The Fringe is an area filled with mystery and the fog of the unknown. The Fringe is for the adventurous, the gambler, the risk-taker. Will you step into a trap or will you emerge into a place of wonder?
Have you looked at the chart of a coin or stock and wished you got in early, when it was a fraction of the price. Most of the top 200 cryptocurrencies today started in the Fringe. Gamblers and analysts are tempted to pick stocks while they are still in their fringe state, as a meteoric rise could set them off into early retirement. It’s worthwhile to explore and understand how investing on the digital edge is done. If you have some disposable funds available and want to learn how the Fringe works, then hop along on a journey. This is not financial advice. Expect to gain nothing but knowledge of the process that will equip your toolset and help inform future decisions.
The world has employed scouts since the dawn of man. Good scouts identify opportunities, talent, and find things others may not. To have an enjoyable time crypto investing and picking moonshots, you’ll want to develop your scouting skills. First, you will acquire your scout eyes, so that you can find opportunities.
To gain your scout eyes, you’re going to have to dive into the world of metaverse social media. Make new scout accounts if you prefer, but it’s wise to be familiar with Twitter, Medium, Discord, and Telegram.
Twitter is a good tipper and initializer. It will help you find ideas to vet. It will also help you find other scouts and their tippers, allowing your to compare. Medium is a blog-like standard site that most crypto initiatives use to share their vision, strategy, and updates. It’s also a good tool to find details about an upcoming token, figure out what are the goal is, gauge legitimacy, see their team and review tokenomics. Discord servers can help engage a community and is useful for announcements, but be aware that general chat rooms for the community tend to get over-saturated. Telegram is similar in utility for providing announcements. Telegram is a group messaging service for community engagement and has similar utility as Discord for pushing announcements.
Launchpads are an excellent place to scout upcoming projects. A launchpad is a website that vets and funds initiatives and new coins nearing entrance into the marketplace. Launchpads usually conduct an initial exchange offering/initial dex offering/initial coin offering, which is where the first “shares” of the company are made available to the public. The prices during a IEO/IDO/ICO are usually much cheaper than the price that will go live on public trading. Usually there are contests, giveaways and airdrops for ‘lucky’ individuals that support and help boost publicity of a token. To take part in the initial offering, you must get on a Whitelist of approved and vetted individuals. Unfortunately, if you are from America, North Korea, Iran, China, Syria, Venezuela, or Sudan, you cannot participate in these because your country’s economic policies are not free enough. Read more: SEC Financial Discrimination
However, even if you can’t participate in the launches, you can still use Launchpads to find and scout upcoming projects of interest. It’s unfortunate that you can’t get in for the lowest prices, but you can still usually get in early enough.
Below are just a few examples of different launchpads:
https://daomaker.com/ | https://www.gate.io/startup | https://polkastarter.com/ | https://dashboard.trustswap.org/app/launchpads | https://occam.fi/ | https://adapad.io/ | https://www.cardanocube.io/collections/launchpad | https://coinmarketcap.com/alexandria/article/the-best-ido-launchpads-for-every-blockchain
For the purposes of the walkthrough in this article, we’ll use an ICO from the launchpad Trustswap that occurred during November 2021 called TrustedNode, which I think serves as a useful example.
After you scout, you need to conduct some vetting to see if this project is legit. There have been many scams and fake coins. Recently, SQUID, a coin based off of, but unaffiliated with the Netflix series, is an example of a scam coin, as it only allowed users to buy, but not sell. Thus the price rose dramatically until the developers pulled all the money out of the crypto and dropped the value to $0. This is a classic move referred to as a “rug-pull”. There have been thousands of coins that have launched, especially memecoins, that are built around hype and use a ‘pump-n-dump’ strategy where they rise meteorically and then all the money gets sucked out by the minters of the coin, with their large low-price reserves.
This is something that you always have to be aware of and one reason to never “yolo” your entire savings into a fringe coin.
Tips and Tricks:
- Check the development team’s LinkedIn Profiles
- Check the Twitter followers and vet the account. Check the percentage of fake followers. https://www.followeraudit.com/
- Check CoinMarketCap. The token should be listed there. Data should exist on the Initial Offering. Check the market cap, circulation. See what contracts exist for the token.
- Review the tokenomics. Look for important data, e.g. how many tokens are going to the team and when can the team sell their tokens. Smart contracts can lock up team profits/vesting for X amount of months/years and help you gauge the trustworthiness of a team.
- Read the whitepaper and the roadmap.
The amount of time and vetting you spend in due diligence is up to you. Sometimes you can get a sense right away, and others take a bit longer. No matter what, if you’re investing in an early stage, low-market cap token, you are taking a gamble. I recommend only using money set aside for taking potshots with your CryptoRevolver (Read more: CryptoRevolver Strategy (Dec 2021)).
Read More: Advanced Vetting (Coming Feb 2022)
In the case of our example pick, TrustedNode, I went to their website https://trustednode.io/, reviewed both the whitepaper and the roadmap, looked at the team, their Twitter account and Telegram.
