I visualize The Rabbit Hole as a whimsical cavernous Fey realm full of bountiful harvests, perplexing creatures, and breathtaking views. It’s an exciting place, full of new concepts you don’t even have words for yet, inviting mysteries for curious minds, and the potential to change you and the world forever. It is well worth exploring.
However, The Rabbit Hole is not a place for the faint of heart, the careless, or the unprepared. It is an unfamiliar wilderness and, like any other, it is unique dangers. The seasonal weather here moves to an unfamiliar rhythm. You don’t know what forage here is edible. You don’t know the customs or intentions of any creatures you will meet. Whenever dealing with the unknown, first slow down and learn what you can before taking any risks.
Those who have been here awhile, those who have “made it”, will tell you that first and foremost you need to survive. I’ve seen too many people find initial success here, build up confidence, become reckless, and eventually fall. There are many opportunities here. You don’t have to be a part of all of them. This guide will serve as something of a scout guide to this wilderness should you still wish to explore it.
Base Camp One
Just beyond the looking glass is a bazaar, full of treasures and opportunities that can be found deeper within. I call this place Base Camp One. The layout of this bazaar is always changing. Upon first glance it can all seem overwhelming. You step through the looking glass and find a weird caterpillar sitting on a mushroom puffing smoke rings from his hookah and trying to sell you nouns. Just past him you find a walrus and a carpenter confidently leading a parade of clams to their doom. You trip over yourself to avoid stepping on a white rabbit with a broken clock frantically screaming about the end of the world and the metacrisis. There is a hustle and bustle to this place that takes time to get used to, but you will.
As you revisit this place again and again you’ll start to recognize tribes and evolving themes of discussion but at first it’s basically a foreign language. One week you’ll find a group of horticulturalists talking about farming yams. By the time you get your head around that the conversation will already have moved on and everyone is listening to some unicorns talking about liquidity compression and impermanent loss. A year later, a group of bored apes are talking about building a media empire. Most recently there was a group of philosophers talking about “intersubjectively attributable faults“. You’ll find seasonal tribes of frogs, cute dogs, and penguins aggressively playing a board game you don’t recognize or understand the rules to. You’ll walk past booth after booth of people promising life-changing riches if only you buy from them but the things they’re peddling sound so abstract you have no idea how to even use them let alone value them. If you are lurking around /r/cryptocurrency or crypto Twitter and it’s making your head spin, congratulations you made it to Base Camp One. It is a disorienting experience.
More technically, Base Camp One is the state of knowledge where you first have something to lose and are trying to learn about this space. When you reach the end of what we commonly call “onboarding” for web3 you commonly have:
- A wallet of some kind loaded with some native currency of your chain.
- You’ve signed something with that wallet and gotten some type of collectable or coin as part of whatever tutorial you took.
- If you’re lucky your onboarding guide walked you through setting up a hardware wallet. If you’re not lucky… I hope that hard drive stays healthy. If you backed the private key up on the cloud, god help you; literally start over.
To put this in the perspective of a predator:
- You have money to lose; at the very least your L1 gas.
- You know basically nothing.
- The only lifeline you have available just left you by yourself.
- The scammers can reach you for the first time.
Base Camp One is a nexus of a wild choose your own adventure of everything from casinos, to art studios, to private clubs, to literally world-saving enterprises. There are no road signs labeling all the tunnels that branch from here and most of the proper safety warnings only come from other travelers. By the time you actually understand this strange space the outside world will look bizarre and corrupt and will make your friends doubt your sanity. Just be forewarned it can be perilous. You’re either going to come out of Base Camp One wealthier or without pants. Frankly, it’s a die roll. However, you stand a better chance if you follow this advice: slow down and learn before acting.
