La Crypto C’est Rigolo
I’m launching my own crypto fund — why? how? 👇
I’ve always been convinced not to underestimate the power of fun. MEMEs, fun, entertainment… they’re all very important. I recently stumbled upon a quote from Elon that pinpoints why:
Or maybe, an even better and simpler way to put it is:
Projects ignoring fun (or projects with no soul) are missing out. “Serious” people might dismiss these as mere toys. But they’re not. I’m very serious about fun.
So, just for fun, let me tell you about my worst investment.
My worst investment 📉
You might all be familiar with the ICO mania of 2017/2018, with scammy projects raising millions in seconds. It always bothers me that we are never given these project’s names — we want to remember the pets.com of our time!
Behold! Here’s a little treat for you. The worst investment of my life was a token called WellTrado (WTL). I bought 100 WTL for $60 in April 2018. Now valued at around $0.5, it adds up to a whopping 99% loss (so brutal… I love it).
At that point, I had been investing for several months, and still had no clue about the crypto world, even though it seems pretty obvious now that this “global investment marketplace” project was archetypically scammy. Thankfully, I was broke, so couldn’t invest much more!
Now, if you think such a small investment amount wouldn’t make a difference anyway… you’re going to like what follows.
My best investment 📈
A pair of socks (yes, socks). Bear with me.
This website allows people to buy or sell tokens called SOCKS at a price which is following a pre-determined curve: this first SOCKS was ~$12 and the 500th cannot be bought with all the ETH in existence. These SOCKS tokens can be used to redeem pairs of physical socks. Simple.
I bought one SOCKS token in September 2019 for ~$40. This month it almost reached $100k. (It was $30k when I started drafting this article…!)
But there’s more.
Because I had bought one SOCKS token, I was given 1000 UNI tokens when Uniswap (the most popular decentralized exchange) made their announcement last year. These 1000 UNI are now valued ~$20k.
For $40, invested 18 months ago, I now have $120k. That’s a 300000% gain.
Anyone (with an internet connection) could buy SOCKS in 2019, but it took a bit more knowledge about the project, what it was, and why it could be interesting. To be clear, nobody knew SOCKS would blow up that way. This was just the first consumer goods dynamically priced on a bonding curve. Experimental and fun, really!
Being serious about fun 👨🏫
It takes time to understand a new world. I started building on Ethereum in January 2018, and investing too, mostly to have extra incentives to research the space. I made some mistakes — very bad investments — but I kept trying, kept reading, kept playing, kept building.
Making it fun has been the secret of my success so far.
And, after more than three years focused 100% on crypto, many of my investments turned out to be “pas mauvais” at all. So, even though “past performance is not indicative of future results”, now seems like the right time to start letting some friends follow me on my crypto investment decisions.
(I hate bull markets. They make me queasy. But I can thank the last bull market for pushing me to go all-in on crypto in January 2018. I was getting so tired of all that “blockchain” bullshit that I decided to redirect my career entirely towards crypto to detect snake oil faster)
Why a fund? (i.e. the problem with crypto today) 🤕
There used to be a place in the sun for everyone in crypto: fees to transact on the network were low, and the price of the native asset (ETH) was low as well… good times!
Now, the Ethereum blockchain is congested; it lacks the capacity to accommodate all the users and bots trying to join. This isn’t a weakness as such, it simply means that Ethereum has reached the infamous Product/Market Fit, and scaling solutions are coming at a very fast pace (zk-Rollups, for example, have progressed from research topic to production app in just a year!).
But, at the moment, it hurts. A basic DeFi action (lend, borrow, swap etc.) has a flat fee of ~$100. This could be deemed acceptable for amounts greater than $10k but for smaller ones it’s an economical nonsense.
Also, let’s talk about complexity. Buying ETH or BTC is bloody easy; it’s one action (convert from some dirty fiat money) and you know what you’re getting (a token with a price equivalent).
But providing liquidity into Curve’s stETH pool and staking those LP tokens to get CRV and LDO rewards is something different. Or even buying short iToken on Synthetix requires a bit more research and monitoring than just holding Ether or Bitcoin.
Traditional finance people love to make simple things sound complicated, even though most of the time it’s only basic high school maths. But in the case of DeFi it actually gets a bit more intricate because all these simple financial primitives are composed and recomposed at programming speed.
The solution: pooling assets 👯
Complaining about gas fees or DeFi complexity is a very passive attitude — and we don’t like behaving like victims.
It’s crypto. We adapt.
The obvious answer is to pool assets. As mentioned above, the fees are high, but the fees are flat — so it’s worthwhile transacting with bigger (pooled) amounts. One fund manager will invest for all their investors at once.
Crypto being crypto, the investors can buy and sell shares in the fund whenever they want and in a non-custodial way. The manager has no access over their money (apart from investing it within the constraints of the fund). They can also transparently access all the fund’s history and metrics at all time.
How is it possible? Thankfully, some people built a protocol (and interface) for on-chain asset management.
I found out about this Enzyme protocol while listening to an episode of The DeFiant’s podcast with Mona El Isa. She explained what it takes to set up a fund in the legacy world in terms of time and money — short answer: a huge amount! In contrast, in the crypto world I can now deploy my own fund for ~$100 and let my friends deposit DAI (our favourite stablecoin) from the comfort of their WalletConnect-enabled wallet.
Which all leads me to introduce my new fund….
La Crypto C’est Rigolo 🤪
It’s French for “crypto is fun”. You should get why I picked this name now!
First, I set up a fake account on testnet, so I could get familiar with the process of opening and operating such a fund. Then I looked at existing funds on mainnet, and also looked at the documentation and some bits of the codebase. I finally settled on the following:
- The fund will be denominated in DAI
- The strategy will be discretionary (à la carte)
- The management fee (covering my gas expenses) will be 1%
- The performance fee (my cut on profits) will be 10%
- There will be a whitelist for investors so I’m sure to know people who join (and that they behave properly)
- Under 5000 DAI ($5k) it still unfortunately not worth joining the fund (because the transaction to buy shares is ~100$)
The last thing required was to write about it (this article) and now I’m ready to deploy it and start collecting ze moni!
Crypto curious? Get in touch.
Merci Becky.
