Random Observation #695: Composability and active personal digital asset management is under-valued within the cryptocurrency space.
Why this list?
Bitcoin is the pet rock blockchain. You can buy it, spend it, and save it, but that’s pretty much it. If you want to build applications and services on top of a network, I would recommend Ethereum. There's so much more you can explore as a platform for true network-of-network effects.
If you were given a digital asset within a permissioned network (e.g. gift card that you can only spend at a store), the value of that asset within the network is only as powerful as the integrations with everyday usage (e.g. wherever the gift card points are respected and redeemable). Even if I had a "<platform>coin" in a <Platform> Network, I may be able to pay for software licensing costs, but there wouldn't be enough integration or marketplaces for increasing the value of a "balance."
With the established infrastructure of CeFi (e.g. Centralized crypto exchanges) and DeFi (decentralized finance) exchanges and asset pairs, you can access a whole new ecosystem of fungibility. Most people will likely just treat cryptocurrency as a speculative investment, but I highly suggest playing around with these options. I’d compare the innovation of HODLing to reading a static website vs experimentation which could lead to building an e-commerce platform.
Buy and HODL. Basically the main strategy for most people who are looking at this as an asset class disconnected from the financial markets. This is basically what you do with stocks, which is why some people classify these as commodities like gold, securities, and investment vehicles.
Send some of it to your friends. Help them create a MetaMask wallet and show how you can send instantaneously between wallets. MetaMask Mobile also has a great built-in web browser with recommendations of decentralized applications you can try out..
Build with ETH! ETH is computational power. You need it for gas and funding smart contract execution. I personally love Austin Griffth’s eth.build platform for learning the web3 components. Of course, you would likely just use Rinkeby testnet ETH before pushing to mainnet.
Directly Swap it for other tokens using MetaMask Swaps functionality - If you want direct portfolio spot exposure to these tokens you can look at the full list of available tokens and directly convert your ETH to these tokens with aggregated best prices. It should be available directly on your browser extension and coming to mobile very soon.
Stake ETH for long term perpetual bond gains (ETH2 staking). Consensys has an Institutional-level Staking-as-a-Service product called Codefi Staking, but I personally experimented with staked.us, built for retail users.
Stake ETH to support other projects. Each project provides different staking stipulations like % rewards and lock-up periods. These projects usually represent non-Ethereum blockchains and the Staking Service would help with custodying your ETH while it is converted and deposited to contracts that earn interest. I’ve personally staked with Polkadot (DOT), Synthetic (SNX), and Tezos (XTZ).
Participate in a Lossless Lottery like PoolTogether. “Lossless” meaning the pooled funds will be added to monthly investment/lending options like the ones mentioned above to return interest. The “winner” would receive the pooled interest and everyone receives their money back.
Bet on the Prediction marketplaces like Augur and Gnosis. These Dutch auction betting platforms have been around for a long time and hit a bit of a road bump when it was used as a way to hire blackmarket assassins by listing whether or not people should live or die on the two-sided marketplace. Awkward.
Try Virtue Poker. I’ve beta-tested this and it was super fun. This will be launching on mainnet soon. It’s just the regular experience you’d have with online poker, but everything (including the randomization of cards) is decentralized and auditable with Ethereum smart contracts.
Explore a number of games and marketplaces through the MetaMask mobile app. I personally like My Crypto Heroes as it shows a lot of the innovation building out this ecosystem. Sometimes you forget that the assets that are created can be sold for real money.
Complete or Issue Gitcoin bounties to support open source projects. I’m personally a big fan of Gitcoin and the open source community. If I ever become crypto-rich, I’ll be sure to create a lot of fun open source bounties for people to complete. Another take on this is Ethlance.
Buy your own <ENS>.eth domain. Tying your complex address (that looks as puzzling as an IP address) to a domain name. It’s literally the first application that came out, which provided people who squatted on DNS domain names or early email addresses to buy up as many short letters as possible. Luckily, I got clemens.eth in 2017.