That can be hard at times. The culture here is not one that generally encourages prudence. There are many psychological perils that will urge you to break this advice. Everyone you meet seems to be in a hurry all the time and that energy will tug at you. The wealth and authority of some travelers will seduce you to follow them wherever they go. Worst of all, most everyone you meet wants something from you, it’s not always obvious what, and the mere act of being polite or asking for help can get you into trouble. You need to build vigilance as a habit. Overconfidence is a slow and insidious killer. As with any habit this requires repetition. Build a mental habit: any time you feel someone rushing you to act, slow down.
Whatever the current hype cycle is that you read about yesterday, it is not the last opportunity for extraordinary gains in this space. You did not magically luck out and descend into the Rabbit Hole just as a once-in-a-lifetime opportunity is transpiring and you need to act now or miss it forever. Those opportunities do exist here; but they happen multiple times a year, every year. Surviving means being informed enough to discern which ones are legitimate and managing risk responsibly. You need to survive here before you can thrive. There will be another opportunity. Slow down.
Crypto Wilderness Guide
Here are some lessons, inked in blood, that you should learn. I hope you take them to heart. People who have been around this space long enough will have heard all of this dozens of times. Some of this is ancient history. All of it is still relevant. It’s probably worth re-reading this periodically because some of these phrases will take on layered meanings as you acclimate.
Crypto Etiquette
Your Crypto is Private
If you go to stock trading forums you’ll frequently find people posting pictures of their brokerage account positions showing they either made or lost incredible amounts of money. Reputable crypto forums prohibit that for your safety. The blockchain is public unencrypted information. When you post precise positions and trade times you reveal your address to anyone looking. If I know your address I know not only your current net worth but everything you do in the future. You probably aren’t intending to forfeit your financial privacy forever just to brag online; it makes you a target. It enables more credible spear-phishing and tells the attacker whether you have enough funds to be worth their time. Generally speaking, just keep your crypto dealings private or at least relatively anonymous, especially online.
This is true among friends and family for different reasons. There will come a point in your learning where you discover something exciting in this rabbit hole, the whole thing clicks for you, and you become enthusiastic and want to share this with everyone around you. People around you then think you’ve joined a cult. It’s more than a stereotype; I’ve seen it many times. Even outside of crypto it’s usually recommended to avoid mixing business and pleasure. If someone listens to you and makes money they are rarely going to be grateful to you personally. If they listen and lose money you can easily damage relationships. So don’t go shilling your favorite memecoin at your next holiday party with friends and family. As an investment of your energy it just doesn’t provide a very good risk adjusted return.
In general, while I encourage everyone to talk about what blockchains can do and the benefits they bring, don’t talk your bags. It’s one thing to have an conversation about money being a social construct or the outrageous quicks of the banking system. It’s quite another to go around making grandiose claims you don’t have the means to back up in the moment while telling everyone to buy whatever coin/token you’re currently obsessed with. Don’t be that annoying guy. If you absolutely can’t resist or are obligated to answer because someone directly asks you I recommend you approach the topic like this guy. Your first objective is to dispel misconceptions and ask confounding questions that lead to thought experiments that the person might actually benefit from. Be Socratic. In my experience, the moment a listener perceives even an inkling of self-interest in the topic you will just be another scammer to them. Don’t talk your bags; your crypto is private.
Real Help Will Be Public
Given how overwhelmed you might feel at times when exploring something new it’s natural that you want to reach out and ask for help. If you do this in web3 on Discord, Twitter, or Reddit in most places the people who will respond to you, especially in DMs, are scammers. Your transaction failed trying to claim funds on whatever.finance? The scammers just see this guy. They can just smell the fresh blood. It’s literally their job hunt people like you. Legit people never DM you first. They’d rather answer your question in public so the response is indexed for the next people who search.
If a DM is necessary they will tell you to DM them. Scammers can easily impersonate legit people on social media. If you’re on Discord, they can DM you despite not even being on the server you’re asking for help from and therefore they are out of reach of the moderators of that protocol. They can use the same image and public alias as the legit person you are talking to. If you’re on Twitter they can use a subtly different name but have the same profile picture and pay $10 to have a blue checkmark next to their name. You’ll sometimes get two or three different accounts messaging you telling you similar things to make the answer look more credible. The differences are easy to miss, you are frustrated even before they reach you and are willing to try something new to fix the problem, and they’ll be readily available and eager to “help” you.
