Whats An ICO? DAO? Platform? Learn about the different asset classes in the Crypto World.
As you all know, when it comes to investing, I preach diversification. But how does one diversify their portfolio in the crypto world? First, we must learn about the different asset classes, and in doing so, we can apply the principals in Ray Dalio’s All Weather Portfolio to set up a portfolio that will out-perform the market. Learn how to set up the best Cryptocurrency portfolio below.
ICO: First on the agenda Is ICO’s. What is an ICO you ask? ICO stands for Initial Coin Offering. Wikipedia tells us: Initial coin offering (ICO) is an unregulated means of crowdfunding via cryptocurrency. The term is often confused with ‘token sale’ or crowdsale, which refers to a method of selling participation in an economy, giving investors access to the features of a particular project starting at a later date.
So how can we use ICO’s when Investing in the crypto market? Usually, company’s that perform ICO’s will have instructions on their landing page on how to participate in the sale. Look out for incentives, and platforms that have a good dev team. Beware that investing in ICO’s is risky, and as such, only invest what you are willing to lose.
DAO: A decentralized autonomous organization (DAO), sometimes labeled a decentralized autonomous corporation (DAC), is an organization that is run through rules encoded as computer programs called smart contracts.
The Original DAO was launched in 2016, and failed in a matter of months, but since then several crypto’s have restructured the foundations of the DAO and are working today, some examples would be Ethereum, NEO, and Decred.
History would suggest that DAO’s are a solid choice for investment, just look at the historic charts of Ethereum.
Platform: Platforms can sometimes fall under the same catergory as DAO’s, such as Ethereum, but platforms can be used to make Daps, applications built on the blockchain, a good example might be Sratis (STRAT). When Investing in platforms, look at other companies that might also be investing and using the platform to create their application. This information might be a good information that the platform will increase in value over time.
Others: There are a multitude of other asset classes, to gain maximum exposre, it would be good to create a plan, and build your portfolio on asset allocation principals explained in the all weather portfolio. I have listed some other Cryptocurrency assets below that come from the Iconomi Investment fund.
Monero (XMR)Anonymity9.06 %14.91 %
Golem (GNT)Decentralized Computing5.85 %2.81 %
Steem (STEEM)Media5.68 %3.24 %
Siacoin (SC)Storage5.54 %2.36 %
Waves (WAVES)Programmable Platform5.14 %4.53 %
Augur (REP)Prediction4.17 %2.63 %
Lisk (LSK)Platform3.92 %3.76 %
GameCredits (GAME)Gaming3.13 %1.75 %