DeFi Enclave's Chronicles. Episode 8.
Injective, Solana's Trap, GRAIL Madness, Kava, Portfolio Update, and much more.
In this episode:
Voyager's Observations - personal reflections and insights on DeFi and Beyond
Voyager's Vault - Detailed Report on My Investment Moves
DeFi Survivor's Bookshelf - Handpicked must-read threads and articles
DeFi Projects Radar - detailed survey of projects news and developments
Alpha/Airdrops Whispers - unexplored DeFi territory, proceed at your own risk
Voyager's Observations
A Black Sheep
The more the market grows, the more I start to feel like an old-timer who's walked into a kids' party, completely out of touch with what the youth are into.
What's that ? You're talking about long-term investing ? Fundamentals ? Look over there, another junk coin is making me rich.
That's how I see about 90% of the noise in X. People spend all day shilling some crap. Everywhere, millionaires telling how they easily made another 50k from an initial $300 yesterday. And the most important thing - these cheap FOMO marketing tactics still work.
Of course, 1 out of a thousand might actually make a million on some junk coin, but 999 will lose, and no one will ever know about them. People don’t usually talk about their losses.
Investing in the current environment is quite challenging. When you've worked for 10 years, earning and investing in traditional finance, and then are forced to shift your capital to crypto, you approach investment from a different perspective.
I understand those who work and invest part of their salary in some meme coin, hoping to get rich and quit their jobs. But my approach to DeFi is different, unpopular among the majority. I can't allow myself to be tempted by attractive promises of quick earnings or triple-digit APYs that are more likely to result in significant losses. I try to double-check, doubt, and critically analyze, so you'll often see criticism and dissatisfaction in my posts instead of blind admiration about how wonderful a project is.
No. I demand quality and fulfillment of promises from a project if they want to attract my money, and I'm surprised when other users don't demand the same.
Injective is a DeFi Hub ?
The hype around Injective doesn't seem to end, with many considering it a DeFi hub. However, no one can explain why projects would suddenly decide to launch their products there. Injective's metrics are modest; its "incredibly growing ecosystem" has a Total Value Locked (TVL) smaller than some overlooked project on Arbitrum that few use.
And if there's a sudden need for a DeFi Hub on Cosmos, Kava blockchain already fulfills this role quite successfully and has been doing so for a while.
Kava is 20 times larger than Injective in terms of TVL and 10 times larger in the number of active projects (according to defillama). Kava regularly releases updates and continues to develop, so it's worth keeping an eye on.
Solana is a trap ?
shared insightful thoughts on Solana, and I completely agree. 
And here's a paraphrase of a tweet I came across but couldn't find the original author:
"Solana fans don't realize they're effectively paying $100 million a month to use the network. SOL's reliance on subsidies and inflation leads to price crashes, reduced subsidies, validator defection, and potential chain halts. This cost is borne through SOL inflation, acting as a hidden tax!"
The popularity of Solana is a mystery to me. What's so attractive about it for the average user ? There's little to do in terms of DeFi projects. There are constant risks, like the potential start of SOL sales by Alameda. Is the appeal in speculating on meme coins or NFTs and enjoying low fees ? There are plenty of alternatives for that.
In summary, if SBF did something well in his short career, it was somehow initiating a chain reaction of 'Solana madness,' spreading like an epidemic among naive and unprepared minds.
The only thing one can do here is to try and profit from airdrops while there's significant hype around them.
Voyager's Vault
Once a month at the beginning, I make a snapshot of my portfolio with detailed proportions and P/L.
You can check November Report in DeFi Enclave's Chronicles #5
Today, I will share some updates regarding the changes in my portfolio over the past week.
I've invested a bit in EigenLayer through Swell and Ether.fi. While I initially ignored the whole restaking hype, it's now clear that this trend is something one cannot just pass by.
On one hand, there are definitely going to be substantial airdrops, and on the other, the sector is beginning to develop technically, creating specific services and solving certain problems in the crypto industry, rather than just engaging in a Ponzi-like transfer of our ETH from one pocket to another.
GRAIL Madness
Those who follow my messages on X probably know that I made a somewhat rash move, which I already regretted as it almost ended badly.