Nothing good will come from their help. They’ll try to send you to their help server to file a ticket. They’ll try to get you to install some custom wallet into your browser. They’ll send you to a website that asks for your private key. They’ll tell you there’s some manual workaround they will do for you if you just send your ERC-20 to their treasury address. These are all obvious red flags but before you even get there the first red flag is you are using DMs at all. Whenever someone reaches out to you first with any type of directions, it’s a red flag. Real help will be public.
Be Careful Who You Trust
Learning in this ecosystem can be frustrating at times. Everywhere you go everyone seems to know more than you about everything from macro economics, to how to read a chart and tell the future, an entire sailors dictionary of jargon from tradfi, to technical specifications of networks that you need a computer science degree to understand. It can all feel frustratingly out of reach but I’ll let you in on a secret: most people worth listening to are capable of explaining things in simple enough terms that you can understand it. If you are on their platform and they have all the space and time they need to explain something well yet they aren’t making the effort to explain it so you can understand it it could be their goal isn’t to be understood by you but rather to sound credible and confident so that you buy whatever they are selling. If you stumble into a conversation between two names that have a lot of followers and they are talking way above your head, you are not yet at a place where it’s worth reading whatever that is. If you’re outmatched to the degree that you aren’t prepared to sus out bullshit you shouldn’t be considering buying whatever anyone there is selling.
Generally speaking, your favorite crypto influencer is using you as exit liquidity. If you aren’t paying for a product, you are the product. If you can’t figure out how they are monetizing your attention, you can still be certain they are. They are monetizing your attention in every way they can. They are getting paid for ad space. They are executing trades before you can so you’re always buying at a higher price and selling at a lower price than them if you follow their moves. They need engagement numbers to raise more money from VCs and they need to sustain their token price to keep attention on their project. For all of the above, they need to retain your attention and they will use every cognitive bias they can to do so. People often mistake confidence for aptitude. The loudest voices are those with the strongest incentives not those with the truth. But I will tell you this lesson from cycles past: the most boisterous sounding voices in the crowd have a storied history of imploding a year after you’ll first discover them. Be careful who you trust.
Wallet Security
Not Your Keys, Not your Coins
The blockchain is immutable and there’s never been a recorded case of someone cracking a private key. A corollary of that is if you don’t have the private key no one can help you regardless of how many guns your government has or whatever a judge says. People have found themselves on the wrong side of this when they leave funds in the possession of companies only to find that the company loses those funds or stops its services. The most famous example is probably Mt Gox which is both the name of an exchange and an event. Having not learned this the first time, many people in 2022 suddenly found their funds locked again when Blockfi and Gemini suddenly stopped withdrawals. When that happened, what could else could strangers from the internet say to you? You gave someone else your money and then complained it was gone. There was no getting your funds back. So all you got was an echo of this timeless advice: Not your keys, not your coins.
Use a Hardware Wallet
Every once in awhile a virus ripples across the internet and will manage to patch wallet software or scan computers for wallet files and transmit them over the internet. A hardware wallet is just a separate device that holds your private key and signs messages so that even if your wallet software is compromised your funds aren’t affected until take a physical action to confirm a transaction. They aren’t going to protect you from social engineering attacks but they are absolutely worth using. Even without a technical reason, friction between you and your private key can be useful so you have time to process what is going on before giving a private key to someone trying to phish you. When we see someone online tell us that their wallet magically emptied it’s usually either that they stored their private key on something like Google Drive and then their Google account was compromised or they were using a hot wallet. In either case, people just shake their head and say you should have used a hardware wallet.
