Onchain Wizard's New Year Outlook: Continuously bullish on Perp DEX, focusing on new opportunities in Layer1
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Onchain Wizard's New Year Outlook: Continuously bullish on Perp DEX, focusing on new opportunities in Layer1
Next year will be a "token picker's market."
Navigating Web3 tides with focused insightsOriginal: Onchain Wizard
Compiled by: TechFlow
This article outlines my positioning for 2023, shared with all of you. These are summary-level theses that I plan to explore in greater depth over the coming months to add context behind my thinking. Please note that many of these carry high risk, so DYOR—this is not financial advice. I will be holding and purchasing the tokens mentioned below, so clearly I am biased.
Long ETH / Short BTC
This is certainly not a contrarian idea—I believe it's valid. Since The Merge, ETH’s supply-side dynamics have clearly improved, while BTC must contend with
(1) significant selling pressure from miners,
(2) Mt Gox-related sell pressure,
(3) any noise surrounding GBTC.
ETH/BTC has traded sideways for five consecutive months. I believe that as macro/fiscal conditions improve in the second half of 2023, ETH may challenge BTC more aggressively.
BONE
I believe SHIB’s Shibarium blockchain launch in 2023 will attract significant attention from DOGE/SHIB and other meme coin holders, and could very well spark a Degen-fueled frenzy on-chain. Smart money will likely accumulate the token ahead of its launch; currently, BONE has a fully diluted valuation (FDV) of $196 million.
If real activity emerges on the new chain, BONE could become a relatively attractive speculative asset compared to other chains. Tweets related to BONE have seen strong engagement, indicating that retail remains interested despite the depths of the crypto winter. Thus, assuming next year turns out to be a “better” one, I view BONE as an interesting beta-risk asset play.
rDPX
The v2 upgrade of rDPX is the main catalyst for this token, expected to launch its testnet in early February with audits underway, followed by a full rollout. Smart money has been accumulating the token, and its community remains one of the strongest I’ve seen during this bear market.
With a current market cap of approximately $43 million, I believe a successful V2 launch, improved financials, and additional product releases on the Dopex roadmap could give this token at least $100+ upside sometime next year (and even higher if we enter an "echo bubble"). Currently, its token emissions have also been paused for several months, so the supply-side structure is quite solid.
Berachain
I previously covered Berachain here, explaining why I find its architecture and community more compelling than most other new chain launches. As ecosystem projects begin building on it, there will likely be opportunities in small-cap tokens once the chain launches sometime next year. Alternatively, you can try earning an airdrop via NFTs/Honeylist or purchase tokens during their public sale.
Long GMX/GNS, Short DYDX
This is another trade pair. To date, only GNS and GMX pose clear competitive threats to DYDX in terms of market share and yield.
Meanwhile, DYDX faces an unpleasant token unlock schedule in 2023, beginning in February. Following the FTX collapse, there has been growing interest in on-chain trading. This trade expresses my long-term bullish view on DEX perp adoption, while hedging downside risks due to DYDX’s brutal year-long unlock cycle.
Long UNIDX / Perp DEX Aggregator (Warning: Degen)
Every new project is launching a Perp DEX, but eventually, a killer app will emerge—one that aggregates all perpetual products into a single platform.
Traders will pay higher fees for the convenience of leveraged trading from a single source (I know I would), and from what I understand, Unidex is building exactly this aggregation product. This is a theme I am highly bullish on.
Factor Dao / FCTR (Also Degen)
I’m bullish on everything Arbitrum, but I’m not particularly excited about yet another GMX fork, yield aggregators for GMX, or delta-neutral GMX vaults.
Given that Arbitrum has become a hub for DeFi innovation, I believe this project could fill a gap in the underserved asset management vertical. Their mainnet is reportedly launching in Q1 2023, and I’m excited to see how it develops (and eager to use it myself).
Short Positions
I believe next year will be a “picker’s market,” where tokens with poor emission and unlock schedules will see their value diluted throughout the year. Meanwhile, stronger, better-positioned projects can actually thrive. To round out my preferred portfolio, I’m considering shorting some weaker tokens to hedge against downside risks in my long positions.
These include:
1. STEPN / GMT (FDV: $1.5B / Circulating Market Cap: $150M);
2. IMX (FDV: $800M / Circulating Market Cap: $296M);
3. APE (FDV: $3.5B / Circulating Market Cap: $1.2B).
Clearly, there will be better ideas than mine circulating this year, but these represent the convictions I feel most strongly about—the ones I expect to grow—and how I’m thinking about constructing my 2023 portfolio. (Not financial advice.)
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Onchain Wizard
