Scythie’s Top Tips for navigating DeFi
At its very best, DeFi offers yield in the form of interest on your capital. At its very worst, it exposes you to the potential of losing it all.
In the competitive game of DeFI, there are thousands of ways to obtain positive yield and a thousand-and-one to trip yourself into negative yield. This space combines game-theory, economics, econometrics, software engineering and philosophy in an extremely competitive environment.
Luckily, Scythie is a pro.
Here are Scythie’s Top Tips to get us started in reducing your risk exposure and maximizing your alpha.
  • Establish the meta: Figure out the metatheory of the environment. This generally involves discovering how people and protocols usually behave in the environment. Doing Your Own Research is thrown around for a reason. It is essential to know the rules of the game but you must look at the game from different levels of abstraction to build an edge.
  • Know yourself and your competition: Find sub-games where you can compete. Most sub-games in DeFi, such as yield farming, participating in money markets, governance token staking are not always positive-sum games. Diving into the meta of the space provides insights into where an edge is essential. Understand your strengths and weaknesses, where you land on the information totem pole and put your money where your strengths are.
  • Practice: We talking ‘bout practice? Yup. It doesn’t matter if you’re the Allen Iverson of investing, DeFi isn’t a fixed-rule game like basketball, it’s a nascent environment and its game is ever-changing. Whether you’re starting off in your journey or a seasoned veteran, you should continuously question yourself and your investment strategies and should treat the latter as little science experiments. Play with small amounts until you feel comfortable suiting up for the big one.
  • Become a student of probability: Keep a record of your theses, your portfolio and consider journaling your progress, much like any professional trader or investor would. Success is generally fickle in a game that involves such high degrees of randomness like DeFi. Differentiating luck and skill is extremely difficult when money is involved; tracking and mapping your journey will give great insights into how big of a part either has played into your decision-making.
  • Make friends: The human brain has only so much bandwidth to offer one person. No one person can master all that DeFi has to offer. Participate in communities, throw ideas out there, ask thoughtful questions. Join a team. Time amongst other like-minded individuals is amongst the best primers to self-discovery.
And lastly, visit learn.bytemasons.com. ;)
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