👀 Wait - is this free money?

GM everyone. This is 2036.

This week, every crypto influencer and their mother is busy promoting Fantasy Top.

Fantasy Top is a fantasy football-like crypto game where the players are Twitter influencers.

You build a deck of the Twitter influencers you believe will have the highest engagement rates and compete against others.

Someone on Twitter said, ‘It's like you're at kindergarten, and there's a game where you need to pick who will be the 5 most popular kids for the week.’

It’s:

• played on Blast, a new-ish Ethereum Layer 2

• heralded as the new app that will onboard millions onto blockchains

• promoted as offering ‘literally free money’

Sounds great, right?

Well, here’s the catch…

Every time you:

• trade an influencer's card or

• use their referral link — they receive a portion of that transaction. And some are making a killing.

Top influencers were paid $15,000-$20,000 in the first week alone.

But in the pyramid of who makes money in this… influencers are at the top - and you guessed it - users are at the bottom.

That means influencers are heavily incentivized to promote this app because they make money from users who buy their cards.

And so, although it seems like the new hot app in town, it’s only because the people with the loudest voices make the most money.

Users take the most risks and stand to make the least, but no influencer will tell you that.

Naturally, there are two caveats:

• if you’re an aspiring influencer/content creator, you could make money if Fantasy Top takes off.

• the incentive structure might change in the future. I’ll keep my eyes on the app, but for now, the odds are heavily skewed in favor of influencers. And that’s why you might have heard of the app already.

Ok - so why am I telling you this?

I’m not here to be a party pooper, but I’ve seen this scheme a thousand times before.

And most of the time, we gloss over a few critical things:

1/ Incentives are everything.

Not every crypto influencer is out to get you.

But I could bore you with the sheer number of influencers promoting projects to their followers while simultaneously dumping their coins behind their backs:

That’s the dark side of crypto - and its influencers in general, whether on Twitter or YouTube.

This became clear during the SatoshiVM scandal, in which many of your favorite influencers were paid to promote coins they were actively trying to sell.

Understand that their incentives aren’t always aligned with yours.

Influencers promoting projects in which they make money off of their followers have a call option on the future:

• if it works out = they win big

• if it doesn’t = they don’t lose anything and can move on to the next thing

Most of the time, they conveniently forget to disclose they own tokens or are paid to promote a project.

2/ You’ll often be late and feel FOMO. And that’s ok.

Once retail arrives, you’ll feel fear of missing out a lot.

Your friends, spouse, favorite celebrities, etc., will tell you about new coins and projects that are ‘JUST ABOUT TO POP and that you absolutely need to invest in.’

But feeling FOMO doesn’t mean you need to do anything about it. Most of the time, it’s just a psychological trap you’ll regret.

Yes, many tokens will go up a lot.

But it’s often much better to invest in a category leader - even slightly late but with size (adding fuel to the fire) - than to try to catch the next hot thing.

Unless you:

• spend 12 hours a day on crypto or

• invest in early-stage rounds

…you probably won’t be early enough to 100X your money.

Instead, you can make 10-20X your money on category leaders with much less risk, which is why I recommend you…

3/ Don’t try to catch every narrative.

The bull market will get crazy, influencers will promote the hell out of projects, and there will be something new to do or invest in every week.

Last month, it was Cryptovalley. This month, it’s Fantasy Top. Tomorrow it will be something else.

That’s not to say Fantasy Top won’t take off. It could.

But if you only invest in “the next thing,” you’ll end up with an embarrassingly large collection of useless coins and NFTs - and none of the good stuff.

You’ll pray for your narrative to resurface, watching your coins slowly fade into oblivion.

But the influencer who sold you on the idea has already dumped their tokens and moved on.

So:

• be curious, open-minded, and willing to try new things, but…

• don’t believe you need to chase everything to succeed in crypto

• with the new, risky things; beware that you’re probably gambling and could lose everything. So don’t bet more than is reasonable.

• if your favorite influencer has a referral link, is an early investor, or makes royalties, double-check that you also come out on top.

It's better to invest too late in a strong trend than too early in a trend that never takes off.

1/ Fantasy Top pays $1.25 million to Twitter influencers

2/ Donald Trump will spend time with his NFT buyers

3/ The most important trend in crypto

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.