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From traditional investment to DeFi Nuggets in the encrypted market, the right way for investors

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From traditional securities to cryptocurrency investment, how can we give all investors a best choice.

Original source: BlackHoleDAO

Berkshire, the giant whale, is beyond the reach of retail investors

< h4>The Birth of Berkshire

In 1956, at the age of twenty-six, Warren Buffett formed an investment partnership to acquire small and medium-sized businesses and take stakes in large corporations. In 1965, the partnership gained control of Berkshire Hathaway Inc. , a publicly traded textile manufacturer at the time. Buffett's partnership quickly dissolved and the Berkshire stake was distributed to the partners. Berkshire has since acquired businesses of all kinds, dabbling in insurance, manufacturing, finance and media. As of 2015, its investment returns have significantly outperformed market benchmarks such as the Dow Jones Industrial Average or the S&P 500. From 1965 to 2015, the Dow rose 18 times, while Berkshire grew 12,000 times, a compound annual growth rate of 21%, twice that of the S&P.

Partner Awareness. These spiritual heritages are reflected in the first of the fifteen principles stated in Berkshire's "Shareholder Handbook": "Although our form is a limited company, our attitude is a partnership." The giant whale centered on Munger swept the capital market.Although a large number of investors tried to imitate Buffett's investment philosophy, few people imitated Berkshire's corporate practice. Berkshire has become stronger again and again surrounded by many institutional investors.

The beautiful curve of value investing

Berkshire’s investment practice is full of initiative, using its sensitive business sense to take the initiative, and always maintains the professionalism of discovering value targets, which makes the investment process easier We can always meet good companies one step ahead, and there are many companies among which we are familiar with Coca-Cola, Apple, Bank of America and so on. And through the "value" investment, it finally got a pretty good return.

Just holding Coca-Cola is enough to shock ordinary investment institutions. In 1988, Buffett bought Coca-Cola stock for US$593 million. In 1989, he increased his holdings to US$1.024 billion. In 1994, he continued to increase his holdings, with a total investment of US$1.299 billion. Since then, his holdings have remained unchanged for so many years. This generosity is astonishing. Of course, every investment of Berkshire is in line with the long-term growth trend.

Anxiety of retail investors

Berkshire's record or Buffett's charm makes people want to exchange all chips in their hands for more chips, and people want to earn More. But from a personal standpoint, we have to admit frankly that such a threshold will definitely keep us out. Even if Berkshire has a high return on investment, it will all enter the pockets of institutional investors. It's really irrelevant! So how can individual investors choose a good investment method?

New wine and old bottle of Huidu Fund

One foot on Wall Street and one foot on cryptocurrency

Before we start to introduce Grayscale, we first need to know about Digital Currency Group (hereinafter referred to as DCG), the founder of which claims to be the Berkshire Hathaway of the encryption world The encrypted whale. Its scale has already exceeded tens of billions of dollars, and there are many traditional capital giants behind it, including MasterCard, Bain Capital, Canadian Imperial Bank of Commerce and New York Life Insurance. DCG has made outstanding achievements in the encryption industry successively. It has invested in Coinbase, the world's largest trading platform, and Decentraland, the concept leader of Metaverse, etc., and its Grayscale investment (Grayscale), CoinDesk and Genesis are particularly famous. Let's not talk about it today. both.

Only entering but not unilaterally rising

From the perspective of operation mode, we can understand Grayscale’s trust fund as an ETF, but it was investigated by the SEC in 2014, so from After that, Grayscale deliberately stopped the "redemption" function on the grounds that the SEC would not pass the review, and did not fight for it again, which led to this ETF becoming a multi-cryptocurrency led by Bitcoin. There is a multi-currency encrypted fund pool, and the digital currency that investors rush into has no way to get back. They can only cash it in the OTC market with the trust given by Grayscale, so the currency holdings of Grayscale Fund will only increase unilaterally. This is why the price of Grayscale Trust has always been at a premium.

Retail investors still have no access

Grayscale Trust currently holds a total of 13 currencies, which are BTC, ETH, LINK, FIL, MANA and other leading projects in subdivided tracks, although investors do not have to worry about zero risk, they still lack diversity in terms of optional power. Although Grayscale is a cryptocurrency trust, its overly centralized management It's the same as Buffett's Berkshire. At the same time, the door of Grayscale Fund is not open to individual investors. Like Berkshire, it is a hotbed of institutional investors, which still discourages some individual investors. This way of putting new wine in old bottles has not been improved a bit, so Grayscale Fund does not seem to have given a better answer about the way of personal investment!

Entered with DEIFI, TokeMak is not ideal

Create a new entry method

Looking back at the encryption market, DeFi can be said to be an inspiration for this round of bull market, and the Yearn platform has re-enacted the story of BTC. Today, people may like to use words with digital levels such as DeFi1.0, DeFi2.0 or DeFi3.0 to define the development process of DeFi, but this is not the most important thing. The important thing is that DeFi has been developing. The governance scheme combined with DAO has become one of the hottest development directions.

