Bearing with Bear Markets • CEO Letter #28

Happy Thursday the 13th! Is today more or less lucky than usual? Let's go with more 😉 This is Taylor, CEO of Hedgehog, where you can track all your different crypto wallets *and* trade using your favorite crypto exchanges. Hedgehog makes it easy to manage your whole portfolio in one convenient spot. In this newsletter, there's a giveaway every week — to enter, answer the question at the end.

Once again the words "bear market" are bouncing around Crypto Twitter. Here's my commentary on recent price action:

The cryptocurrency sector remains as volatile as its youth, like a 17-year-old joyriding a motorcycle. Even just looking at the age of bitcoin, the big daddy OG, consider that investors often measure ROI over decades rather than months.

Remember your strategy and your risk tolerance — are you actually trying to double your money in a week, or planning for longer-term financial security? Zoom out from the daily and weekly charts to look at monthly and yearly versions.

As for the short-term investors, they claim to like volatility. I suppose what the Twitter traders fear is a long stretch of horizontal movement. (Is anyone expecting crypto to fully fail anymore?) Nonetheless, look at that chart again — bitcoin was a better buy-and-hold pick in early 2019 than any point since. Not that past performance is any guarantee of future returns or that I would ever suggest anything to that effect.

Stories that caught my eye…

Signal creator Moxie Marlinspike caused a big splash with his in-depth criticism of web3. Summary: What’s up with all this decentralization theater? A highlight: "It doesn't functionally matter that my NFT is indelibly on the blockchain somewhere, because the wallet (and increasingly everything else in the ecosystem) is just using the OpenSea API to display NFTs, which began returning 304 No Content for the query of NFTs owned by my address!"

Naturally, ethereum creator Vitalik Buterin responded: "I think the status quo comes from a present-day 'missing middle' where we have centralized-but-easy things and decentralized-but-hard things, but new tech (w lots of cryptography!) actually is on the cusp of giving us the best of both worlds."

Tldr: A mere two weeks ago, in this very newsletter, "Web3 will be real, but currently it's still loading. Like the metaverse!" Am I reusing this joke? Yes. Does it still make me chuckle? Also, yes. HA. HA. HA.

Interesting article from Brady Dale about DeFi problems:

DeFi had a good 2021 but the tokens underlying the big protocols did not. DeFi tokens have been hammered, and many of their investors are wondering if they shouldn't have just bought and held ETH instead.

Founders and DAOs are looking for ways to enhance the value of their tokens. More seem to be following the lead of Curve Finance, which has required DAO participants to lock their CRV tokens up to participate in governance ever since the governance token came out in 2020.

He lists various examples, check it out.

Other weird DeFi stories include the saga of the Pudgy Penguins, an NFT project that sounds similar to one of those Kickstarters where the creator bit off more than they could chew: "... it's not clear that the penguin creators ever committed to devoting all or most royalties to the penguins. However, there's a growing mood in the NFT world that that is how projects like this should work, which is interesting because early in the NFT boom such royalties were touted as a way that artists could finally profit from their work."

Next thing you know, Pudgy Penguins will be underpinning the modern economy.

In the realm of DAOs: if you can figure out what is going on here you deserve some kind of award. We can call it the web3 award.

NFTs:

• Ape this, Ape that, which are the "legit" Bored Ape spinoffs? Here's a list — I, for one, had forgotten about the Kennel Club.
• A thoughtful NFT collector from the Tezos ecosystem discusses "the 'levers' of edition count, price, and drop strategy" and how artists can encourage a market for their creations.

Tldr: The tricky thing about riding a rollercoaster to the moon is engineering it into a spaceship mid-flight.

I liked this Reddit thread: "Alright, I admit it, I work in tech, I have been in crypto for 4 years or so, and I genuinely have no idea what crypto is used for other than an investment or money transfer product. You can make apps on it?" A great conversation developed in response and OP was a real mensch to type up his summary of the many comments that he received.

Giveaway question of the week: What is your main use for crypto? Respond to this email with your answer to enter to win a Ledger Nano S hardware wallet.

Definitely not tying a rocket to my Jeep,
— Taylor

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