Form Systems Thinking for Crypto

September 1, 2022

A smart way to do crypto investing

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Making too many decisions in Crypto is exhausting.
Systems Thinking can help you with that!
Here's your playbook for creating Systems in Crypto:

This thread was inspired by @thedefiedge.
Check out his tweets to learn more about DeFi.
It's easy to set a goal.

like losing weight, Twitter growth, more income, etc.
Systems tell you how to make effort.
Having a good SYSTEM makes you the winner.

What are Systems?

Systems are a set of behaviors & habits that will nudge you towards your goal.
(if executed consistently)
It's like finding the right recipes for your goal.

Why Create Crypto Systems?

Designing systems is like creating investment software for your brain.
It's simplifies everything and gets rid of emotions and biases.
You're more objective about your decisions.

Here are 10 examples for Crypto:

1. When to Buy Crypto /w Fiat

Buy it like paying your bills, routinely and automatically.
Use your brainpower towards other things like research and living life.

2. Portfolio Allocation

Set a target for each section of your portfolio. If one area gets too overweight, then sell and adjust.
Here are some profile samples to check out:
https://twitter.com/thedefiedge/status/1500898115762544642

3. Profit-Taking Formulas

When do you choose to lock in profits?
Instead of timing or feelings, try following formulas.
Set clear conditions of buying and selling.
eg. If Coin increases by 50%, then pull 25%, keep 75%.

4. Claiming Earnings from Farms

Not all protocols have auto compounding.
How and when do you decide to claim your farms?
Schedule the claiming in your calendar.

5. Keeping Track of Everything

It's easy to get lost with so much data.• Create a Trading Log• Create a Spreadsheet with your cost basis
• Use @zapper_fi
• Figure out how to Track Tax Obligations• Follow an influencer? Track their "calls" to see their accuracy.

6. Investment Checklists

How are you evaluating a protocol?
Creating your own checklist will keep you honest.

7. Your Content Diet

Junk food is horrible for your body.
Have you thought about your mental diet? It's the information you're consuming every day.
Curate your content diet carefully: your Twitter feed, podcasts, newsletters, etc.
Get rid of the mental junk food.

8. Research System

Create a formal process for research:
• Read the white papers and official documentation
• Research the founding team & their accomplishments
• Do they have audits? With who?• Do a vibe check in the Discord
• etc.
Go through it EVERY SINGLE TIME.

9. Habit Formation

It's not enough to create the systems, you must create habits to do them!
• Create recurring tasks in your Calendar
• Set consistent times for certain behaviors.
• Make your checklists easily accessible
• Re-visit & improve when you have new learnings.

10. Systems Protect You

Even if you don't like taking profits, systems will tell you what to do.
It will protect you from crashing prices.
The Bigger Picture
Simple means LESS decision fatigue.
By systemizing the smaller decisions, you can use my energy towards bigger things that have more LEVERAGE.

Some indicators for you to set up the system

  • What's your decision-making process when investing?
  • When do you take profits?
  • If an investment sucks, when do you cut your losses?
  • How do your systems change when it's bull vs. bear market?
  • How do you keep track of everything?

Don't overcomplicate it.You can start with a Google spreadsheet and creative different tabs.These days I create checklists and tables inside of my @NotionHQ

Additional Info:

If you want to learn more about systems thinking, then check out these books.

Systems thinking doesn't come naturally for some people. But once you "get it", everything in life becomes easier.

Key takeaway:

  • Everything in life is a system.
  • Systems protect you from your emotions and cognitive biases.
  • Creating them and analyzing them over time will help you find weaknesses in your strategy.

Sources

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