Their smart contracts were also audited (although the audit was not available when I made my decision to purchase). Link to Tweet: https://twitter.com/ObeliskOrg/status/1464366210099855366?s=20
TrustedNode’s model revolves around liquidity staking and node services for crypto ecosystems, which was difficult to grasp at first, but then it made sense the more I researched it. The stock market has market makers which provide liquidity (and control markets). The crypto principle of DeFi gets rid of market makers, but liquidity is still necessary for trades to occur cheaply and regularly. TrustedNode is a company aiming to address the liquidity problem that cryptocurrencies have to address. It will allow you to stake native tokens (like Solana, or Algorand as examples), earn liquidity tokens from staking those tokens, then restake the liquidity tokens to vaults for more percentages.
After reviewing a handful of other early-stage tokens I was looking at, I decided on TrustedNode because I like utility-based companies. There are a surplus of gaming and NFT projects releasing in the launchpads that I was trying to avoid. I aim to find unique idea’s and models with real potential (and least likely to be a rug-pull). I found a mainstream liquid staking/proof-of-stake service provider, Lido.Fi (https://coinmarketcap.com/currencies/steth/) which bolstered confidence around the idea and its future potential.
Before making my final decision, I tried out TrustedNode staking portal, which was the only feature in the app open at the time. To use the staking portal, you need to have one of the tokens offered on the staking services. The Cosmos Blockchain ecosystem is integrated and I happened to have some Cosmos, so I staked it through the portal and found the interface and user experience to be rather simple. The annual yield through TrustedNode is 11.5%, which was better than my 5% APY on Coinbase. At this point, I felt comfortable enough to use one of my yearly CryptoRevolver (article coming soon) bullets on this company.
The Nitty-Gritty: How to Do It
Buying an early stage coin is not as simple as top 500 tokens. You can’t simply go into a centralized exchange (CEX) like Coinbase or Binance and buy low-cap coins. You need to learn the art of buying the fringe, which is main goal of this training session.
Step 1: You need to find the blockchain the fringe token is on. Hopefully it’s based on ETH, BSC, ADA, AVAX, or a top 10 token. It will be in CoinMarketCap in the top area. TrustedNode example is below:
Binance Smart Chain, or BSC, runs off of Binance’s token, BNB. Many new and coming projects are in the BSC, as you don’t have to pay the outrageous gas fees of ETH based chains, which could be in the hundreds of dollars just for a transaction. BNB is in the cents range. So, if you’re trading in BSC, head over to Binance and make an account if you don’t have one.
Beware: If you deposit cash money in your Binance account, you will have to wait 10 days until you can withdraw your BNB. I found this out the hard way. If you want to buy your token pick right away, while you think the price is good, then you will be better off transferring coin or crypto from another exchange. For example, if you use Coinbase, you can send stablecoin USDC or USDT to your Binance account and convert it in Binance to Binance USD. Or you can transfer money from a MetaMask account to Binance and convert it to BNB there.
Either way, you will be withdrawing the BNB from Binance as a BEP20 network to your Metamask. If you don’t have a MetaMask OR if your MetaMask doesn’t have the Binance Smart Chain configured yet, head over to this article quick to initialize and complete setup: https://academy.binance.com/en/articles/connecting-metamask-to-binance-smart-chain
Note: You can also use BUSD later for the swap, but you will need at least some BNB in your MetaMask account to pay the gas fees.
Once you have BNB in your MetaMask account, it’s time to go to PancakeSwap. If you are not familiar, PancakeSwap is the decentralized exchange (DEX) for BNB/BUSD ecosystem. There are many DEXs out there, such as UniSwap and SushiSwap for Ethereum; SundaeSwap, ErgoDex for Cardano; Gravity/Emeris for Cosmos, and plenty others. These sites are basically mediums for conducting transactions with other, low-cap coins, amongst other utility such as liquidity providers.
If you scroll down to the markets section of you will see what markets your token is available on:
Go to that market next. You can click on the pairing for the link.
In this case, we arrive at Pancake swap and want to buy TNODE, the token for TrustedNode. It’s not in the listing of choices those and when searched, it doesn’t appear.This is the part where you learn how to invest in the fringe. Click the CAKE token dropdown, because that’s the token you want to switch out. Go to the CoinMarketCap profile page and copy the Smart Contract that we showed you before.
Paste that contract into the token search bar and Trusted Node will populate. It will warn you that the token is in the fringe and to make sure you know what you are doing.
The mark of the Fringe. Disclaimers and Warnings.
TrustedNode, or whatever BSC fringe token you are adding, will now appear in PancakeSwap as one of your tokens to swap for. You should see a BNB balance there from MetaMask. If it says Balance: 0, then you probably haven’t connected your wallet, or are set on the wrong mainnet (i.e. Ethereum), so make sure you are on the Binance Smart Chain mainnet.
You will see a conversion rate below. You can’t use all of your BNB balance cause you need some extra in your MetaMask for gas fees. I always try to leave at least 0.05 BNB in my account. Below the swap button will have a summary of costs, fees, and expectations:
You can see the route is through BUSD, so you can make the transaction in BUSD too in the future if that is easier. As long as you have BNB in your MetaMask to serve as the gas for transactions.
