(1/2) Some updates on the market and the strategy’s overweight in Lido (splitting the post into 2 because of length limit)
On the overweight in Lido:
- The thesis is actually pretty simple. After the ETH merge, anyone holding ETH is missing out on ~5% yield per year because they are not staking the ETH they hold.
- Lido has a dominant market position in the ETH liquid staking space. Check this Dune dashboard out to learn more about Lido’s market position: https://dune.com/LidoAnalytical/Lido-Finance-Extended
- Generally, I expect ETH to outperform BTC in the upcoming cycle, and then expect Lido to outperform ETH.
- LDO is not another shitcoin that doesn’t do anything. It is one of the few coins that actually (1) has a dominant market position, and (2) accrues value back to token holders by sending 5% of the yield generated from TVL to the treasury.
- It is difficult to time the market but personally I am a top 50 LDO holder myself with no plan to sell anytime soon. I would only become bearish on the project if they start losing the dominant position in the liquid staking space.
- Some behind the scenes: I requested Iconomi to add LDO back in May 2022 but they only added it in August after I complained multiple times. If they added it sooner, CCC’s position in LDO would still be in the money (which significantly outperformed BTC/ETH during the same time horizon).
Is this portfolio actively managed?