I am not a maximalist, but I am loyal to only two cryptocurrencies - Bitcoin and Ethereum. Every other crypto is a mercenary in my portfolio. We do not owe any allegiance to one another. At some point, I was loyal to Luna until Do Kwon happened. Solana has all the characteristics I am looking for, but the fact that it is not decentralized has made it fail my loyalty test. No matter how good the story looks, I will not pledge fealty to any crypto pledged to a centralized entity.

What this loyalty means is that I am interested in building up positions in only these two cryptos over the long term. This makes the way I run my crypto portfolio a little unique. As someone with vast experience in traditional finance and who got into crypto early, I see a lot of opportunities that sometimes look uninteresting from the untrained eye. This short article is an explainer of some of the strategies I deploy in running my crypto portfolio.

As of the time of writing this, there is an ongoing farming program on Binance for Ethena tokens. You can read more about it here: Introducing Ethena (ENA) on Binance Launchpool! Farm ENA by Staking BNB and FDUSD | Binance Support

Ethena is the governance token for USDe, a stablecoin. Its contemporaries are Maker and Frax Share. Before taking a bite at it, I ran a relative valuation analysis on Ethena. The summaries of the numbers are below:

• DAI stablecoin, issued by Maker, has a fully diluted market value (FDV) of $5.3 billion, and FRAX stablecoin, issued by Frax Share, has an FDV of $1.0 billion

• Maker has an FDV of $4 billion and Frax Share has an FDV of $760 million

• These two numbers mean that the market value of issuer to stablecoin ratio is 0.75 for Maker and 0.73 for Frax Share. It is not surprising that Frax Share has a lower ratio, given that it is a smaller entity. The markets are wise.

With these numbers, one can comfortable conclude that the market value of issuer to stablecoin ratio should be in the region of 0.75.

Now, let's take a look at USDe. USDe listed on Coinmarketcap on 20th of March 2024, just 11 days ago. This means that it is relatively new. However, they have gained a lot of traction within such a short period of time as the stablecoin in circulation is $1.5 billion, which is 50% higher than that of FRAX, which has been in circulation for almost three years. One can surmiss that USDe has some pretty big backers behind it. The question now is whether they will be able to grow quickly. The mechanics show that Ethena is providing a yield of 30%+ on their platform for USDe. That now throws up the question whether that is sustainable, given how UST, issued by Luna, imploded on our faces on the back of their high yields. Time will tell, but I hope they do not make the same mistake.

Based on the market value of USDe and the average issuer to stablecoin ratio of 0.74, one can arrive at a fair value of $0.08 per token for Ethena. They have maximum circulating supply of 15 billion tokens.

I am currently farming for the tokens on Binance Launchpool. If the price of the token, when it starts trading, falls below $0.06, I will buy more. But if it trades above $0.10, I will sell everything, but I will hold if the price falls between $0.06 - $0.08.

Next week, I will take a deeper dive into how I am farming the tokens by leveraging my portfolio, while remaining delta neutral.