Rapture #265: Initial Deployment Engaged
Welcome to Rapture premium. Overtime, and at a slow pace, I intend to build the Rapture community. Current members include top crypto fund managers, leading DAO specialists, and stellar crypto executives. The content and community that is being built does not cater to a mass audience just interested in crypto, but rather to a smaller subset of the industry that truly shapes how it evolves.
Crypto will play a determining role in the material restructuring of our global institutions over the coming years. These changes will present incredible opportunities that will be hidden in immense periods of volatility. The aim of this community is to be a free flow of insight that will aid members in their ability to navigate this new world.
With that being said, let's get back to the usual content.
Redeployed
Last week, I decided to redeploy some of my capital. While I am still not confident that the bear market is over and that we have seen the lows for this cycle, I also cannot ignore the fact that multiple signals I look at, from volume to developer activity to various sentiment factors. Around 11% of that capital went into ETH, which I then proceeded to immediately stake as I won't be looking for liquidity on that position anytime soon.
I am basically flat on this position so far.
Since I am not convicted the bear market is over, I decided to allocate around 6% of my capital into altcoins that I think will dramatically outperform in the bull phase of the cycle: DESO, LIT, and PENDLE. DESO is up more than 30% on my purchase and LIT is up more than 150%. PENDLE is down approximately 10%.
My target for DESO, LIT, and PENDLE is 10x+ return. I would have allocated more than 6% of my AUM, but liquidity is extremely sparse on these names.
Let me briefly explain my thoughts on why DESO in this newsletter and the PENDLE/LIT in the next one.
Decentralzied social could be next big vertical
One of the hottest narratives that industry veterans are whsipering about is decentralized social. The narrative goes something like this: people are getting deplatformed on Web 2.0, users don't get a large enough share of the pie in traditional social media companies, and there is no true ownership of data in the old world. Therefore, there is a distinct need for permissionless social protcols. Even Ryan Selkis covered the emergent theme in his 2023 crypto thesis.
While I am extremely excited for the potential launches of tokens linked to leading decentralized social protocols Lens and Farcaster, right now neither of those projects have tokens. Deso, on the other hand, does, and their token has incredibly attractive tokenomics.
DESO's current circulating supply represents 82% of its max supply, meaning that there is not much future supply that will enter circulation, which is often a negative price event. Supply that has yet to hit circulation is usually held by VCs and/or team members that are itching to monetize their liquidity event.
Furthermore, the Deso Twitter account has been going crazy tweeting out about bullish future events, from exchange listings to collaborations with ivy league institutions. In bull markets, these are the types of events that get specualtors jazzed up .
User adoption is solid for the project, as 2,000,000 accounts have been created on Deso in approximately the first 600 days.
The proejct has years of run way because they raised some of the most money out of any project last cycle, as they raised more than $200 million from leading VCs such as Sequoia, Social Capital, a16z, Polychain, and Coinbase ventures.
Importantly, they have plenty of capital to hype the project to the public.
I will be looking to monetize the decentralized social narrative during the bull, and DESO is my first play to do so.
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