When most people get started investing in crypto they are usually very risk-on and will play the markets like a casino - we call this behavior “being a degen”. As one accumulates more wealth over time, they tend to become more risk-averse and conservative - we call this “being a crypto boomer”. Of course, this is a basic view of the actors within the crypto markets, but I’ve seen the pattern play out over and over again and there are both positives and negatives to this.
I didn’t really partake in the crypto degen behavior until DeFi summer in 2020 where I was basically throwing too much of my portfolio into random “food farms” to get the juicy 4-5 figure APY’s, speculating on random tokens, and using leverage for the first time in my crypto investing career. It was super risky and I could’ve lost everything - but it was an extremely fun (and necessary) learning experience. These days, I am much more conservative and mostly just hold ETH and because of this, I feel like I’ve lost touch with the more degen side of crypto and by extension, the more innovative side.
There are plenty of things happening in the crypto ecosystem and plenty of projects being spun up all the time. Many of these projects are just forks, copycats and scams, but there are a few that go on to change the game with groundbreaking innovations. Early DeFi had Uniswap pioneer the AMM exchange design, MakerDAO popularized the concept of a decentralized stablecoin, Yearn kickstarted the yield farming revolution and much more. Now, with what people are calling “DeFi 2.0”, we have new features like better tokenomic designs (veTokens), concepts like protocol controlled value (PCV), “bribing” mechanisms and more. Though unless you’re directly involved in these projects as a speculator/degen (or builder), you’ll probably find it very hard to keep up with them let alone understand them. Many of them are very new, cater to the most risk-on people in crypto and have a high chance of failure - but if you’re a degen they are a perfect playground.
I often wonder if its just everyone’s destiny to become a “crypto boomer” because it’s the best mindset to be in if you want to conserve wealth. I mean, most people are content with a certain amount of money and as you accumulate more of it, you slowly switch to protecting what you have instead of trying to maximise returns by risking it all. Of course, there are some people who treat wealth accmulation as a game and see their net worth as a score on a leaderboard that they want to keep increasing - but for most people there’s only a marginal benefit of an increasing net worth passed a certain point.
I think the best approach in crypto is to always keep a little bit of the degen spirit alive - if only to be able to keep up with this crazy ecosystem. There’s plenty of innovation hidden behind what may look like “ponzi games” on the surface and you’ll miss it if you’re stuck in boomer mode all the time. But I’d also argue that there’s so much going on in crypto that it’s impossible for any one person to keep up with it all regardless of if they’re a degen or a crypto boomer.
Have a great day everyone,
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All information presented above is for educational purposes only and should not be taken as investment advice.