't think this is a bad thing. If it were me, I would not buy anything when I was confused and hesitant, watch more and do less, and wait until I had sorted out my thoughts before I started - I haven't bought any other coins except Ethereum during this period.

In fact, excluding those projects that are purely for fun and gambling, there shouldn't be many projects that are really worth our serious investment.

This should be the case in any investment market.

In this regard, senior investment masters have set a good example for us:

Among the thousands of US listed companies, Mr. Buffett only holds more than a dozen stocks. There are even fewer heavily held stocks.

After sorting out my thoughts during this period, I roughly divide the tokens in the current crypto ecosystem into the following categories:

The first category is collectibles in the crypto ecosystem.

The most typical tokens in this category are Bitcoin, CryptoPunk, and some on-chain artworks (NFT).

For this type of assets, I firmly believe that the future of the crypto ecosystem will prosper, and this prosperity will definitely lead to value spillover to some very collectible categories.

Therefore, I will choose valuable varieties to buy at the right price.

The second category is tokens with commodity value or use value.

This type of token is most typical of the first layer of blockchain (L1). The token is an integral part of the project and the driving force of the project operation.

For this type of assets, I believe that the future of the crypto ecosystem will prosper, and the tokens that can support the development of the ecosystem must have hope in the future.

Therefore, I will also choose valuable ones to buy at the right price.

The third category is governance tokens that account for a large proportion of the market and only have voting functions.

In the future, for this type of token, no matter how good the project behind it is, how good the team is, and how lucrative the profit is, if I am asked to spend real money to buy it, I will be very cautious. I will only take advantage of the airdrop when time and energy permit.

The fourth category is tokens with vague positioning and unclear attributes.

For this type of token, the project party’s description of them is very vague, that is, they do not clarify their usage functions or their equity attributes. At most, they will use the project’s profits to repurchase in some cases to show that the project party “values” the token to a certain extent.

For this type of token, I will observe and be cautious before their functions and attributes are clear.

There is also a category of real equity tokens.

This type of token is actually like a stock. If someone buys all the tokens of this project, it is equivalent to owning all the rights and interests of the project, and can completely reorganize the management according to their own will and take away all the profits of the project at will.

This type of token does not seem to exist in the crypto ecosystem at present. If it appears in the future, I will pay attention.

Using this method to examine the tokens in the ecosystem, I think it is clearer how to participate: that is, more than 95% of the tokens in the ecosystem need to be purchased with great caution - this is true for some successful classic projects, and also for the AI ​​proxy projects that have emerged in the past year.

According to this idea, I will first strictly review the tokens that only have governance functions and whose future development is not clearly defined by the project party. All those that continue to be positioned as governance functions in the future will be cleared, no matter how good the story behind them is, how advanced the framework is, and how promising the technology is.