This content originally appeared on Level Up Coding - Medium and was authored by Jayden Levitt
Tim Denning wrote in a blog recently that if you are going to be good at writing, you need to “live an interesting life”.
Today after spending 5 hours talking to virtual friends in the discord, most I’ve never met in person, I walked around my local park anti-clockwise to mix things up.
Living this “interesting life” is going to be pretty demanding.
My one saving grace is that I’m on about round 7 of reinventing myself. As someone who struggled with entrepreneurship and is a reluctant employee, Web3 appears to be my fix.
Founders do all the work, and you get a share in the economic value of their project. Provided it does well.
All you’ve got to get right is to be outstanding at picking the best projects and founders.
What a fucking no-brainer.
When setting out on my Web3 journey, I promised myself that I’d continue to scratch my curiosity itch. And not be in the ‘no’ business.
So when I came across a method for collateralised loans, I was all in for the learning.
NFTfi is a peer-to-peer platform for lending and borrowing. You can get loans anywhere from 7 days up 90 days, with whatever interest rate you agree with the lender.
Usual lending amounts are around 50% to 60% ‘loan to value’ depending on market conditions and what NFTs you’re leveraging.
I am in no way a professional at using leverage, but I needed the experience of doing this to know what to do in the future.
While the market was distracted by the Moonbirds, VeeFriends Series Two, and the Bored Ape land sale — Veecon tickets were a tremendous value buy at a floor price of 0.35 ETH. Or so I thought.
Before diving in head first and sabotaging a portion of my portfolio, I looked at heaps of in-depth Data.
The Veecon Opensea collection only had 6.5% of the tickets listed for sale. And there was still intense buying pressure with about 40 to 70 sales daily. Some flippers, I’m sure.
To get a feel for the market sentiment, I searched through Twitter to see if people were talking about Veecon, and I could see that people weren’t just talking about it they were excited at the prospect of going and getting hold of a ticket.
I did the same in the Veecon channel of the Veefriends discord.
People’s opinions and what they say online aren’t enough for me to make a play at something like this, so I researched ticketing data for an ‘In Real Life’ events company called Eventbrite and found in-depth analytics.
The information showed that most events have the bulk of their ticket sales after the initial release of tickets and at the end.
Well, thank you, captain obvious.
The sales journey would look a bit like a half-pipe on a chart.
Data also showed that 30% to 40% of the supply sold happened in the last week leading up to the event.
Veecon Tickets Collection only had 6.5% listed. I was in business.
While aboard the data train, I sourced a free site called Semrush, which allows you to search competitor websites to peek at their traffic.
Veecon.co showed a slow uptick in people visiting the site, with around 2800 people going there organically and consistently daily.
Americans made up 92% of the traffic, arguably making
them more likely to purchase to attend the conference.
I then searched Google Trends, which usually works in lockstep with market sentiment. And the chart appeared to trend upwards.
I’d looked at every angle possible and had researched the collateralised loan platform to the Nth degree, and I was ready.
I got 4 collateralised loans against 4 VeeFriends totalling a loan amount of 25ETH and went ahead and swept the Veecon ticket floor.
I backed my conviction and research, but I’d be lying if I said I wasn’t quietly shitting myself.
Being leveraged was probably the first time I didn’t entirely enjoy the Web3 space.
Buffet said it best. “The quickest way for a smart person to fail is by using leverage. You only have to be wrong once to get wiped out. It’s like being Cinderella at the ball, you’re enjoying the wine and food, but sometimes you forget you have to leave at midnight.”
Anyway, that quote did fuck all for me.
To mitigate risk, I staggered the loans with the first two over 30 days and the other two over 90days, potentially giving me some breathing space in case the tickets didn’t sell.
Or if ETH tanked, I’d be in a great position with the small amount of fiat to cover any shortfall.
As luck would have it, ETH has now tanked.
Ironically right before the actual conference, the NFT market started to unwind.
The whole market was correcting. “Hold on, wait a minute. Something ain’t right.”
My arse began to fall out.
People suddenly realised the Jpegs they were buying were Grossly overpriced for the utility they were receiving.
Apparently, it was “Maturing”.
For the record, I thought Veecon was grossly under-priced. But, the tickets never went back up in price. They continued to drop.
Before and during the conference, I sold at an average price of 0.25ETH. After fees, it was 0.23ETH.
Of my 65 tickets, I gave 4 away to people in the community. Kindness is gangster, especially while you’re getting ‘Rekt.’
I estimated a total loss of around 12ETH. That’s not even the worst part.
On the last day of Veecon, Gary Vee is chilling there on the couch with Snoop on stage, like he was sitting in his front room.
Casually announces that if you hold a Veecon Ticket, that will be your pass for a collaboration he’s doing with Snoop Dog.
My heart sank when he said, “Here’s what we’re gonna do with the Veecon tickets.”
My collateralised loan performance was now becoming a bit of a cluster fuck.
Veecon tickets pumped back up to 0.6ETH off the Snoop Dog news, and I wanted the ground to swallow me up and disappear entirely.
Everyone in the stadium was whooping and hollering like they had won the Super Bowl.
My English friend stood next to me, shouting, “Let’s Fucking Go.” in the thickest American accent I’ve ever heard.
He’d been in Minnesota for 4 days.
Biggest lessons I learnt.
- Whilst you’re in control, 99% of what you short-term trade isn’t
- Leverage fucks with my head
- I do infinitely better just buying and holding
- I could have tested the water and borrowed a smaller, more manageable amount of ETH.
- If Gary sees this blog, it was probably all worth it.
None of the above is financial advice. I’m not a qualified financial advisor, and despite my best efforts, I also can’t predict the future.
The NFT space is risky.
Experts say that 99% of current projects are going to 0.
I Borrowed 25ETH Against 4 NFTs And Nearly Got Rekt. was originally published in Level Up Coding on Medium, where people are continuing the conversation by highlighting and responding to this story.
This content originally appeared on Level Up Coding - Medium and was authored by Jayden Levitt
Jayden Levitt | Sciencx (2022-06-22T15:11:32+00:00) I Borrowed 25ETH Against 4 NFTs And Nearly Got Rekt.. Retrieved from https://www.scien.cx/2022/06/22/i-borrowed-25eth-against-4-nfts-and-nearly-got-rekt/
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