I keep part of my stablecoins in lending on Silo Finance, in exchange for which I took GNS and staked it on their site. This position immediately starts generating income and can be closed at any moment. The only risk here is that GNS might surge in value, leading to my liquidation on Silo. But I don't really believe in a sharp rise in GNS, so the position was relatively safe.
However, I decided to go further and borrowed GRAIL instead of GNS. Then I converted GRAIL to xGRAIL and sent them to Camelot for dividends. This position can't be closed just like that, as to convert xGRAIL back to GRAIL, I need to wait for a six-month vesting period.
Here's how it looked
Just two days after I made the move, GRAIL began to rise sharply, gaining +40% in a single day. Now, I realize how strange it was to believe in the undervaluation of a token, knowing it could rise significantly, and yet open a position where a strong increase in the token's value could lead to my liquidation :)
Fortunately, I managed to avoid liquidation and slightly adjust the price at which I would be liquidated. After that, the price went down, so it seems I won't face liquidation today.
Of course, I had calculated the risks, and in the worst-case scenario, it would have been as if I had bought GRAIL at $2,500. Even though I consider this price undervalued, it would still have been unpleasant. However, the ideal scenario remains earning from the xGRAIL stake and paying off the debt with these earnings. This turns out to be a free loan that becomes yours over time.
KAVA
I purchased a small amount of KAVA for my infrastructure portfolio.
Since Kava is a major investor in Akash Network and holds a large number of their tokens, I decided to sell my AKT tokens, as I will indirectly own them through KAVA tokens.
Starting January 1st, the inflation of the KAVA token will stop, and it's quite likely that as the ecosystem grows, the demand for the token will also increase.
I was surprised at how little hype there is online about this blockchain, which ranks ninth among all blockchains in terms of the number of protocols running on it and is second in TVL among all chains on Cosmos, outperforming the more hyped Thorchain (4th), Kujira (5th), and Injective (12th).
There have been no changes in the main portfolio.
DeFi Survivor's Bookshelf
How Pyth is Catalyzing a New Era of Permissioned Environments - link
9 things that excite us in Web3 in 2024 - link
MEV Transparency: Ensuring Fairness In DeFi Markets - link
The Crypto Broadband Era: Modular Blockchains and Rollup Revolution - link
Preparing Optimism for the Superchain future - link
Immutable: How They Conquered 2023 & What’s Next - link
Arbitrum Orbit and Celestia Collaboration - link
The Castle Chronicle: Volume 48 - link
AltLayer - Introducing Restaked Rollups - link
Crypto in 2023: Top Winners and Losers - link
Simple Tokenomics for a Proof-of-Stake Utility Token - link
What Are Ordinals? Bitcoin NFTs Explained - link
A Tale of Gas and Approximation (part 1) - link
A Tale of Gas and Approximation (part 2) - link
A Tale of Gas and Approximation (part 3) - link
Real-World Assets (RWAs) Explained - link
Avail Project - Deep Dive - link
DeFi Projects Radar
IntentX - IntentX Insights: December 2023 - link
Prisma - Prisma digest #7 - link
Balancer - The Balancer Report: Routing for success - link
Frax Finance - This Year in Frax 2023 Edition - link
Frax Finance - Sam Kazemian Reveals Frax Plans for 2024 and Beyond - link
Frax Finance - This Week in Frax - December 22, 2023 - link
Cega - Introducing USDT deposits for Dual Currency - link
Cega - Balancing High Returns and Risk: A Sharpe Ratio Analysis of Cega’s Investment Products - link
LightLink - Tokenomics. December 2023 Update - link
Chainlink - Product Update: Q4 2023 - link
Curve - What'up on Curve ? #163 - link
Synthetix - Perps V3 Features & Release Explainer - link
Akash Network - Q4 2023 Recap - link
Sommelier - Integrating Chainlink CCIP to Unlock Cross-Chain Yield Vaults - link
Railgun - 2023: A Year in RAILview - link
Paragraph - 2023 recap, & looking forward to 2024 - link
Hashflow - 2023 Year - In - Review - link
Mozaic - Community Call Update - link
Idena - Idena Chronicles - link
RabbitHole - 2023 Wrapped - link
Algebra - Weekly Digest #108 - link
AlladdinDAO - Monthly Newsletter - link
Alpha / Airdrops Whispers
Here I talk about undervalued projects that I have found and projects in which I participate to receive airdrops.
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