Cryptonary

Research Report

Cryptonary’s Secret 25X

First Published 25 Feb 2021

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 Research Report
Cryptonary’s Secret 25X

TLDR

We bought SOL at $10 on 22 February 2021

SOL peaked at $250 (that’s a 25X!)
As stated in the original report below, our reason was that amidst
the “Ethereum is slow and expensive narrative,” Solana was building
a fast, affordable ecosystem

“The Hype is Real”

We’ve always said there are two main ways to make money in crypto:

While “Retail Hype Trains” may not have sustainable growth, it is often the case
that they do rise rapidly.

Disclaimer: Not financial nor investment advice. Any capital-related decisions you make is your full responsibility.

“Ethereum Killers”
Every now and then the “Ethereum Killer” narrative shows up in the market,
while it’s very rarely true or real, profits can be generated by it.

At the start of February 2021, BNB began rising parabolically as can be seen on
the chart below.

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Cryptonary’s Secret 25X

The reason behind the price increase? Hype.

The reason behind the hype? “Cheap DeFi”

Decentralised Finance has been the talk of the town and honestly the most
innovative sector to date within crypto. The issue is that 99% of DeFi protocols
live and function on the Ethereum blockchain. When overloaded, the latter
becomes excessively expensive due to gas fees. $50-$100 per transaction
leaves out a lot of people.

Binance, offered DeFi on “Binance Smart Chain” or BSC for short, where
transactions are cheap and fast. This pushed many people to go and try out the
BSC DeFi ecosystem, which helped boost the price of BNB due to positive
sentiment and people buying it to get on BSC.

Where is the next hype?

This “Ethereum is slow and expensive” narrative is still out there and Solana is
the next beneficiary.

With Serum and Raydium, Solana is building a DeFi ecosystem where

transactions are even cheaper and faster than BSC. For that reason, on the day
of the dip (22 Feb 2021) we decided to invest into SOL and buy the dip at $10.
Fast forward to a couple days later and SOL is trading at $16+ already.

Update: SOL is trading above $65 now (+550%).

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Cryptonary’s Secret 25X

Ethereum?
The number of projects that came out trying to replace Ethereum is extremely
high, all of which failed “till now”. Where are the users and the incredible
transactional volume? Ethereum. Over 1,250,000 million transactions take place
every day and over $1,000,000,000 (BILLION) was generated in mining revenue
in February 2021 ALONE.

Fundamentally, ETH is more valuable than any other Layer-1 native token.
Narratives and hype however, they do drive some volume and crowds to
purchase the “killers”, these hype trains eventually die down.

While we are invested in DOT, even Polkadot has to prove itself because up
until this point can we say we’ve used Polkadot for anything? No, we cannot.
But one of those days a network will come and take a market share from DeFi
and we believe Polkadot may be it – speculation.

In the long run, BSC will not replace Ethereum, that chain is centralised. 21
nodes process transactions on BSC, all of which are elected by BNB holders –
who’s the single largest BB holder that can skew results? Binance.

Vitalik once said:

“When a chain claims to have a 1,000,000 TPS throughout, what

they’re not telling you is that it’s a centralised piece of sh*t”

Even though he was talking about EOS back then, this resonates with us to this
day. Solana “may” be a candidate, Alameda research is smarter than the
Binance Team and their activities in DeFi are extensive so they would not back
a “fake” horse but it still needs to prove itself by taking a reasonable
percentage of DeFi volume and TVL onto it. Solana is a retail play for now.

We are not saying Solana is not a good project or chain by any means. It’s user-
experience is amazing, we’ve tried it multiple times. However, for it to become
highly valuable it needs to attract DeFi TVL, capital locked in DeFi protocols.
Raydium may cause that to happen with Pools, but we cannot presume so
before it does happen.

Until proven otherwise, ETHEREUM will remain the DeFi Mothership.

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