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4/ Medium risk. An example of medium risk might be the 'Defi Barbell' - 50% $YFI and 50% $CRVBTC in Vaults. = High Yield, Low Gas, less volatility than active farming. Some ppl would view this as high risk but it's less risky than the degen bucket.
5/ Degen bucket = $Sushi, $Based, etc bags. Expect to lose it all or 10x+. So now lets test a few common market shifts:
a. Majors and Defi Dumps = Your stablecoins/cash hold up. Think about these at this time and the losses they prevented.
b.Majors pump and Defi Dumps = Degen bucket gets smashed. Barbell is held up by CRVBTC element.
c. Both pump = Possibly re-balance into more stables.
6/ You can include 'majors Flat/ defi Pumps' or other variations here but you get the idea. One of the best tricks is to think of your portfolio in % terms, which you can switch to on Delta or Blockfolio. That way you are constantly checking your max drawdown potential.
7/ There are still major tail risks with protocol failures and regulatory changes. One option is to buy disaster puts on the likes of @Deribit to hedge a BTC/ETH dump and yInsurance will also help with this for other tokens.
8/ I’m a second cycle investor and I’ve learnt this the hard way. Maybe you won’t have to. P.S. $YFI was in the degen bucket when I first bought it with unaudited code and I had done no research. Sometimes assets jump buckets :) Good luck.