Send a Test Transaction First
One of the most harrowing and unforgivable initial experiences everyone has with a blockchain is a deposit to an exchange. You fill out some form with a basically inscrutable long hash, your money shows as gone from the exchange or your wallet, and then… silence. This period where the block has been confirmed but you’re waiting on a receiving exchange to acknowledge they received it is gut-wrenching and frankly I have no idea how we all accepted this as the norm. It’s embarrassing that exchanges don’t directly interact with wallet software to form the transaction and verify it on their end before submitting it to the chain. Nevertheless, that’s where we’re at.
There are attackers who generate wallets with similar addresses to ones you own. They’ll even “dust attack” you with some tiny amount of funds your address so their address will appear in a short list when you fill out the send form. You can simply miskey something and replace a character somewhere. An OS virus can replace the target address in your clipboard. A malicious wallet software can replace the target address in the transaction before forwarding it to your hardware wallet. There’s just a lot of things that can go wrong with this model. A test transaction limits the amount of money you can lose. Most of these attack vectors will steal the test transaction funds and reveal the vulnerability when they do so. Yes this costs some extra gas and tax accounting headache but if you want peace of mind whenever you’re doing a send or interacting with a contract for the first time send a test transaction first.
Never Sign Something You Don’t Understand
There’s an unfortunate pattern developing lately where websites ask you to “sign in” with your wallet before they’ll function. This isn’t the same as “unlocking” your wallet or connecting it to a website. Signing a message requires your private key and therefore should be something you pay careful attention to. Doing this just to sign into a website discourages vigilance which is why I think it’s an unfortunate pattern.
It used to be widely understood that signing a message was harmless and that only signing transactions could harm you but increasingly this isn’t true. There’s something called permit2 that certain tokens support which enables token approvals from signed messages. There are more “gasless” services like CowSwap every year that use signed messages to direct their service to sign transactions which pull your funds and do something with it. There is something called account abstraction which just means someone else pays for your gas. Pretty much any account abstraction approach is going to use signed messages unless an EIP changes this in the future. So don’t think of messages as harmless; that’s antiquated advice.
Any wallet worth using these days will show you some a simulation of what the transaction you are about to sign will do given the current chain state. Obviously if it shows you all your money leaving your address that’s suspicious. But a signed message can’t be simulated by your wallet and so it can appear innocuous even if it is later used to form a transaction that rugs you.
A message that says “I’m signing into website blah blah blah, here’s a unique hash” is almost certainly safe. A message that has an array of values that you don’t understand is not. Whenever you see a transaction calling a function you don’t understand or a message you can’t immediately make sense of, reject it by default and then investigate after. If it pops up again automatically it’s almost certainly a scam. Never sign something you don’t understand.
Don’t Interact With Tokens You Don’t Know
Sometimes you’ll see tokens appear in your wallet that you don’t recognize. This can be for spam reasons. For example the token description will be like “Come to my scam website https://scam-url.com.” The scammer wants your first instinct to either be “hey! free money!” or “how do I just get rid of this thing?”
Rather than worrying about how to sell the token itself or get it off your address, instead switch to a wallet software that doesn’t even display those tokens. At the very least most portfolio viewers rank by value and these tokens will show as 0 value. However, nothing is stopping the creator from making a Dex pool only they can trade into to give the token an apparent value to the price oracle. The only scalable solution is to use a wallet solution or portfolio viewer that has a curated whitelist of tokens and allows you to add tokens you want to this default list. On that front I’d recommend Zerion or Rabby if you’re playing on the Ethereum ecosystem.
No good will come from any attempt to interact with the token itself. Mostly you will just waste gas trying to send it away and the transaction will just fail. However, if you so much as read the description the scammer already got your attention. That’s more than they deserved. The worst case is you actually go to the scam website and sign something completely unrelated to that token and lose a lot more than gas. Either way, no good will come from your interacting with it. Don’t interact with tokens you don’t know.
Use a Cold Storage Wallet
This one is less common than the rest but I have seen this advice a few times over the years. Formally, hot wallets are any wallet where there is a network connection between the private key and the internet. Practically, there’s some wiggle room here. Personally, I consider a wallet a hot wallet if the private key is on the same device as whatever UI is forming the transaction to be signed. This makes something like a Grid+ Lattice cold even though it has a wireless connection.