Create a social profile linking your twitter and github accounts on 3box . 3box has built a lot of connections to other dapps as a base identity layer.
Create and Sell or Buy collections of NFT Artwork via SuperRare or Rarible. Make your own artwork and sell it on the platform. It’s a bulletin board marketplace for orders and very difficult to know pricing of illiquid assets, but there’s some talented artists out there. I think a lot of people are supporting the ecosystem by using it and buying some collections.
Browse the endless number of NFTs on Opensea. There are other NFT marketplaces, but I think this one has become the Ebay of NFTs. I personally think the added value to NFTs is the conversion to physical → digital. Imagine if the NFT representing scarcity would be able to be passed to a company that creates a physical asset in exchange of ownership.
Play around with Sushiswap. Remember that it's real money and not just pressing buttons and buying sushi rolls. To an outsider, this is the gamification and clear exploitation of user experience addictiveness applied to DeFi.
Buy a bunch of random stuff on purse.io. I remember using Purse back in 2016 to test it out. It was a very expensive random Amazon purchase. It’s actually a brilliant way of building a marketplace by taking advantage of a bull market BTC run. The earners and buyers of your goods would guarantee order delivery and receive BTC as payment while redirecting them to place the order. The platform doesn’t actually hold BTC on its accounting and facilitates fulfillment.
Download Brave Browser and use BAT to pay advertisers. There’s an embedded crypto wallet in the browser that gives you Basic Attention Tokens (BAT) that can be rewarded to advertisers of sites you frequently visit. It’s an awesome way token economics can rewire the advertising industry.
Deposit ETH to different Collateralized On-chain Loans. On-chain smart contracts (e.g. Compound, MakerDao CDP, Aave, etc) provide marketplaces with % returns. Your deposits or will earn interest as they’re being used as collateral.
Deposit tokens to Automatic Market Makers (AMMs) as a Liquidity Provider. These liquidity pools (e.g. Balancer, Kyber Network, Curve Finance, Uniswap, etc) provide trader fee returns for being a liquidity provider. This is fairly advanced and probably not recommended unless you know what you’re doing. I don’t think you’d be reading this if you were already a professional market maker.
Deposit tokens into a Portfolio Management Service. You can use centralized services like a Robo Advisor that diversifies across multiple tokens. This is similar to Private Banking, but the returns look pretty good on staked.us RAY. They are just sending your funds across multiple lending platforms. You can also do this yourself by comparing the lending platform performances at defirate.com or with Consensys’ Defi Score and Compare. You can also use a management service like DefiSaver which will try to keep your leverage based on market movements to protect against liquidation.
Invest in Voting Power by depositing ETH in return for Governance Tokens. If you use any of these protocols and marketplaces, I’d highly recommend having at least some stake in the governance tokens. Not only have they had a very high yield, but they do allow you to vote on their platform and participate in their listings and roadmap features. I’ve personally looked at SNX, MKR, and AAVE (prev LEND). I see the participation in these networks as “protocol politicians” with sway to rally and list features.
Convert it to a Stablecoin. If you’re nervous about the price fluctuations, there’s always the option of converting your tokens to USDC or DAI. The early usage of stablecoins was to keep people on exchange platforms, but now it’s become a new interest-bearing on-ramp for services.
Buy Insurance against Contract Failure with NexusMutual. I don’t think most people will buy this, but it’s an interesting way to look at a smart contract design pattern. The new token here represents a cover to your existing exposure. I would like to see what happens when there are systematic payouts.
Donate some of it. I think the major exchanges have an option for this. I know Coinbase uses www.givecrypto.org with direct integration.
Write a Crypto Will to make sure there's a digital legacy. There’s different ways to do this and I think there’s a market for providing these services with social recovery contracts. I know the openlaw.io team has thought about this and we can build something with trusted custodial services.