Stock Investing for the ‘Decade of Crypto’ — How to Buy Before the Boom

WSB Token

WSBDAPP TEAM

September 18, 2021

Read it on Medium

Investors are now confident that cryptocurrency is no longer a fad — it’s officially gone mainstream, and is verging on mass adoption. 

What has that got to do with traditional stock investing? As it now turns out, everything.

 Together,  we’ll explore 4 reasons why you’re ‘in’ right before the boom, including:

  • How cryptos and stocks learned to work together
  • Synthetic assets, the major players involved, and how they are created
  • How innovation has overtaken regulation
  • Where ‘stonks’ fit into this investment innovation

We’ll also talk about how you can buy in before the boom…


💎 🙌 ➡️ CLICK HERE TO ENTER ⬅️ 🙌 💎


Reason 1: Crypto and Stocks — Hand In Hand

In the early days of crypto, many stock traders mocked the movement. Others  lacked interest or overlooked its capabilities. And when the crypto market crashed at the start of 2018, the laughter resumed. 

Tough times...

Since then, crypto has found its feet, regained its balance, and continued to grow. Now, even Wall Street wants to capitalise on the growth of the market. eToro, Robinhood, Ameritrade, Interactive Brokers, and Charles Schwab have all either created trading platforms, invested in crypto startups, or introduced Bitcoin futures trading. 

Who’s laughing now?

That’s how the relationship between the two markets started, but it’s now taken a very different direction.

Introducing Synthetic Assets

First:

 You may have heard the term ‘derivative’ (like stock options), which represents a stock or bond that an investor does not own, but can buy and sell when prices fluctuate.

  • Synthetic assets are blockchain-based derivatives. They add the record for the derivative onto the blockchain and create a cryptocurrency token to represent it
  • The synthetic assets on the WSBDApp platform that track prices on the stock market are referred to as ‘stonks’

In essence: synthetic assets (Stonks) = tokenized derivatives.

Synthetic assets can also track millions of other data points for investors to trade against, such as recycling rates, carbon emissions, or Covid-19 transmissions. This is achieved thanks to data oracles. 

Suddenly, investors can trade on the fluctuations of things like stock prices, unemployment rates in London, the weather in Dubai, and thousands of other concepts. This is an ecosystem much larger and more versatile than the traditional stock market could even hope to replicate. 

Stonk Benefits

Why Stonks over stocks?

  • Liquidity is global and available 24/7
  • Transfers are borderless and frictionless
  • There are no KYC checks (yet) - ‘Know Your Customer’ personal ID checks
  • Network costs reward liquidity providers, rather than network owners
  • The potential exists to tokenize and trade anything of interest

Let’s move on and explore who is creating these Stonks…

Reason 2: The Synthetic Tech Arena Is Booming

There are several main entities at the top of the Stonks food chain:

There are a number of other high-quality, mid-quality, and low-quality DeFi platforms (dApps) that are targeting various opportune areas within the tokenized and synthetic asset industry. In no particular order, some of the next best-known players include Cream Finance, MakerDAO, Linear Finance, UMA, Balanced DAO, Deus Finance, and Dafi.

As you can see, the world of synthetics is growing fast and will become a significant area of diversification for any savvy investor.

How easy is it for Stonks to track asset prices?

Our Stonks service is facilitated by the good work done already by Mirror Protocol (and being packed as Exchange Traded Portfolios via our Balancer partnership). So far, we have added 8 Stonks for you to trade at https://stonks.wsbdapp.com. They include:

  • mAAPL | APPLE
  • mMSFT | MICROSOFT
  • mAMZN | AMAZON
  • mBABA | ALIBABA
  • mTSLA | TESLA
  • mGOOGL | GOOGLE
  • mQQQ | INVESCO QQQ
  • mTWTR | TWITTER

Note: This is only the beginning. Our team will add more stonks that the community will choose by voting. Some of the discussed stonks on our community forum are Facebook, Wipro, Nintendo and more, so stay tuned for updates. We aim to replace the TradFi space, and we are not going to stop until we achieve it.

Reason 3: Innovation Overtaking Regulation

Innovators are way ahead of the regulators, and that means it’s only a matter of time before the U.S. Securities and Exchange Commission (SEC) gets involved.

DeFi enthusiasts might wonder how the SEC could even try  to disrupt DeFi, due to the anonymous nature of the activity. But some crypto experts suggest that KYC might eventually be mandated for DeFi too.

The co-founder and CEO of Terraform Labs (the company behind Mirror Protocol), Do Kwon, has his own views. He said that, “[DeFi] is so powerful in unlocking financial services for disenfranchised people around the world.” He added, “it’s better to move fast and break things. Waiting for fragmented regulatory frameworks to crystallize before innovating is counterintuitive.”