So what is a cold storage wallet? It’s a cold wallet without any approvals. The only thing the cold storage wallet should do is send and receive assets from an active wallet. It doesn’t need to sign messages. It doesn’t need to interact with the web browser in any way. It can do this entirely from within your wallet software and can and should be a multi-sig on a completely separate device that you don’t browse the web with.
The advantage of this is similar to test transactions. When interacting with any wallet you only stand to lose the assets on that address. By partitioning your assets you have less at stake whenever you’re interacting with your active wallet. This strategy became particularly relevant when NFT collection contracts came onto the scene. Scammers would phish a token approval for your entire collection and sweep all your NFTs at once even though you were only trying to sell one of them. Similarly scam websites would get you to sign a token approval for USDC or wETH instead of the ERC-20 you expected and then sweep them from you. Using this strategy makes you deliberately put assets at risk before interacting with them. It is a PITA but if you actually have generational wealth in crypto sooner or later you should be serious about this and use a cold storage wallet.
They Are Out to Get Your Crypto
The above advice are just practices that mitigate specific ways people are going to try to rob you. If you leave your crypto on an exchange and the exchange gets hacked, your money is gone. The fact that someone you trusted lost it instead of you makes no difference in the end; your money is gone. If you leave your private key on a computer that computer is now a gateway to all those assets. I’ve had to format several computers due to viruses over the years and I’m reasonably savvy. It’s better to just make the private key entirely isolated from your wallet software. If your wallet software is compromised and you send a large amount without a test transaction, you might have just sent it to the hacker. If you’re in a hurry and you sign some message without reading it you might have just signed a message that trades your token through CowSwap and gives the output to the attacker. Every token approval is a risk. There are no takebacks. The government can’t help you. This is not paranoia. They are out to get your crypto.
Managing Risk
Don’t Invest More Than You Can Afford to Lose
Crypto is full of amazing heights and soul-crushing lows. The fact that there have been multiple 90% drops and it is still the best performing asset class in the last decade is incredible. However, you can’t always afford to ride it out. The crypto highs and lows tend to follow the macro highs and lows. So when crypto is low you’re also jobless, economic opportunities are scarce, and you’re scared. If you invest more than you can afford to lose when times are good, you could very well be one of the millions who find themselves selling while the market is down only to watch it do some crazy 30x the next cycle. People not following this advice is the source of the bitterness every time crypto comes up on your Facebook feed or technology subreddit and people say it’s a solution looking for a problem or all of crypto is a scam. The problem was never crypto, the problem was they invested more than they could afford to lose.
Pay Taxes As You Go
This is actually just a specific case of the above point but I think it bears special mention. It’s one thing to be penniless. It’s another to be in debt. It’s another still to be in debt to the government. The first case is miserable but you can still live on credit. The second case is bankruptcy and homelessness. The third case is debtor’s prison. You cannot afford to invest money you owe for taxes into speculative assets. Therefore, whenever you rotate positions you should take whatever sum you need to to cover the taxes out to safer havens.
The specific case that wrecks people has to do with a crash just after the start of a new year like happened in… well 2018 and 2022. Just before the crash everyone rotates their capital back into the blue chip coins. When this happens even though they are reducing risk they are now selling something and buying something else at near all-time-high valuations. Then the crash hits, they tell themselves it’s just a bear trap and don’t sell, and by the time the tax bill is due they can’t even liquidate their entire portfolio to pay the tax bill. Seriously, it’s just less stressful to pay taxes as you go.
No One Is Giving Away Free Crypto
Whenever anything of significance happens in crypto some scammer always replies to the announcement to say “To celebrate X event we’re giving away free crypto. Send scamAddress some coins and get twice that back!”. This is a ridiculously stupid scam that has gotten a ridiculously stupid amount of money. I seriously can’t fathom how this bullshit has managed to pull in hundreds of millions of dollars worth of crypto. Sometimes I feel like people who lose money to this type of thing deserve to do so. Mostly though I just feel sad for how this money is going to power the next wave of scams to be that much more prevalent and effective. They do this because it works and they are never going to stop.
