What are On-chain Assets?
Core Advantage
The biggest advantage of on-chain trading is that retail investors can participate in projects' early stages just like VCs, without any lockup period. This means everyone has the opportunity to achieve 10x or even 100x returns.
On-chain assets are digital assets issued and circulated on the blockchain. Compared to traditional exchange-listed tokens, on-chain assets provide retail investors with genuine early-stage investment opportunities.
On-chain Tokens vs Exchange-listed Tokens
| Feature | On-chain Tokens | Exchange-listed Tokens |
|---|---|---|
| 🎯 Initial Market Cap | Extremely Low (<$1M) | High (>$50M) |
| 💰 Investment Cost | Very Low (Launch Price) | High (Post Multiple Rounds) |
| 📊 FDV | Low, Room for Growth | High, Limited Upside |
| 📈 Potential Return | 10-1000x Possible | Usually 2-3x |
| 🔒 Selling Pressure | Initially Low | Heavy VC Unlock Pressure |
| ⚡ Price Discovery | Natural Market Forces | Institutional Pricing |
| 💸 Entry Barrier | Extremely Low | Medium |
| 🛡️ Risk Profile | High Project Uncertainty | Mature Projects but High Price |
On-chain Token Advantages
1. True Early-stage Opportunities 🌟
- Low Market Cap Entry: Participate at project inception
- Value Discovery: Part of complete market pricing process
- No Institutional Premium: Avoid institutional investor markup
2. Purer Market Environment 💫
- Lower Selling Pressure: No large-scale institutional unlocks
- Community Driven: Natural price discovery by market
- Full Transparency: All transaction data visible
3. Greater Profit Potential 💰
- Low FDV: Ample room for value growth
- Early Valuation: Lowest cost entry
- High Potential Returns: 10-1000x possibilities
On-chain Asset Characteristics
1. Community Driven
The most distinctive feature of on-chain assets is their strong community attributes:
- Value Discovery Process: Community members participate in early-stage investment
- Value Creation Process: Community participates in project development
- Decentralized Participation: Retail users can acquire tokens at low prices
2. Community Formation Mechanism
Why do communities form? On-chain projects are often created by small teams, and retail users can acquire tokens at low prices. To increase their token value, they're willing to contribute effort to help the project. When a group of people with the same goal comes together, a community forms. Building the community means promoting the project, aiming for token appreciation or product breakthroughs.
Community formation factors:
- Small Team Creation: Most projects initiated by small teams
- Common Interest: All holders want token appreciation
- Participation Motivation: Users willing to contribute
- Community Building: Promotion through interaction
3. Market Characteristics
High Volatility 📈
- Price Movement: Daily fluctuations can be several times or even tens of times
- Opportunity: Potential for quick profits
- Risk: Can also depreciate significantly; some projects may be rugs, leading to total loss
Quick Liquidity ⚡
- Trading Speed: 24/7 trading with numerous bots and signals
- Market Response: New information quickly reflected in price
Information Sensitive 📊
- News Impact: Highly sensitive to project progress and market sentiment
- Community Impact: Social media discussion directly affects price
- On-chain Data: Real-time tracking of whale behavior
Participation Guidelines
Risk Awareness
- On-chain assets have both high returns and high risks; high risk corresponds to high returns, position size must be managed
- Start with small amounts for learning
- Follow market trends, seize opportunities; gain experience through practice
Information Gathering
- Monitor project community dynamics
- Analyze on-chain data
- Track market sentiment
Tool Usage
- Use professional on-chain analysis tools
- Learn trading platform operations