He’s not the only one to express this sentiment. In a widely-shared report from Arrington XRP Capital, which specialises in digital assessment management, support for Mirror and DeFi was huge. When commenting on synthetic assets, they described them as “one of DeFi’s most obvious Trojan Horses into legacy markets.”

Does the DeFi space have such grand ambitions? Absolutely it does. 

 There’s plenty of market growth and excitement to come, which will only lead us closer to the ‘boom’ we mentioned at the start.

Reason 4: Mainstream Media Misunderstandings

The  mainstream media still hasn’t  caught on to the disruption that synthetics are about to cause in the market. By the time they do , retail investors will already be piling into synthetics. 

Congrats on beating them to the punch.

On the 6th and 7th of July, 2021, the mainstream media made their first major contribution to the synthetic assets discussion. Articles popped up on Bloomberg, Apple Insider, Business Insider, Fortune, Yahoo! Finance, MSN, and more. All of these articles were essentially echoes of each other. Was it an assault? It’s hard to say... 

But we’ll take the publicity.

We just wish the synthetics first day in the sun was done more justice. Just look at this opening line for example:

“Fake versions of Tesla Inc., Apple Inc., Amazon.com Inc. and other big stocks, as well as a few popular exchange-traded funds, have been created by the projects Mirror Protocol and Synthetix over the past year.”

The word ‘fake’ is intentionally misleading, and rejecting. It’s  a negative spin on synthetic assets. The reality, as we’ve explained, is that Stonks are simply collateralized asset price trackers. They’ve been commonplace in crypto for a while now. Think of synthetic versions of Bitcoin, like WBTC (Wrapped Bitcoin) and Ethereum-based sBTC (Synthetix Bitcoin).

The article goes on to back up our point about innovation being ahead of regulation stating that, “these instruments raise questions about how they fit into a global stock market and brokerage industry governed by thousands of pages of rules from dozens of countries.”

The problem is, synthetic assets aren’t really derivatives. Stonks are not really stocks. WSBDApp is not really a broker. The  nature of DeFi is ever-evolving.

The following quote from Nasdaq earlier this year highlights exactly why ‘stock investing’ in crypto before the boom comes might be an incredible decision.

“The ethos of digital assets and decentralized finance (DeFi) lies in openness and transparency. Unlike traditional finance, DeFi does not rely on centralized authorities like banks or brokerages functioning as the intermediaries between transacting parties. Instead, a public ledger records and verifies transactions directly on a digital blockchain for all to reference, eliminating opacity and cumbersome bureaucracy. Since a centralized authority does not exist, investors are empowered with the autonomy to instantly access, trade, and transfer assets with ease. Crypto synthetic assets also allow investors to invest in new, emerging crypto commodity classes.”

Continue Stock Trading, but Upgrade to Stonks


💎 🙌 ➡️ CLICK HERE TO ENTER ⬅️ 🙌 💎

Stonks Are Here To Stay

Everything new and popular is a fad, until one day it isn’t. Eventually, it can reach the point where its value is recognised on a long-term basis..

Synthetic assets have gained phenomenal interest in the Decentralized Finance (DeFi) realm because they are a tool that unites traditional stock traders, globalization, the crypto world, and ‘gains’ into one bit of tech.

Another reason that Stonks are an upgrade is the potential to earn interest on them by staking them in liquidity pools. You can read about that process here. But know they offer a way to  generate passive income using DeFi as the vehicle, and WSBDApp as the engine.

Remember when Robinhood stopped people from trading GME and collecting their profits? Centralized platforms have the power to do that, and since you don’t own the underlying asset, you have little right to complain. Decentralization puts the power in your hands.

Ready to make a start with stonks? Here’s our latest guide on the buying process for stonks.

Why buy before the boom?

If you’re still not sure if synthetic assets are right for you, consider the types of investors  they can benefit:

  • Someone who has trouble accessing traditional securities through major brokers  due to their location
  • Beginners who are on the fence about stock trading vs crypto trading, and want a compromise
  • Someone who is already invested in cryptocurrency and wants to profit on the volatility of the stock market too
  • Early-stage innovators who want to get on board with a technological innovation in the blockchain space before it blows up 

There will be readers out there, and you may be one of them, who are quite happy trading traditional stocks. They’re happily ignoring the marvellous world of crypto. Happily believing that the risks outweigh the benefits. If that sounds familiar, then the ‘decade of crypto’ might happily pass you by.

To learn what we are building for better investment management through community governance, head on over to the homepage.