I see new deflationary tokens everyday and tokens coded to burn a % of every transaction, but at the end of the day each of these tokens are created with a zero sum game theory in mind. In other words, your investment in these tokens will not go anywhere unless fresh capital comes in to buy old capital out at a higher price. This makes shilling these supposedly “hard coded to appreciate in value” tokens absolutely mandatory or else no one invested will make any money, and I’ll get back to this problem later. To top it off, one would have to invite new investors en masse, then get out before everyone else in order to secure a tidy profit because as we’ve all seen time and time again, these tokens/projects that perform wildly spectacularly with their triple digit gains all collapse just as fast as they rise to popularity.
I’ve met others online who have continued to try to chase these ultra-popular tokens before they explode, and for every one success, they’re also roped into 5 other exit scams, failures, and everything in between. I did this too for a while until I got tired of it. From what I hear, it seems a lot of us are tired of running constantly after new tokens only to jump ship as soon as its profitable then running again to find another token to jump in and out of. This nets them about break even but includes an enormous amount of stress and lack of sleep. This happened to me, too.
Getting tired of getting rugged and dumped on, I went back to Binance and used my tools to do some good old fashioned chart analysis, make some buys, short sells, and made a consistent profit. It was an absolute breath of fresh air. I still do defi tokens from time to time but most of my portfolio is now on Binance and I fund some of the interesting defi buys I have with my profits instead. This is far less stressful, and carries a more balanced risk-reward management strategy. I transitioned into this model and I would never dare go back to 100% defi tokens anymore. I talked with some of my crypto friends and a number of them actually jumped into defi but never had any experience trading with charts, patterns, indicators, etc. So we made a little agreement where I would hold some of their capital and include it in my trading on Binance. I’d make a small cut and they could let me do the profitable but consistent work for them.
Unofficially, I had started a small crypto-investment fund. I’ve posted the results and gains/losses religiously on a channel (Link here) and maintained a “profit since inception” statistic at the end of every closed trade. It is a small long/short fund for now but I am now looking to move to the next step. A big hindrance even for existing investors is that there’s a lot of different trust factors involved. New and old investors alike send me Ethereum, and there’s always that concern at the back of their minds that I could just disappear.
Therefore, I thought of changing the structure of the fund into a Unit Investment Trust. In exchange for ETH to invest in my Binance portfolio, an investor would receive an equivalent number of tokens. These tokens would be tradeable on a Uniswap pair so they could buy or sell more as they pleased without needing me to be around. The ETH raised by selling these tokens would be used as the trading capital (and part of it to be used as the liquidity for the Uniswap pair) for the investment fund. Profits generated by trading activity of the fund would go back to buy tokens on the Uniswap pair to be sent to a burn address (posted publicly on the results channel) to to distribute the profits to all token holders by increasing the market price of the token (via Uniswap buy orders) and reducing the circulating supply (sending to a burn wallet). This structure makes it possible for existing investors to not need to invite new people in order for them to make money.
In the case of new investors coming in, their purchase would only compound the gains of existing investors. There will be a constant demand for the tokens because of the profit-based buybacks and what’s better is since these are only funded by profits, there is a theoretical infinite supply for buybacks. This is a safer, longer term bet on defi without the need to constantly join the chatter of new discord and telegram groups for new tokens all the time.
Finally, we come to how this will end. In full transparency, I as the manager of the portfolio will gain something at the end of all this. The Uniswap liquidity will be locked for 1 year, and the last few days before the unlocking, I will use the Uniswap price (date will be undisclosed to prevent gaming of the system) and have a smart contract made. Everyone may swap their tokens via the smart contract, at that fixed value for a week to allow ample time for everyone to offload properly. Once all the tokens are taken out of circulation and the funds are unlocked, I will be able to keep any remaining liquidity (therefore I have every incentive to drive the price as high as possible before the 1 year is up). Aside from this, I am also allowed to buy my own tokens in the presale, subject also to the max cap per head.
I get a nice gift at the end, I put my money where my mouth is by joining the investors in buying tokens, and everything wraps up nicely at the end of our one year together.
Any unsold tokens will be sent to burn address right before Uniswap listing.
30% of all raised funds will be used for Uniswap Liquidity, the remaining 70% will be set as trading capital.
20,000,000 PHX for Uniswap Liquidity
20,000,000 PHX for Round 1 Sale
50,000,000 PHX for Round 2 Sale
10,000,000 PHX for Marketing/Airdrop