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The Best Tools You Need to Succeed in DeFi Have Nothing to Do with DeFi at All
Good general knowledge for everyone
In traditional finance, your best weapon is a fat stack of capital.
The rules of the game are firmly established and highly regulated, and though the rewards aren’t anything crazy, neither is the risk. You can feel relatively safe investing your money and turning a profit.
In the Wild West of DeFi, if you show up with a wad of cash expecting to strike digital gold, your money could be gone faster than you can say “rug pull.”
The further I dive into DeFi, the more I realize these 3 topics mean everything:
Microeconomics and supply vs. demand
Cryptocurrencies i.e. “tokens” are not the same as shares. Shares are highly regulated. Tokens can be printed solely at the developer’s discretion.
Understanding supply and demand could mean the difference between boom and bust. You need to know things like:
- How many tokens exist and what are the supply caps?
- How strong is the demand for this token? Why?
- Does it have actual utility? Or is it just hyped?
