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ENS

The 2022 Crypto Growth Portfolio

It started with a tweet, shared in response to an epic Twitter thread.

First, the thread:

Then, my tweet:

The thread from Adam is LONG, so you’ll need to devote some serious time to studying it, or you’ll want to keep referring back to it a little at a time (that’s my plan; Adam shares some great info but it wasn’t until one of my Twitter friends referred to a specific recommendation when I started reading chunks in detail).

My tweet, however, was meant to start some conversations around a simpler potential portfolio you could put together to play this new new new NEW economy of web3 and whatever else is going on.

We present our 2022 Growth Portfolio in the same spirit as past HYPOTHETICAL portfolios: Do Your Own Research, Not Investment Advice, and, well, here’s an interesting way to track what’s going on in Crypto.

What’s Here (vs. What Was in the Tweet)

Caveats first: I made a couple changes to the December 30 post; I decided, to be direct, that $UNI and $CRV didn’t fit with the portfolio. So $AVAX and $SUSHI were inserted instead. The “Rank” column on the left-hand side is taken from this morning and all prices (both 1/1/22 and 1/5/22) were from CoinGecko.com.

Also, I created the list, did the whole price thing, and then…”#BitcoinCrash” or whatever, the afternoon of January 5. So I had to recalibrate based on pricing the afternoon of the 5th. (Hopefully the bloodbath is over.)

The idea goes like this: take a hypothetical $10,000 investment and divide it equally among ten coins. Past portfolios used fewer coins (BRED used just 4) but this might be the best way to spread the risk.

Bitcoin and Ethereum

The first two choices may be obvious: Bitcoin ($BTC) at nearly $900m at this writing and Ethereum ($ETH) at $400+m right now are the Big Two; third-place (by market cap) coin $BNB is 1/4 the size of $ETH. Bitcoin may or may not BE the crypto market, but a coin that is 1/3 the size (roughly) of Apple is probably a force to be reckoned with.

Ethereum is rather formidable in its own right, and, for the purposes of having an entry point into the rest of the coins through something like Metamask, you want some $ETH.

(SIDEBAR: Metamask has ONLY 21 million users? You want to get some $ETH and start using Metamask *if only* for the possibility of an airdrop, a la $ENS.)

Avalanche

Avalanche ($AVAX) traded at (GASP) $3.67 on January 1, 2021. So it’s up nearly 30x in one calendar year. Is it done?

We don’t think so; of course we’re kicking ourselves for being late to the party but it, as a platform, is pretty stellar and may have plenty of room to grow. (Could it pull back? Yes. $24B market cap might seem a little pricey. But $100B isn’t out of the realm and, let’s be honest, if you could 4x a piece of your portfolio, you’d probably be willing to risk a little.

Shiba Inu

Yes, we’ve seen the stories about the kid somewhere who invested a few hundred dollars in Shiba Inu ($SHIB) and now owns his own island. This one, for us, is the last of the famous international meme coins. You’re speculating that there’s a chance the $SHIB community can get this thing to a tenth of a penny, which would mean roughly 30x growth from here. (It would also mean that its value dwarfs the current value of $ETH, so yeah that’s a tall order.)

Realistically, though, expect a couple more bullish cycles of this highly volatile meme coin. Worth taking a chance on.

Crypto.com

You can’t go anywhere without seeing BRAND SPONSORSHIPS IN CRYPTO. FTX has an arena, as does Crypto.com; Crypto.com has Matt Damon, so advantage $CRO, its coin.

AND HERE’S A CLEARLY MARKED AFFILIATE LINK: We can both get a little something if you use this link and sign up and make a qualifying purchase.

This is probably the best way to play “pure retail crypto,” if that’s what you call a brand that pays big bucks to have Matt Damon on board.

Sushi

We pulled out Uniswap specifically and replaced it with Sushi ($SUSHI). We like the platform better and, while Sushi has ebbed and flowed and zigged and zagged — $3.32 on 1/1/21, then a high of $23.38 in March of 2021, and today at $7.76 — its one-stop-shop of Pooling and Staking and Farming is pretty nifty.

DeFi Kingdoms

$JEWEL is the token behind DeFi Kingdoms, which our buddy @TxdoHawk on Twitter talked about yesterday.

If you’re playing the DeFi-meets-Gaming-meets-NFTs space, there are worse places to do so.

Ethereum Name Service

$ENS is the governance token behind the Ethereum Name Service, and it was airdropped in November to users; we did a deeper dive on the site a couple weeks back. We still like it a ton.

Treasure

We talked about this one yesterday, too; $MAGIC is the coin and it is on a roller coaster this year already. (And today, dropping from an all-time high of $4.75 to its current level at $3.61 a token.)

