The quick view
Performance Related to ETH | June: -2.11% | Q2: -16.88% | NAV: 0.764
Please note that all the numbers mentioned above are related to Ethereum, as it serves as the primary benchmark for 10102 Capital. The market for alternative investments hasn’t matured yet, which explains the ongoing underperformance. However, as elaborated in the strategy section below, now is not the time to divest from these altcoins. On the contrary, we remain steadfast in our accumulation strategy.
I would like to conclude the quick overview with an optimistic note: let's examine the performance trend over the last three months. Could we be nearing the low point of the ETH-to-tokens ratio?
Strategy
The market landscape has been challenging this quarter, to put it mildly. With the U.S. taking a cautious stance on cryptocurrencies and the prevailing high federal interest rates, many fundamental protocols continue to fly under the radar. Even industry pillars like Bitcoin and Ethereum haven't been immune to the downturn.
However, this kind of trend is not unprecedented in the history of cryptocurrencies. We have witnessed similar patterns and fluctuations across various cycles, and they typically resolve over time, establishing a stronger foundation for the entire industry.
As always, the critical aspects to scrutinize are timing and potential outcomes.
Timing
The next six months are shrouded in uncertainty and are likely to be characterized by survival tactics. However, the outlook for this time next year appears brighter. The halving is approaching, and despite recent announcements, federal rates cannot continue to rise or remain elevated indefinitely.
Looking back over the past two years and focusing on the big picture, it seems that this year is situated between a cycle bottom and sideways movement. Generally, this is the best time to accumulate based on conviction, regardless of any other factor. That’s what taking the long view is all about.
Therefore, I’d like to propose a simple framework for consideration - can you endure and remain resilient for another six months of the same trends? If so, you are in the right place; don’t expect any significant changes in the next quarter.
Outcomes
There are many possibilities ahead with a high level of uncertainty, so I will keep this concise while outlining some significant trends in my perspective.
It's reasonable to assert that Bitcoin and Ethereum will likely continue to dominate the cryptocurrency market in the foreseeable future, which is the next 5 years. During this period, we can expect substantial expansions in both ecosystems.
On the Bitcoin front, the Lightning Network remains promising as it continues to gain traction. Additionally, Ordinals are engaging a whole new audience and increasing miners' revenues, block subsidies aside. In my view, these developments are encouraging.
Ethereum is evolving at a rapid pace, and its progress has been impressive thus far. Not only have all the major upgrades been executed without hitches, but the upcoming ones also seem to be well-conceived. The development of Layer 2+ solutions is particularly noteworthy, as they provide practically limitless scalability.
One of the critical developments to anticipate is the enhancement of interoperability across Ethereum's layers. This development, coupled with account abstraction, is expected to lead to improved user interactions, and consequently, an enhanced DeFi (Decentralized Finance) 2.0 experience.
Along the same lines, the creation of digital identity systems through strong public infrastructures such as ENS (Ethereum Name Service) and EAS (Ethereum Attestation Service) is set to make a remarkable impact. These improvements are likely to pave the way for the development of credit-based applications and various identity-related services.
The future of privacy-centric initiatives, particularly in the United States, remains uncertain. Nevertheless, zero-knowledge proof-based technologies are expected to continue gaining popularity in other regions.
Concurrently, AI (Artificial Intelligence) is anticipated to maintain its momentum and attract significant interest due to its exponential expansion. Though the integration of AI within the cryptocurrency domain is still in its infancy, the potential is enormous. Between startups using the AI buzzword to draw investments, and well-established companies using AI to broaden their scope, the latter is the more promising and likely to succeed. AI is expected to revolutionize various sectors and as these transformations unfold, new opportunities will emerge.
As always, 10102 Capital will be vigilant and ready to identify genuine innovations early on and support them as long as the Enzyme Finance protocol permits.
It is essential to note that, given the aforementioned assumptions, there will be increasingly limited opportunities for other Layer 1 protocols as time progresses. Unless there is a revolutionary technological breakthrough, alternatives like those that emerged in 2017 will find it difficult to compete. While some ecosystems such as Cosmos remain robust, very few others are likely to flourish to the extent observed in previous cycles.
In summary, 10102 Capital’s portfolio is strategically positioned to capitalize on the imminent paradigm shifts, accompanied by a wave of innovations. This is due to our investments in some of the most visionary and resourceful organizations in Web3, including Chainlink, Uniswap, The Graph, ENS, AAVE, and Polygon.
Portfolio updates
We believe that accumulating foundational assets is crucial. Accordingly, we have been actively doing so. See the activity tab for details, or below for a summary.
Portfolio changes in Q2 | +40k GRT | +15k IMX | +6k MATIC | +1.3k LINK | +1.2k UNI
Balancer treasury report, June 19th by Karpatkey
ENS treasury report, June 19th by Karpatkey
Chainlink report of Q2 2023 (official). The image below speaks volume about the “Chainlink Effect” for developers.
Manager’s Contributions for Voting Power Delegation
On May 12th, 15k IMX from the manager’s wallet were transferred to the vault, resulting in a nearly 5% increase in the NAV due to the additional value equivalent to 6 ETH. The transaction linked below represents the first exchange of its kind, where value was exchanged for voting power accumulated in an investment fund.
On June 19th, an additional 3k BAL were transferred from the manager’s wallet to the vault, which again boosted the NAV by approximately 5% due to the extra value equivalent to 7.5 ETH.
Company Information
10102 Capital
At 10102 Capital, we are continuously evolving and innovating. After the successful completion of our Chapter 1, "Tokenpot Capital" we are excited to introduce you to Chapter 2 - 10102 Capital, our futuristic brand. Read the full story of Tokenpot Capital here.
For a quick overview of our company and performance, visit our Dashboard (please select ETH on the upper right corner for the proper benchmark numbers).
Contact Us
For any queries or document requests, please email us at info@10102.io. Note: Participation is open to US accredited investors only.
Investment Opportunities
Documentation Requirements
To participate as an investor, the following documents are required:
Proof of Accredited Investor Status (for US investors)
Identity Verification Documents (e.g. Passport, Driver's License)
Additional documents as required (automated via DocuSign)
Please request the necessary documents by emailing info@10102.io.
Community Engagement
Discord Community
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Private AMA Sessions
Interested in learning more or have specific questions? Book a 1:1 session with me on Evolve for a private Ask Me Anything (AMA) session.