Four Ways to Secure Your Wealth in the Cryptocurrency Market

In the

cryptocurrency

market, how can individual investors acquire their own wealth？ Warren Buffett once said, “Every penny you earn is a reflection of your understanding of the world.” Essentially, to attain wealth, apart from luck, it is crucial for anyone to enhance their knowledge and then transform it into wealth through appropriate channels of realization.

Due to its nascent nature, the cryptocurrency market possesses several distinct characteristics, such as significant growth potential, abundant opportunities, and unique economic logic. Moreover, the relatively low entry barriers to this industry provide numerous opportunities for individuals to earn wealth from its diverse offerings.

Based on these characteristics, here are four ways to accumulate wealth in the cryptocurrency industry, along with methods to effectively screen projects:

• Research-Based Investments

• Airdrops

• Building Influence

• Resource Monetization

1.Research-Based Investments

Investment is a vast concept that can be classified based on capital transaction stages into primary market and secondary market, and based on investment horizons into short-term, medium-term, and long-term.

For individual investors, opportunities to participate in the primary market mainly come from CEXs' IEOs and various Launchpads. Users can assess their chances of profitability by familiarizing themselves with the exchange's rules and understanding the fundamentals of the projects.

Generally, CEXs' IEO projects do not allow prices to fall below the issuance price, so users only need to observe the performance of the initial IEO projects to decide whether to participate. For example, projects launched on platforms like Binance and Coinlist often experience significant price increases. Another example is FTX, which used a lottery system for its IEO projects before its bankruptcy. Users who met the requirements and were selected in the lottery could earn substantial profits, sometimes reaching tens of thousands of dollars.

Participating in long-term investments can often lead to higher success rates. Here are some strategies for long-term investments:

1）Look for projects that address industry pain points based on industry development

In the early stages of DeFi, blockchain struggled to access off-chain data, limiting its functionality and use cases. Smart contracts were susceptible to manipulation or attacks, and project interoperability was restricted. The emergence of Chainlink helped solve these pain points for DeFi projects, making it valuable. For example, Ethereum's TPS limitations created strong user demand for Layer 2 solutions, leading to high funding for projects like Arbitrum and Zksync.

2）Invest based on chip distribution analysis

Build positions in BTC and ETH based on the chip distribution. Why BTC and ETH？ BTC and ETH have already established their dominant positions in the industry. When funds continue to flow out of the industry, the market share of BTC and ETH tends to increase.

Investors can use tools like Glassnode and establish their own indicators (e.g., Dune Analytics) to observe the current market conditions.

For example, using Glassnode's Reserve Risk indicator. Reserve Risk is defined as price / HODL Bank. It is used to assess the confidence of long-term holders relative to the price of the native coin at any given point in time. When confidence is high and price is low, there is an attractive risk/reward to invest (Reserve Risk is low). When confidence is low and price is high then risk/reward is unattractive at that time (Reserve Risk is high).

2.Airdrop

Airdrops are commonly used by blockchain projects as a means to expand their user base, increase community engagement, boost brand visibility, and compete with rivals. Airdropping tokens to users has become a common practice in the blockchain industry. For users, it offers the opportunity to obtain higher returns with lower costs.

Indeed, project teams often refrain from disclosing specific details about airdrop incentives and selection criteria to avoid potential malicious attacks. However, by retrospectively analyzing past airdrop projects, users can still identify certain projects with a higher probability of distributing airdrops. This strategy can help increase the chances of receiving airdrops from selected projects and improve the overall success rate.

In order to increase the chances of receiving high-value airdrops, users can consider the following criteria when selecting projects:

1) Projects with a large user base, such as public blockchain or exchange-related projects. These projects are more likely to attract high-value users and incentivize them to stay within the ecosystem through airdrops.

2) Projects with significant fundraising amounts. A high fundraising amount indicates that the project team has sufficient funds to invite market makers for maintaining the

token price

after the Token Generation Event (TGE).

As an example, let's consider Optimism and Arbitrum, both being layer 2 scaling solutions for Ethereum. Optimism was among the first to conduct airdrops, distributing 19% of the total token supply through airdrops. Users on Optimism can receive different amounts of airdrops based on various actions, such as cross-chain transactions, activity level, participation in governance, Gitcoin donations, and more. The rewards for different actions can be stacked, providing users with the opportunity to accumulate a higher total amount of airdropped tokens.

Indeed, as a competitor to Optimism, Arbitrum witnessed strong expectations from blockchain users regarding its airdrop. As expected, Arbitrum distributed airdrops to users based on various factors, including cross-chain transactions, transaction frequency, interaction with dApps, and total transaction value, among other comprehensive data.

In an industry where “airdrops” have become the default norm, and competitors have already executed airdrop campaigns, choosing not to conduct airdrops could be detrimental and lead to user attrition.

3.Building Influence

In the industry, gaining influence can open up various opportunities to create wealth. For instance:

• Becoming a Key Opinion Leader (KOL) and building a substantial follower base, thereby monetizing through sponsored advertisements and endorsements.

• Leveraging the commission-based programs offered by centralized exchanges (CEXs) or decentralized exchanges (DEXs) to invite users for trading and earning commissions.

• Serving as an ambassador or moderator for blockchain projects, which can offer rewards and incentives, providing an additional stream of income.

4.Resource Monetization

Successfully monetizing resources requires having sufficient resources and the ability to integrate them to meet the diverse needs of clients and negotiate effectively. With access to institutional and project-related resources, one can earn commissions by assisting in project financing and facilitating institutional investments.

Additionally, many projects seek to be listed on centralized exchanges, providing an opportunity to earn commissions by assisting projects in getting listed on these exchanges.

Investment Disclaimer: The information provided in this article is for informational purposes only and should not be construed as investment advice. The content does not constitute an offer, solicitation, or recommendation to buy, sell, or hold any assets or investments. Readers are urged to conduct their own research and seek advice from a qualified financial professional before making any investment decisions. The author and publisher of this article will not be held responsible for any investment losses incurred as a result of following the information provided herein. Always be aware that the cryptocurrency market is highly volatile and carries inherent risks.