Written by: Aylo
Compilation: Deep Tide TechFlow
Arbitrum is one of the few L2s gaining a lot of leverage in this bear market. Wondering how you can capture the upside from a growing ecosystem? Here is our portfolio on Arbitrum for your reference.
2022 has been a tough year for many chains, but Arbitrum is swimming against the tide at this point. More specifically, Arbitrum One, an Optimistic Rollup designed to help scale Ethereum.
Overall, Arbitrum:
• A vertical trend in the number of deployed contracts and unique wallets;
• Daily activity and daily trading volume are close to ATH, returning to the market in August;
• Arbitrum is now No. 5 in the TVL rankings.
• The Cambrian Explosion of DeFi Protocols.
Based on this, we believe that Arbitrum can become one of the best investment chains in the future. Although Arbitrum does not currently have a token, we have built a portfolio on NestedFi and hope to gain some upside from this growing ecosystem.
This portfolio will be based entirely on tokens on Arbitrum, so it is riskier. Some of these assets may go down to 0 (or close to 0), but we believe a few have 50x potential.
We will allocate 40% of USDC to DCA, fully deployed by April 2023, adding 1/4 to the assets listed below prorated every month.
ETH - 25%
The only constant anchor in the portfolio. Even if everything else underperforms or disappears, ETH will save your losses and make sure you end up with more money than you put in (in a later bull market, assuming it hits or exceeds the previous ATH price, which is 4x distance).
GMX-20%
Arbitrum's main DApp, and the most profitable on-chain cryptocurrency perpetual platform, has garnered $70 billion in transaction volume and nearly $100 million in fees to date.
It currently has the third highest daily fee behind Ethereum and Uniswap (and ahead of BSC and Bitcoin among all protocols for cryptocurrencies). Even on the 27th of last month, it briefly surpassed UNI.
DPX - 12.5%
Arbitrum's primary options trading platform. We don’t think on-chain options have really shined yet. We expect Dopex to be one of the leading protocols as pricing aligns with CEX and contracts become more liquid.
MAGIC - 12.5%
Treasure DAO is the "Nintendo" of gaming protocols. While MAGIC’s price is nowhere near its ATH, Treasure just hit an all-time high for weekly active users in its ecosystem.
It has multiple NFT platforms, its own NFT market, its own Swap mechanism and many games under development. Games are getting better and better than what we saw 12 months ago.
This is huge potential. Of all the gaming platforms and protocols out there right now, nothing is as interesting, broad in scope, or has a strong community as Treasure.
MAGIC is one of the tokens that has changed a lot since we deployed this portfolio.
SUSHI - 7.5%
Not strictly an Arbitrrum token.
Sushiswap has gone through a turbulent period in its two and a half years of life. They have been going through a rebuilding process after the main team was ousted or left in early 2022.
Investors such as Avi Felman and GoldenTree have taken an interest in the new team, now led by Jared Grey.
Unlike UNI , SUSHI tokens will accumulate fees. Although the current trading volume of Uniswap is much larger than that of Sushi, we believe that there may be a huge change in the next two years, and Sushi will slowly get on the right track.
VSTA-7.5
Arbitrum, one of the main native lending protocols, has its own stablecoin (VST) and allows interest-free lending with maximum capital efficiency. While the initial hype has died down, the market cap is small, and it's a bet we can't pass up.
UMAMI - 7.5
The protocol is designed to build a Delta neutral strategy for spending your stablecoins and earning a reasonable APR "Real Yield". The initial launch ran into some snags and ended early.
The team is gearing up to launch again, and team members have all been identified to underscore their commitment. If they can operate successfully in all market conditions, the protocol's TVL could be absolutely huge, and tokens could do well with it.
CAP - 7.5 %
A contract platform that replaces GMX . Currently very small trading volume (<$3 billion since launch), only derivatives on BTC and ETH , but over time, this may expand, we think this is a small hedge for GMX on Arbitrum.
Its market cap is small enough to carve out its own niche alongside the successful GMX , and it's doing very well.
