"How To DeFi" author Darren Lau: Mistakes to avoid in 2022

Amidst the downturn in the cryptocurrency market, author Darren Lau of "How To DeFi" reflects on past actions and vows not to repeat the same mistakes in 2022.

Amidst the downturn in the cryptocurrency market, author of "How To DeFi," Darren Lau, tweeted a reflection on his actions and vowed not to repeat these mistakes in 2022.

Here is the translation:

1. Becoming a blind believer in certain projects, holding coins for too long, and ignoring warnings. When the development team makes no progress, or when the project offers more rewards than profits, or when the project loses its appeal, it is easy to earn several times the profit by holding other assets in the market, but feeling no guilt when the project only grows by single digits.

Darren Lau stated: "One strategy I should have done better is to take profits, increase the position in major assets, and then hold onto those severely undervalued assets with poor liquidity and trading volume." He mentioned, "The problem with most garbage is when no one is talking about it, its trading volume and liquidity will dry up. Being a paper millionaire is nothing to be proud of because you might face a 50% slippage when you exit."

2. Being too lazy to play across chains. When Matic's reward program was just launched, Darren Lau admitted he was too lazy to engage across chains, just watching friends play QuickSwap, DinoSwap, and Titan. But when Avalanche used the same tactic, he knew he had to act.

3. Being too lazy to learn hedging and trading options. Darren Lau always watched big players like @AviFelman and @lightcrypto play options but never bothered to learn. As a result, he suffered when the market declined.

4. Being too focused on specific concepts. DeFi had almost no performance in 2021, especially compared to competitive public chains and NFTs. If he had known how much people would love NFTs, he wouldn't have stubbornly held onto his DeFi positions and would have changed his bias in DeFi.

5. Being scarred by the bear market from 2018 to 2020. Watching a bunch of competitive public chains plummet to super low prices like FTM and MATIC, Darren Lau chose to ignore these coins when they took off, even though the current market is very different from back then. Therefore, he eventually bought these coins at much higher prices.

6. Buying spot assets in a low market value but failing to: correctly estimate their value and hold them long enough. Sometimes you may think you've earned several times the profit and should take it back, but the market hasn't seen the value of the coin at that time.

7. Ignoring the signals of a fading macroeconomy and bubble. Darren Lau mentioned that when all traditional financial and trading experts are giving warning signals, he thought, "Even though I'm not a trading expert, I've already made several times the profit." Thus, he pretended not to see his investment portfolio shrinking significantly.

Sometimes even ignoring some significantly shrinking assets, at that time he should have:

• Considered doubling down at the low point
• Admitted defeat and redeemed

8. Chasing after randomly surging junk coins that even he couldn't convince himself of, ending up with a dump or facing team exits. Although sometimes entering the market without research may lead to profits, Darren Lau usually didn't experience that himself.