The part above about DeFi Kingdoms playing the intersection of a couple of categories applies here: $MAGIC could very well be a ten-bagger this year (and that would put it just above $1B market cap).

What’s Next?

We plan, as we did in past years with the BRED Portfolio, to keep tabs on this one, with an update at least at the beginning of each quarter. It should be fascinating to see unfold.

A Month Later: Is $ENS the Perfect* Web3 Token?

If you were lucky enough to grab some $ENS, the token from the Ethereum Name Service project, congrats! (If you haven’t but think you may be entitled to some, there’s still time. Go here: ens.mirror.xyz and take a look.) The token dropped into wallets on November 8 and it’s been nearly a month to watch it unfold, so we thought we’d examine a little further.

The price chart has been a thing to behold: if the average user got a couple hundred $ENS tokens, and those are now trading in the low $40 range, an $8000 or $9000 payday is nothing to sneeze at. Pick out your Christmas gifts — so long as they’re not negatively impacted by the supply chain — and rock on!

Not Bad for Playing on the Internet for Three Years

But, long term, is $ENS all it’s cracked up to be?

First, the Background

We actually talked about this in our post from June 2019 called “Playing the Long Game.” Back then, we didn’t really see the prospect of an airdrop coming, we were just looking for a combination of Ethereum Cybersquatting and Finding A Cool Domain Name.

You can register a bunch and they only cost about $5 a year; we registered several and use one of them as our principal registry.

In theory, we could use one of the ones in our stable, like “jamiedimon.eth,” and set it up to give and receive tokens. (Or you could try to sell it to JP Morgan Chase, which the owner of the above coin appears to be doing.) (Note that it doesn’t take an internet super sleuth to figure out that the author of this post owns jamiedimon.eth.)

If you think of these dot-eth domains as your portal to Web3, the metaverse, AND your crypto holdings…that’s a pretty good way to look at it. Now, let’s do a little analysis.

‘I Promise, It’s Perfect.’

That was the tagline from a golf club that was sold in the early 2000s. Called “The Perfect Club,” it could get you out of trouble, like tight lies, and suggested that mere mortals like me (with my handicap of…well, let’s say it’s not pretty) could use it on shots from about 190 yards out and drop the ball on the green with minimal effort.

I don’t remember seeing an asterisk — * — like the one in the headline of this blog post, but it should have come with one. Especially when the announcer himself said “I Promise, It’s Perfect.”

But the question at hand, and where the asterisk leads us, is whether or not $ENS *may* be the Perfect* Web3 token.

Here are a couple reasons — and yes, this is not financial advice and you should DYOR (Do Your Own Research) and we’re not responsible for your gains or losses — why $ENS could be the on-ramp to Web3.

The Analysts Are Taking Note

Van Eck is kindof a big deal. One of their analysts did a pretty solid analysis of what’s going on with Ethereum domain names, the bread-and-butter of the ENS entry point to the rest of the investment world.

We’ll link to Matthew Sigel’s post here, and we found it more than a little interesting (in a good way) that Sigel compares the ENS domain business to Verisign. (We also didn’t realize Verisign was such a stud.)

Van Eck’s Sigel summarizes the dot-eth trend better than we could right here:

Plus the Airdrop Means Fewer People “Heading for the Exits”

Here’s another aspect to look at: when you have projects that make people rich very early — not just crypto or Web3, but IPOs, too — you always run the risk of a “cut and run.” For instance, a Junior Software Developer signs up for a gig at a startup, is given some options, and the startup IPOs. Whenever the lockup expires, the developer gets bored, has high-six or low-seven figures in cash, and heads straight for the exit.

Because of an airdrop that didn’t end up with tons of rich people, and with no VCs taking part, the result is that nobody (aside from the founders, who are in this for the long haul) got super rich. The lack of “F*** You Money” makes this a potential winner.

AND…It’s a DAO

This would be the third reason this is so huge: governance.

DAOs are Decentralized Autonomous Organizations. Simply put, they’re designed to run with limited involvement from management, delegating votes on a variety of governance issues to a team. To collect your $ENS tokens you had to vote on a series of proposals and select a delegate to vote on your behalf.

They’ve built a black box and the management of that black box is in the hands of the team of delegates, but proposals to change the way the black box functions take a majority. And some of it is immutable — like the DAO can’t really go out of business — so they’re definitely looking at this with a decades-long time horizon.

Should You Buy at This Price?

Again, this is not financial recommendation, and do your own research.

But the token itself is right around the top 100 in market cap and it’s just north of $1B. Compare and contrast that with tokens like $SHIB (~$19B market cap as of this writing) and take a look at the functionality of $ENS in comparison with other tokens ($SHIB has a cult-like following and has rocketed upwards, but is it really THAT valuable?).

$ENS might not be a bad bet in the grand scheme.

Good luck.