Written by: Lao Bai
It's been two years since I wrote the Diamond Hands series, so here's a third edition, which is likely to be the last one. Because in this cycle of the crypto world, apart from rewarding BTC diamond hands, almost all other profits have been ruthlessly washed away. The previous Diamond Hands series leaned towards finding Alpha, but this time it's more about Beta, as some Alpha seekers from before got badly burned, making it hard to look back on those days.
The biggest Beta is, of course, the top three: BTC + ETH, SOL, BNB. As for altcoins, I personally currently favor these four below and plan to continue investing in them.
1. AAVE - AAVE is one of the few assets, aside from the top three, that you can hold for a long time and sleep soundly. Its TVL has already broken previous highs to over 30 billion, and what's more commendable is that it hasn't experienced a major security incident in all these years. You see traditional financial institutions like JP Morgan testing blockchain, they prioritize AAVE as the first point to test something.
This wave of RWA+ stablecoins, combining blockchain with traditional finance, enhancing efficiency quickly, well, and economically, is destined to be the primary direction for blockchain's future development. The assets that can hitch a ride, aside from public chains, Uniswap/Curve's certainty isn't that high, while AAVE is definitely a leading asset that is guaranteed to be on board. The upcoming V4 launch in the next few months is also quite anticipated, so it's worth investing in.
2. Pendle - TVL has reached 6 billion, close to its previous high, and is very stable, about to usher in the third wave.
Pendle's first wave relied on Sushiswap and some DeFi protocols to separate liquidity mining and other yields, but it lacked noise and heat because those yields were indeed quite insubstantial.
The second wave is the previous boom based on Lido and Eigenlayer's LST/LRT, which soared. After all, the yields have been quite tangible.
The future third wave will be RWA and stablecoins, where yield segmentation and risk separation in traditional finance is an extremely important track, with a huge market (over $10 trillion). As more RWA and stablecoin assets emerge on-chain, this track will undoubtedly rise with the tide, and unlike AAVE which still faces competition from Compound and Morpho, Pendle basically stands alone in this track, where competitors are nowhere to be seen even with a telescope.
The only downside is that the coin prices are too stable, with little fluctuation. Let's hold on and see for a few months.
3. Hyperliquid - The strongest player in this token issuance cycle, without a doubt.
The crushing user experience of other on-chain perpetuals + the overwhelming trading depth leads to dominant trading volume and market cap.
Moreover, Hyperliquid is not positioned as a perpetual; it is an on-chain liquidity layer. The recent integration with Phantom is the best proof of this, and in the future, more front ends will connect to Hyperliquid's liquidity backend.
In addition to the large daily buybacks, there are also plans to build the HyperEVM ecosystem, HIP-3's RWA perpetual, and various other initiatives in the works.
However, Hyper is the only one that I haven't invested in yet. The reason is that I sold all the airdrops 4-10, and seeing its current market cap of nearly 50 billion makes me a bit resentful + hesitant. I hope to find a good opportunity in the future; I must invest, at worst, I can wait until the next bear market to invest...
4. Bittensor - I used to have a bias against Bittensor until recently when I figured it out and decided to invest in it for 6-12 months.
The reason for my skepticism is naturally its PMF; I started questioning it in 2023, and I still have my doubts. I always feel that Bittensor is very similar to Filecoin.
Filecoin fills its platform with garbage data without real business demand, while Bittensor creates demand for itself without real business needs, resulting in miners churning out reasoning results that are of no real use. Last year, many miners colluded with Validators to take advantage of emissions like Rumor and various other dramas...
So no matter how you look at it, this thing seems like Filecoin.
So why have I recently figured it out?
First of all, the development of Crypto to this stage has disproved a bunch of tracks and confirmed two tracks.
The verified tracks are finance (DeFi, RWA, stablecoins all count) and gambling (meme, PolyMarket, and various forms of on-chain casinos all count).
Among the few still self-evident, Crypto+AI is definitely the largest head, and even if it can't be confirmed in the short term, it's also hard to completely disprove it.
Among all the current AI+Crypto projects, the hardest to disprove is Bittensor.
The reasons are as follows:
It ranks first in market cap, and in this track, it also ranks first in mindshare. When you think of Crypto+AI, it's the first one that definitely comes to mind.
Very few people can clearly explain what Bittensor is doing at this stage. Try it yourself and see if you can spend 10 minutes explaining Bittensor to a friend; can you make it clear?
Currently, the number of subnets has almost reached 100, and next year, two to three hundred should be feasible. Some subnets have indeed achieved PMF and have income - (although most clients are also Web3 projects, and that income can be negligible compared to Bittensor's market cap)...
In January and February next year, Bittensor will undergo a halving, just like BTC, which has a hard cap of 21 million, halving approximately every four years. The upcoming halving will definitely be a significant event.
In terms of emission mechanisms and mindshare, this can be viewed as the BTC of the AIxCrypto track. Its subnet design, consensus, and proof mechanisms are somewhat similar to ETH - if a star subnet emerges that has something with real PMF, it would be akin to Uniswap and AAVE emerging on ETH. After all, its subnets cover decentralized training, data, computing power, reasoning, text, images, videos, drug research, blah blah blah. You can think of all the AI+Crypto subfields, and there are basically one or a few subnets involved in these matters. Thus, compared to other projects, Bittensor feels more like a foundational platform like ETH, especially since subnets can issue tokens themselves this year.
However, Bittensor's biggest problem is also its high market cap, with daily emissions exceeding one million US dollars, making it quite challenging to digest at this stage. If it feels expensive, it might be worth paying attention to in the first half of next year; currently, it can be invested or not.
Okay, the Diamond Hands series is officially concluded. Let's see in the next year or two if this last edition of Diamond Hands can outperform BTC, so let's note today's prices - BTC-118275, AAVE - 312.7, Pendle - 4.43, Hyper - 44, TAO- 433.
