Source: TradingView, CNBC, Bloomberg, Messari
Hindsight Capital is Killing It – but Foresight Capital Can Still Do Well
Despite all these good calls, Hindsight Capital still outperformed us by a wide margin. Ideas are always a dime-a-dozen, whereas finding the best ways to express these ideas with the proper sizing and appropriate timing creates alpha. In hindsight, owning a portfolio consisting solely of Solana (SOL) Grayscale’s GBTC and ETHE trusts, Coinbase (COIN), a few Bitcoin mining stocks, Nvidia, AI tokens and Thorchain (RUNE) was evident. Some of these were even obvious in real time. But overall, investing in digital assets is still challenging, even when it seems like prices are going up every week.
Source: Trading View
However, it’s possible that Foresight Capital is about to give Hindsight Capital a run for its money because the playbook has already been perfectly executed once before. “DeFi Summer” is the term used to explain the massive liquidity and infrastructure growth that led to the transformation of DeFi in 2020. It was kicked off by Compound (COMP) and Uniswap (UNI) airdropping tokens to their user bases, creating instant wealth and turning each beneficiary into lifelong evangelists and power users of the platforms. Yield farming followed after that, and an 18-month bonanza of higher usage and higher token prices led to more usage and higher token prices.
DeFi summer was the closest that the industry has gotten to fully embracing the democratic vision of blockchain — namely, that early adopters of technologies and products could get rich for being early customers. This vastly differs from the traditional economy- early Amazon shoppers didn’t get rich from Amazon’s success. Early iPhone users didn’t get rich from Apple’s success. Early airline customers didn’t get rich from Delta and United’s success. But in crypto, early users of certain DeFi, NFT and web3 protocols and applications are getting rich from their success.
And it’s all happening again, most notably in the Solana ecosystem.
How to Make Money In 3 Easy Steps - The JTO Way
Written by Kyle Doane, Trader at Arca
Enter Jito. Jito is a dynamic liquid staking protocol built on Solana that recently launched its governance token (JTO) on December 7th. The initial circulating supply was airdropped to those who staked SOL on the platform and to validators that leveraged the Jito network’s on-chain programs.
As background, the SOL token is tradeable, and the Solana network is integrated into all major centralized exchanges, making it relatively seamless to begin interacting with protocols on the network. It’s also very simple to download a digital wallet compatible with the Solana network (for example, Phantom). Once a user stakes SOL and earns tokens in their digital wallets, users can navigate to the Jito protocol, connect their wallet, and select “stake tokens.” The staking transaction is very simple and straightforward, helping users learn about new protocols (in this case how to help secure the network) and being heavily incentivized to do so.
Airdrop recipients received a minimum of 4,941 JTO tokens for simply staking at least one SOL token on their platform. Initially, Jito gave out points for SOL staked on the platform, i.e. stake pools. The airdrop was based on the number of points a wallet had earned before a November 25th snapshot. At the current price of JTO, the minimum airdrop participant earned almost $15,000 worth of free tokens.
Earning the airdrop was as simple as going to the Jito website, connecting your wallet, depositing at least one SOL token, and receiving one JitoSOL token in return. JitoSOL, its flagship asset, is basically a depository receipt for staked SOL. It generates yield from the Solana network's staking processes and extra revenue from Jito's MEV-style approach to auctioning blockspace. Over the time frame of the airdrop, the price of JitoSOL rose in value as well.
Since this airdrop was on the Solana blockchain, which is fast and cheap, the fee to claim your airdrop was only around $.01.
The JTO token experienced a trading volume of $1.1 billion within its first day of trading. The token distributed to community members began trading at around $2, increasing by approximately 45% to $2.90, and hit a high of $4.21. Currently, the token is traded just above $3.00, resulting in a fully diluted market capitalization of $2.9 billion. The total supply of Jito tokens is capped at 1 billion, with 115 million currently in circulation.
How to Farm Future Airdrops on Solana
Airdrops are quite possibly the easiest way to learn about the mechanisms driving the crypto ecosystem and earn rewards for participating, thereby increasing your wealth. For anyone even remotely intellectually curious about digital assets and blockchain, we recommend figuring out how to participate in airdrops. Numerous other airdrops will happen in the coming months, and all you need to do is participate in the protocol to reap the benefits.
So, what’s next for Solana? It is rumored that MarginFi and Kamino will be the next Solana-based protocols to airdrop tokens. However, as more people farm for an airdrop, typically the rewards will decrease. More people are going after the same pie. We have seen a massive inflow of users to Solana since the JTO airdrop, and therefore, we do not expect upcoming airdrops on Solana to reap the same level of rewards as the JTO airdrop. However, with a bit of research and poking around, there are dozens of other applications that will potentially do airdrops as well. Can it be confusing? Sure. Is it worth it? Probably.
As indicated earlier, the concept of airdrops is not new. There have been dozens of projects that airdropped tokens from 2020-2023. Even if the idea of essentially receiving “free money” from the airdrop feels uncomfortable, receiving airdropped tokens can get users involved early in the token’s trading life. Hats off to Arca’s newest portfolio team member, Joey Reinberg, who analyzed all prior airdrops.
It’s important to note that while airdropped tokens generally perform pretty well in the immediate short-term, the tokens struggle a bit as air-dropees begin to monetize their newfound riches, resulting in only a few tokens achieving real sustainable growth.
Source: Arca internal calculations