TokeMak, an asset reserve pool that has iterated liquidity mining, first proposed and applied the DAO TO DAO governance model. Create a reactor (asset pool), the reactor is mainly composed of two roles, liquidity provider and liquidity guide.

Take examples as evidence

As an example, here is the reactor created by TokeMak and AAVE:

On the left is the liquidity provider (LP, Liquidity Providers): Deposit a single asset into the Token reactor to obtain the corresponding tassets certificate, so as to ensure that the deposited asset can be exchanged 1:1 when exiting. During the liquidity provision period, the non-TOKEToken income obtained from the external liquidity provided by the reactor assets will be directly deposited into the Tokemak protocol and managed by the Tokemak DAO (composed of Toke holders). Liquidity providers only get Toke rewards.

The right side is the liquidity guide (LD: Liquidity Directors): use the pledged TOKE to control the whereabouts of the liquid assets in the designated reactor . They stake their TOKE into a given reactor and use that stake as a voting right to direct liquidity to the Dex of their choice.

Currently this reactor can bootstrap decentralized trading platforms including Uniswap, Sushiswap, Balancer, Deversifi. Liquidity guides will also receive Toke rewards. In this way, TokeMak has given investors the highest authority in terms of entry methods and optionality. At the same time, it has also transformed the previous active income into passive income in terms of income. This step is indeed in addition to Institutional investors have also given individual investors some hope.

Lack of support

If you look carefully through the entire "investment" steps of TokeMak, whether it is a liquidity provider or a liquidity guide, the final income will all come from TokeMak's platform Token. At this time, we will I have doubts. Assuming that TokeMak's platform currency is worthless and there is a large loss of users (including institutional and individual users), TokeMak will only be eliminated. If the hypothesis is true, where will investors go and save?

BlackHoleDAO

Superior protocol mechanism

BlackHoleDAO has built a new set of standardization on the basis of DeFi3.0 Model, BlackHole DAO The destruction mechanism draws on the traditional stock market split and merger principles to solve the imbalance between high inflation and deflation in the market. And in the new mechanism, credit lending services based on DAOs are launched. It can be simply understood as an asset management company service agreement, which includes split and merge functions, and unsecured credit loan services based on the agreement itself. We can think of it as a lending business similar to a bank.

No inflation risk

BlackHoleDAO At the same time, it skillfully uses the stake and bond principles in Olympus and upgrades them. In order to solve the original high inflation problem of Olympus, BlackHoleDAO enabled the deflation mechanism on the premise of determining the total amount of Token, which solved the original inflation problem while passively earning income.

Asset Management DAOs

BlackHoleDAO Protocol is supported by the treasury, in which the smart contract connects the VC Pool and the Donation Pool, and the VC Pool supports multiple currencies for investment, part of which is used to destroy the liquidity pool BHO (BlackHole DAO pass), the other part is used for credit loans after the successful investment of DAOs, while the Donation Pool accepts direct investment in BUSD from investment institutions and DAOs teams, and finally returns at 2 times BUSD. In turn, the Transaction Fee Pool is Donation Pool, DAOs community, Black Hole Reactor provide operational guarantees.

BlackHoleDAO's most noteworthy VC pool, we can understand it as another way to buy Bond, but the VC pool only accepts non- Stablecoin, NFT, liquid LP and other valuable certificates, Token, NFT, and liquid LP launched in the VC pool are voted through the currency proposed by each DAOs community, and can be launched if passed.

Strengthening supportive stocks (BHO)

Among them, after the VC pool reaches a certain amount of assets, liquid LPs will take out a certain proportion of different Tokens to form LPs, and then give them to Curve, Leading products such as Compound and Aave provide liquidity and LP lending services, and all proceeds will go into the VC pool to support the circulation value of stocks (BHO).

Tokens that can be selected into the VC pool need to pass strict review and screening by the DAOs community, which can prevent malicious behavior from causing long-term damage to potential assets Tail churn effect, thus avoiding the shrinkage and inflation of stocks (BHO), here seems to have a sense of decentralized grayscale funds, and at the same time, it is more friendly to individual investors. There is no doubt that excellent precipitation assets will surely support the stock (BHO) of the BlackHoleDAO Protocol protocol to walk out of a beautiful curve that rises steadily. So far, we seem to have clearly seen a solution that can satisfy a variety of investment users.

Summary

BlackHoleDAO is more like a decentralized Berkshire company. All users invest digital assets in exchange for BHO (similar to stocks), and rely on asset appreciation to provide value support for BHO. The development trend of digital assets is high-speed upward. BHO brings together digital assets of almost all categories and passively manages these assets.

Overview the difference between the above 4:

Comparison The above investment paradigms, from Buffett’s Berkshire to Grayscale Fund and then to DeFi’s investment evolution, can be said to have undergone great changes, and one thing that cannot be ignored in this process is that the compatible methods for investment users are becoming more and more tolerate.

The development of investment methods allows us to provide various users with their own investment solutions, and the initial active income has gradually become passive income. If someone needs me to recommend an investment method suitable for them today, I think BlackHole DAO can give you what you want.