Let me make this abundantly clear. I have been around awhile. I have been around for many significant events in crypto. No one reputable is ever giving away free ETH. For any reason. Ever. I don’t care if their account name is Elon Musk and you think he’s so eccentric he might actually be doing it. I don’t care if they have a blue checkmark next to their name and it appears to be the same account as the one making the announcement. I don’t care if it says its part of a fun new airdrop they are doing. Ever.
More generally, even in an ecosystem where 1000% gains aren’t uncommon, if it looks too good to be true, that’s because it is. If you see some 1000% yield LP position on some token you’ve never heard of it’s almost certainly being fueled by inflation and you are gambling against the loss of value of your collateral. If you see some stablecoin position with unusually high yield that stablecoin probably isn’t stable. If it actually is using a safe collateral and is on a safe platform and isn’t a scam it’s either a very new position and is about to be quickly diluted or it’s being fueled by someone’s marketing budget and is about to be quickly diluted.
Whether in web2 or web3, if you don’t understand how you’re adding value to an ecosystem you’re the product. When you receive airdrops, you are being compensated for being an early user, taking early risks, boosting the numbers the team uses for valuations so they can get more funding, etc. Even legit airdrops that you can sell the day you get them are not free crypto. No one is giving away free crypto.
Inflation Is Not Profit
Every bull market in crypto has been marked by certain design patterns in tokenomics. I can mostly tell you a time range when a token was launched by its tokenomics alone like how an archeologist can tell you which civilization some ruins come from by pointing at architecture and art styles. One of those design trends in early 2021 was to launch highly inflationary tokens and then use high APR numbers to encourage people to buy the token and stake it for rewards. This was basically just a new type of casino. Your net worth would go down even as the number of tokens you hold went up 10x a year. This was basically preying on the ignorance of users who didn’t really understand finance but it worked for a time while the profit the hype generated was able to expand the user base faster than the inflation rate. Once the model ran out of users to expand to the rest was history.[1][2][3][4] Whenever you see a high APR in some LP or staking pool you need to slow down and investigate where the money is coming from. If it’s coming from inflation you need to understand that inflation is not profit.
If It’s Good Enough For a Screenshot, Take Profit
As volatile as crypto is there will come a time where you are massively up. You’ll be up so much you will be in disbelief. You will refresh your portfolio checker every 15 minutes and the person sitting across the table from you will know you’re doing it again because the green from the screen will reflect from your eyes. At this point, they will think you have a problem. At this point you actually do have a problem but that’s besides the point. Here’s the thing: you aren’t a genius. Even if you actually are a genius you aren’t up because you are a genius. It’s just that time of the cycle.
At that time of the cycle everything you’ll see in your media feed will reinforce how much of a genius you are. It’s like the whole world just woke up and finally saw what you saw first. However, if you haven’t heard this yet let me be the first to tell you: sentiment follow price. People love the investment now because it is up. If the price wasn’t up, you’d still be waiting like you were when you first bought. 90% of those investments everyone seems to agree can’t possibly fail are destined for the dustbin of history. Ever heard of Feathercoin? If you were around at the time you couldn’t not hear about it. How about EOS? OmiseGo? Luna? None of these things are going to be top 100 again. When prices are up, everyone is a genius. At the end of the cycle when you’re holding the bag you won’t feel like it any more.
How will you know when the top is? If there was a numeric answer to that then we’d all just sell then and the top would come sooner. The game theory of that makes the price chart look highly chaotic at the tops. The best answer I can give you having lived through some unbelievable peaks and valleys is if it’s good enough for a screenshot, take profit.
Leverage Will Fuck You Up
Leverage in crypto takes many forms. We have all kinds of financial gizmos you’ve probably never heard of and which you’ll take years to acclimate to. Like, yes, we have options protocols but we also have rate stripping futures protocols, perpetual swaps, and leveraged derivatives. The leverage around here goes to 100x and it all seems to get more complicated and interwoven every year.
