If you’re trading the hypercompetitive, 24/7 markets of crypto, finding your edge can be tough. Whether you get it from your knowledge of the markets, an advanced trading bot, or by copy-trading a proven account, whatever your edge is, keeping it sharp takes ongoing work.
With the number of new chains multiplying every few months, a new opportunity is emerging and a small minority of savvy traders are using it to full effect. We’re talking about trading on new, up-and-coming blockchains and the lucrative upside potential that can be found in picking winners. Luckily for you, there’s a lot more than one winner in this game.
In this article, we explore what a good opportunity might look like, and how anyone looking for an edge can track them down.
Finding the right chain
The market is alive with blockchains, each looking to cultivate a booming ecosystem of users and builders. Yet, despite the vast number of chains out there, most seek to achieve very similar things. A lot of their key differentiators are within their inner workings, and unless you’re a computer scientist, it’s often difficult to assess the distinct advantages and disadvantages any particular blockchain may have over another.
Fear not, because there’s more than one way to choose a chain.
Even if you don’t know your PoS from your PoW, you can look at these three things to find a promising new chain: the ecosystem, the capital, and the backers.
If you’re thinking about trading on a lesser-known chain, it may pay to check whether the infrastructure is in place for you to do so efficiently. If not, you may find yourself bridging capital to a new ecosystem only to discover that there isn’t even an exchange to trade on. To avoid this, ask yourself: Does this chain have a DEX? Can I get my tokens in and out of it efficiently? What are the gas fees on this chain, and how are they paid?
Another thing to look at is the capital the team behind the chain raised. In the hyper-competitive world of decentralized blockchains, marketing can mean the difference between rocketing to the top ten and fizzling out into a ghost chain. Ask yourself: Do they have enough money to sustain the ecosystem and grow their user base with marketing campaigns? Do they have the resources to support ecosystem growth through new projects?
Lastly, look at the backers. Even if the underlying tech is solid, chains need a strong network of backers behind them to bring in both users and builders. Check the chain’s website and press releases for announcements and keep an eye out for the big names in crypto.
For bonus points, you may want to verify that a chain is actually backed by the VCs and projects they say they’re backed by. If you don’t have a direct line to SBF, looking for partnership or backing announcements somewhere on a VC’s social media can be your best bet.
Making your move
So, you’ve found a promising chain. Great! But how can you leverage your find effectively, beyond simply investing in its native coin? One of the best ways to enact this edge you’ve found is by trading on and providing liquidity to one of the chain’s early DEXs.
The two things these new DEXs need are liquidity and activity, and as such, typically have some lucrative rewards mechanisms in place to attract both. You’ll be looking for things like trading competitions and early incentive rewards for liquidity providers which can be lucrative by themselves, and even more so if that chain and DEX gain traction.
It’s important to mention that the typical risks associated with cryptocurrency investing and trading can be magnified on new chains and DEXs. Never trade or invest more than you can afford to lose.
The best of both worlds
A major roadblock in getting active on a new chain is finding where to buy the right coin. These ecosystems may be so new that your preferred CEX won’t have the chain’s native token listed. If that’s the case, you can forget about finding a token for that chain’s DEX.
So what would be the best way to start trading on such a chain? Interoperable DEXs may be exactly what you’re looking for. Offering access to emerging new chains without requiring heavy resource investment just to begin trading, interoperable DEXs appear to offer the best of both worlds: access to new chains inside a familiar ecosystem.
Take DeSwap for example, a DEX built by DeSpace Protocol for multi-chain interoperability. They’re servicing a range of popular chains like Polygon and BNB Chain, but they’ll also connect you to exciting new ecosystems like Cube Network. As one of the first DEXs to pop up on Cube, DeSwap will let you swap the otherwise hard-to-access tokens currently available on the chain, including Cube’s native $CUBE token.
Using your edge
Any infrastructure that lets you tap into emerging chains efficiently and safely can be a powerful edge. Of course, when you’re holding onto obscure tokens, you’ve got to know when to hold ‘em, when to fold ‘em and when to walk away. But if you’re smart, move quickly, and trade with conviction, you’ll find yourself with an edge in the upcoming bull market cycle that you can repeat into the future.