The following is the third anniversary of my joining DeFi. I hope

31 pieces of wisdom that I hope can be passed back to me in time:

1. Taking profits and putting them into riskier bets is not taking profits - it's just gambling. Lock your profits in BTC, ETH, stablecoins and fiat currencies.

2. Projects with a cult following can be very profitable. Get out of the rocket before it inevitably crashes.

3. It’s not worth locking up your tokens to gain additional benefits. There's nothing worse than being tied to a sinking tank.

4. Protect your attention at all costs. Your time and energy are already limited, don’t waste it keeping up with the latest crypto drama.

5. Be careful about over-optimizing output – there is no free lunch. You stake your tokens, earn earnings, and then those earnings are compounded automatically. Every additional gain brings additional risk.

6. Be skeptical of every advice you see on CT – everyone has their own agenda. Are they boosting their interests with a shilling project? Are they spreading misinformation to game the Twitter algorithm?

7. When new narratives emerge, favor market leaders. They have first-mover advantage and mindshare. The best betas are forks on hot new chains.

8. Obsessing with the latest tool is a form of procrastination. You don’t need to use 50+ tools to make it. The biggest guys just use Etherscan, Debank, DeFiLlama, etc. "I'm not afraid of people who have practiced a kick 10,000 times, but I'm afraid of people who have practiced a kick 10,000 times." ——Bruce Lee

9. There is an information food chain. Builders > Ventures/Insiders > Whales > Robots > Manual traders who receive messages early (<span minute) > Manual traders who receive messages late (>1 minute). By the time everyone was tweeting about it, it was too late.

10. Alpha comes down to two things: access to inside information or the ability to do the hard work that others are too lazy to do. People underestimate how far you can go simply by focusing on media articles about the agreement and its dissonance.

11. Everything happens again, just repackaged slightly differently. The key to improvements in DeFi is pattern recognition. For example, if certain influencers start discussing a project, they are trying to attract exit liquidity.

12. Position yourself as early as possible and let the harvest come to you. Anytime you feel FOMO it’s a sign that it’s probably too late.

13. Thinking of your gains and losses as a percentage of your portfolio rather than dollars will help you stay rational. It's hard to keep a clear head if you equate trading with actual purchases.

14. Aggressively cut your losers. Set a stop loss before investing and know when to exit a trade. Don’t let small losers become big losers because of the sunk cost fallacy or emotional bias.

15. Document everything. Write about what’s happening every day in crypto, your trades, mistakes, and lessons learned. This is how to improve your mental algorithms.

16. Don’t overestimate the fundamentals of a bull market. All logic disappears and people buy based on hype, emotion and speculation. See the industry for what it is, not what you think it should be.

17. Incentives can drive prices. People buy when they have expectations of future profits. This can be influenced through airdrop speculation, locking tokens for additional rewards, ecosystem incentives, etc.

18. Don’t worship anyone. All the "smartest guys in the room" like Alameda and 3AC were criticized. No one is too big to fail. Protect your money when bankruptcy rumors arise. If you're right, you've saved a ton of money. If you're wrong, you'll be inconvenienced for a few minutes.

19. This is not a question of right or wrong. No one bats 100 percent of the time. It's about maximizing gains when you're right and limiting losses when you're wrong.

20. Narrowing your focus is an underrated advantage. No one can keep up with the entire space. Pick a few areas and stay ahead of the curve.

21. Keeping up with macro is overrated. Just monitor the capital flowing into the market and see when we get back. Your time is much better spent elsewhere. "Economists have an extremely poor record at predicting events. It's beyond simplistic; it's like medieval medicine." - Nassim Nicholas Taleb

22. Do not touch cryptocurrencies if you are emotionally disturbed, drunk, or sleep deprived. One mistake can ruin years of hard work.

23. Stablecoins are not as stable as you think. UST collapsed and USDC had a decoupling scare. It is entirely possible to store dry powder as fiat currency in a TradFi bank.

24. If you want to grow your portfolio, concentrate it; if you want to preserve it, diversify.

25. Development Systems – These rules and frameworks will prevent emotions from ruining your game. These can include how you profit and when you invest.

26. It’s unrealistic to think that you can grow your portfolio 100x through trading. This is no longer 2016. 99% of people would be better off trying to find ways to increase their cash flow and commit to more goals.

27. The public prefers new projects and new stories to 2021 bags. Don't fight human nature.

28. Be skeptical of every advice you see on CT - everyone has an agenda. Are they boosting their interests with a shilling project? Are they spreading misinformation to game the Twitter algorithm? Take good care of yourself.

29. Stop limiting yourself to crypto content. You'll learn a lot more from game theory, behavioral economics, and psychology than reading the 9th article about EigenLayer.

30. The best projects have both basic and fundamental elements. Uptrends attract attention, while fundamentals give people reasons to hold on.

31. Unknown, unknown is fatal. The founder gambled away the treasury, or the anonymous founder has a shady past. You can't predict them.

Author: Edgy - DeFi Edge