Regardless of the form of leverage though, the goal is to amplify the effect of a market change on your portfolio. This is all well and good when you’re dealing with something like bond rates that adjust like 0.25% a month and you can just afford to wait to expiry if you’re wrong. Waiting it out is basically what banks are doing right now and why their unrealized loss chart looks like blood dripping down a painting. Crypto assets are more volatile. You’re not just playing with gasoline here; this stuff might as well be nuclear. I wouldn’t advise you to play with the nuclear bomb without knowing what you’re doing. I don’t care if it has a red button that says “Press Me for Limitless Energy”. I wouldn’t advise you to play with crypto leverage either even if their website has a fun points system.
Applying leverage to crypto assets, means amplifying the financial effect of something that is already known to drop by over 90% and with rate swings in the thousands of percentage points over a year. If you aren’t right, continuously right without any blips, you won’t be waiting this out. You’ll be liquidated. I have seen too many veterans fall to the hubris of thinking the price can’t possible fall to X level. Then, for one brief candle of intense market fear it does and they’ve lost more than they’ve bargained for. Before you play with leverage you should have a forecast for what the market will do that justifies taking such a risk. You should have contingency plans to execute on if your prediction isn’t coming true in the timeframe you expect. Don’t let it linger on until you feel like it’s a sunk cost. Definitely don’t double down. Every time you sign a transaction involving leverage repeat this in your head: leverage will fuck you up.
Get Rich Slow
This last one summarizes the spirit of all the above advice. Thriving in this ecosystem is first and foremost about survival. Surviving is often a matter of having a clear head and assessing risks rationally when everyone else isn’t. That requires having your emotions under control. Whenever you take any extreme action you are going to experience extreme emotions about it. Those emotions will cause you to act rashly. This is how you end up scammed, overexposed and holding shitcoins you don’t honestly believe in, having missed the top of the cycle without taking profit because everything seemed so bullish, being liquidated at the bottom, in debt to the government, and joining the ranks of the disillusioned about what is otherwise a wonderful civilization changing technology. Life is a marathon. You are only racing yourself. Take the time to learn before taking big risks. Don’t try to get rich quick here. Get rich slow.
Recommended First Steps
Up until now I’ve covered a frighteningly lengthy sequence of things not to do and ways you can lose everything. To conclude let’s focus on what should you do to get started. What’s in your metaphorical backpack so you can be prepared like a good little boy scout? Where should you go exploring first?
Curate Your Feed
We all exist in information bubbles. What you add to yours is going to greatly determine the direction you explore, the crowd you fall into, and how your time here affects you. Fill it with quality information. Generally speaking my feed consists of three things:
- Project introductions. This is mostly YouTube for me. My list changes over time but has included Bankless, Bell Curve, and some much smaller accounts like Jordan McKinney. This type of content is often very biased so don’t expect too much from it besides background context on the project, what they are doing and how it’s novel, and the bull case. They usually aren’t going to compare themselves to their peers here or tell you how the project might fail. This will give you a list of things to research more deeply.
- Official announcements. I check my Discord/Telegram announcement feed every morning, build up a list of tabs, and clear it by the end of the day. Sometimes I’ll hear about new projects from partnership announcements.
- Discussion. This is where people get into the most trouble. Don’t let a social media tech giant direct your learning. The price of a project being shilled (especially on short time horizons) is a terrible metric for the quality of a source. You might think to follow technology leaders but without enough background you’re as likely to start following Charles Hoskinson or Richard Heart as Eric Voorhees or Vitalik Buterin. They all sound convincing to the uninitiated. What I recommend is rather than look for technical or wealthy people to instead look for project experts other than the team members that post about an application or ecosystem you already understand. You need to be able make sense of what is being said and make an informed decision about whether they are saying it in an intellectually honest way. Personally, I’ll also actively talk with community managers and members of projects but I’m looking for much deeper information or collaboration opportunities. You’re never going to find a Microsoft dev to ask question to but you very well might find and ask questions directly to a project founder in web3.
