The Alpha Wars: How DeFi Traders Can Copy Their Way to Millions

Key Takeaways

  • Public blockchains aim to incorporate a mix of transparency and privacy, though efforts to implement the latter are still a long way off.
  • A lack of on-chain privacy measures threatens the informational moat of DeFi’s biggest whales.
  • Tracking whales and mimicking their intricate trading strategies can be a source of alpha for savvy traders.
  • But this advantage will not last forever, as privacy on Ethereum is imminent.

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DeFi whales use their millions of dollars to amass more millions and move markets. Smaller traders with less capital and more patience can copy this success by tracking their every move and mimicking their strategies. 

Piggybacking off the fortune of insiders and whales has never been this easy. 

Public Blockchains, Privacy, and DeFi

Radical transparency is a hallmark of blockchain technology. Any time money moves, whether a million dollars or a penny, it’s publicly recorded and accessible to anyone.

The ability to publicly audit transactions and the state of an accounting ledger is integral to decentralized networks. But this is far from ideal for privacy-centric users.

Thus, ensuring a healthy balance between privacy and transparency has always been the goal of many crypto communities. Yet, leading networks like Bitcoin and Ethereum still lack meaningful privacy measures.

Despite this lack, however, very few users have made privacy a high priority for the industry. It’s still important, and resources are being allocated to build privacy-preserving tools.

But in the current bullish climate, privacy is more of a preference rather than a necessity.

Ethereum’s lack of privacy has more serious implications than most other public blockchains. This is due to the elaborate financial activity happening on the network.

Unlike Bitcoin, Ethereum’s usage isn’t restricted to a single base layer coin moving from address to address. There are thousands of applications and millions of tokens built on top of…

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