Confirm the gas fee, then make sure you click on the “Add TNODE to MetaMask” or whatever fringe token your trading. This will make it so your tokens are visible to you in your wallet. If you already clicked close without adding, then you just have to manually add the contract to MetaMask using these instructions: https://consensys.net/blog/metamask/how-to-view-your-custom-tokens-in-metamask/
Now your TNODE or Fringe coin should appear in your MetaMask under assets. What’s next? If your Fringe token has no further utility, that’s near the end of the road. However, it’s pretty rare for a token to have no utility nowadays, unless it’s a memecoin. Most coins can be staked or added to the liquidity pool of the swap exchange to earn passive income and yields. In the case of TrustedNode, there is further utility that we can and will explore, because it shows some additional training concepts of interest.
Navigate to the TrustedNode app, https://app.trustednode.io/. As of early December 2021, there are two functions up-and-running, and two more coming soon. The first function is the Staking Portal. The staking portal is for staking the cryptocurrencies listed. There’s no use for the TNODE token right now in the staking portal. Instead, you would connect one of the native cryptocurrency’s wallet (e.g. Keplr for COSMOS ecosystem, etc..) to stake the cryptos there and build APR. In the future, there are hints you may be able to leverage TNODE tokens to spur a yield boost on staking, which would be useful. The second up-and-running function on the site is The Vaults. Here you can stake your TNODE token and get rewards back. Right now, while the company is low market cap, the returns are high. The APR will decrease and normalize as more market value is poured into the vaults. There are two vaults. A promotional TNODE vault where you can stake your TNODE tokens and get returns, and also a BUSD/TNODE liquidity vault. The APR on the liquidity vault is currently double that of the promotional vault. Why is that?
To take advantage of the liquidity vault, you would need to stake liquidity provider tokens (LP). A liquidity provider is someone who is contributing to the pool that decentralized exchange users can access to make trades. Recall that a pool of liquidity providers is the decentralized finance version of market makers. Anyone can be one of those providers and they get rewarded with a bit of the swap fees.
The big thing to understand about adding liquidity, is that you need to supply an equal amount of pairing. In the case of TNODE/BUSD, if you have $1,500 worth of TNODE, you also need $1,500 worth of BUSD. Then you use the liquidity tool on Pancakeswap to combine both parts together to create one liquidity provider token.
Pancakeswap liquidity token for TNODE. https://pancakeswap.finance/add/0xe9e7CEA3DedcA5984780Bafc599bD69ADd087D56/0x7f12A37B6921FFac11FAB16338B3ae67EE0c462b
This process is also outlined on TrustedNode’s Medium article about it: https://trustednode.medium.com/?p=3bf428f55e55
This is what the liquidity tool looks like. You put up an amount of BUSD and it will tell you how many TNODE you need. It will also show what percent of the pool you will be. For $7 you aren’t going to get much. For 10,000 BUSD, at this moment, you would have 1% of the pool, as an example.
Once you click supply, you will get final detail on how many tokens you will receive,
Then after confirming, you will need to make a transaction on MetaMask, BNB is the gas medium, and then you will receive the liquidity tokens. Make sure you add the token to your Metamask like you did with TNODE. It will be labelled as CAKE-LP. You should be able to do the above process for most Fringe coins and become a liquidity provider. Then at this point you would be passively collecting money from the fees. You may have noticed the statement below the liquidity conversion:
You likely won’t make that much in fee collection by being a liquidity provider, but it’s better than nothing. You get the accrual once you cash in the liquidity token. Cashing in the liquidity token will un-separate it much like how you joined them, giving you both parts back. Liquidity providers always face the prospect of impermanent loss however (read more on impermanent loss: https://academy.binance.com/en/articles/impermanent-loss-explained)
For TNODE, you can take the liquidity tokens and place them in the liquidity vault to earn higher APR. All you need to do is click stake, connect your MetaMask with Liquidity Tokens and choose how many. Later you can check back and see how many rewards you have earned and claim them when desired. It will be a MetaMask transaction with BNB as the gas medium. Bring them back to Pancakeswap and you can separate them back to your native tokens.
Hope you enjoyed this walkthrough on getting into Fringe coins. The top 10 and 200 are great for core coin holdings, but it is indeed fun to throw some disposable income towards initiatives you like. Who knows… maybe you’ll get lucky and after a little bit of HODL’ing, end up with a nice win. Due diligence will increase your odds of success. Happy scouting.
Disclaimer: We are not affiliated with TrustedNode. They did not ask us to place them in this article. We chose them for the walkthrough because we like the token.
This is part of the Digital Training Pipeline (in-dev until July 2022). Series sector: Edge Investing. Skill Level: Intermediate
Recommended Prerequisites: Traversing the Chains (Coming Soon), SEC Financial Discrimination (Available)
Article Branch: CryptoRevolver Strategy (Coming Dec 2021)