The more you fill your feed with toxic maxis and arguments the more toxic and argumentative you’ll be. This is just as true for news as anything crypto. The more you fill your feed with people who are only interested in price the less happy you’ll be. The more impatient you are to get rich quick, the more money will slip through your fingers and the more you’re going to be spending on therapy and blood pressure meds. Instead fill your feed with information worth knowing and spreading. Fill it with communities that are points of light in your life.
Hands On Learning
Undoubtedly the best way to explore the Rabbit Hole is to go there yourself. As I hopefully gotten across by now, focus on survival. Learn with small amounts to limit the liability of beginners mistakes. Start with stablecoins where you can to avoid price volatility risks. Start with older projects and projects with higher TVL because they tend to be safer. Start with simpler applications. In an attempt to be helpful getting you started here is a bunch of things to search out yourself sorted into categories by relevance to you and then roughly within each category by approachability and importance. There’s a lot of editorial discretion here and you can be sure this is incomplete and will be out of date.
Defi
- Money markets such as Aave and Compound
- Dexs such as Uniswap and Curve
- Liquidity incentives/farming such as Convex and Aura
- Leverage such as Gearbox, Defisaver, and GMX
- Options such as Lyra and Hegic
- Real world asset protocols such as Centrifuge and Maker
- Regen finance such as Gitcoin Grants, Greenpill, and Klima
Digital Identity
- Ethereum Name Service (ENS), basically a human readable address
- Ethereum Attestation Service (EAS). Let anyone prove that you or someone else claimed something.
- Sybil resistance systems such as WorldCoin, BrightID, and Proof of Humanity
- Achievements such as Rabbit Hole and Layer3
NFTs
- Communities such as Bored Apes and EVMavericks
- RWAs such as Open Ticketing
- Corporate NFTs such as Nike and Starbucks
Gaming
- Auto battlers such as Axie Infinity and Illuvium Arena
- Strategy games such as InfluenceETH and Illuvium Zero
Memecoins
- Doge, Bonk, Wif, etc. I’ll mark this cavern with a skull and crossbones.
Depin
- Restaking such as EigenLayer, Symbiotic, and Karak.
- Oracles such as Chainlink, UMA, and EOracle
- Keepers such as Keeper Network and Gelato
- Data availability such as EigenDA and Celestia
- Compute sharing systems such as Golem and Spheron
- AI in various forms such as Morpheus, Ritual, and BitTensor s19
Enterprise
- Logistics systems such as Nightfall
- Proof of Authority chains
Foundational Tech
- Rollup technology such as Blobs, Validiums, and Fraud Proofs
- Scaling Technology such as Verkle Trees and Proposer Builder Separation
- Privacy Technology such as TEE, FHE, MPC
Review Prior Scams
After every hack you’ll find a post-mortem. You should bookmark these when you find them and swing by every once in awhile as you level up until one day it clicks. Occasionally you’ll even find useful summaries like this one that infodump many of these in one place. Eventually you’ll know what jargon like reentrancy attacks are. You learn a lot about how things work by how things break.
Conclusion
Over time if you follow the advice here you’ll know more than 99% of Crypto Twitter on a good variety of topics, you’ll be able to take measured and deliberate risks, and you’ll fall into communities that share your values. You’ll probably meet some of these people in person at conferences. You may end up getting a job here. You may end up not needing a job at all. You’ll definitely find sources of joy and points of light in an otherwise dark world. Whatever happens, you will be changed in ways you aren’t expecting. I hope you’ll come away a better, happier, and wealthier person.
I’ll leave this on the same note I left my Rabbit Hole post. This is the future. It’s where exciting innovation is happening in games, art, culture, coordination, and finance. It’s where your freedom is being enshrined by math in a world otherwise determined to strip it from you. Welcome to the frontier.