Signal to Noise

This post first appeared on Warpcast.

 

In an up market, there is an increase in both signal and noise.

Signal

  • technology maturing, expanding the adjacent possible
  • more talented teams are starting interesting projects
  • price reflexivity leads to more general interest and usage
  • velocity of experimentation accelerates; new best practices emerge 

Noise

  • more mercenary teams start hot narrative; copy-pasta projects
  • everyone is launching a narrative, a token, and the tokens pump
  • a flurry of projects raise overpriced rounds

Because everyone in crypto is an investor to some degree—whether by holding tokens or starting/working on a startup—it’s important to parse the increased volume by taking a balanced view of the short-term opportunities and a disciplined view of the long-term opportunities.

A few principles I try to remind myself of:

  • Short-term token prices are not indicative of long-term success.
  • Projects that burn white hot are more likely to experience black swan corrections. 
  • In a high-noise environment, time management is paramount: measure time spent on short-term games vs. long-term games. It’s perilous to ignore each, and worse to confuse them.
  • When working with partners, it’s important to suss out which game they are predominantly playing.

Ten years into crypto, I continue to play the long game. That said, it’s important to understand the game that’s on the field—and sometimes the best way to understand it is to play it. There is signal in the noise. But don’t get lost. Spend your time wisely.

 

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