The Ups and Downs of ACT: Someone Earns $2 Million in a Week, Someone Else Gets Rekt the Day Before Joining Binance

24-11-14 14:36
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Source: Wu Shuo Blockchain


This podcast episode delves into the AI Memecoin investment craze and the recent surge of ACT. Guests defioasis, Cat Brother, and Chen Yi share their experiences and lessons learned from investing in cryptocurrencies like ACT. Defioasis, in just one week, earned a profit of 2 million RMB from establishing a position; Cat Brother, on the other hand, took profits before ACT was listed on Binance, thus missing out on a perfect opportunity for wealth creation. Additionally, this podcast includes a discussion on the market logic behind ACT's surge, analysis of community engagement, tokenomics, and how to assess the potential and risks of Memecoin projects. The guests also share their personal long-term bullish sentiment on ACT, bottom-buying strategies, experiences of exiting positions due to misjudgment on GOAT and ACT, and a deep insight into Memecoin investments from an on-chain data analysis perspective.


Disclaimer: The views of the interviewees do not represent the views of Wu Shuo. Wu Shuo does not endorse any products or tokens. Readers are advised to strictly comply with local laws and regulations. Investing is a personal decision of the interviewees and is not related to Wu Shuo's work.


Reasons for Buying ACT and the October Accumulation Process


Cat Brother: defioasis, who made 2 million, please introduce the entire ACT event.


defioasis: (The following is the content I posted on my personal Twitter) The recent surge of ACT was largely a stroke of luck and unexpected fortune for me personally. Until a little after 6 pm the day before yesterday, I was still placing orders on Bitget at 0.021-0.022 to get in on ACT, which was less than a week from my first ACT purchase on November 5. I had thought that ACT would take off due to the AI Meme narrative, but I didn't expect it to happen so quickly, welcoming the spot listing on Binance driven by ACT, along with the overall market surge. (Of course, Binance also listed PNUT at the same time, but that was completely out of my initial consideration)


Upon introspection and reflection, I tried to reconstruct why I bought ACT as much as possible.


Firstly, it was the recognition of the AI Meme narrative. The earliest and most significant AI Meme I believe this year were WLD and TURBO. TURBO, after launching on OKX, lingered around $3 million for a long time, providing ample entry opportunities, and eventually saw nearly a 300x increase in the secondary market. WLD, if I remember correctly, at one point had an FDV that surpassed the fourth-largest market cap, as part of the OpenAI meme narrative.


The logic of AI Meme is simple yet profound:


The mainstream AI is rapidly iterating and developing, riding the wave of technology and capital growth;


Meme is the hottest track within the circle. The hottest mainstream narrative combined with the hottest internal track has great potential. The narrative of AI Meme will continue to iterate along with the development of AI technology, with possibilities of lagging behind or being forward-looking. Furthermore, taking the example of TURBO, a good Meme will have enough time to layout and enter the market because the community also needs time to settle, aligning with my long-term logic of trading shitcoins.


Secondly, the opportunity presented by Binance's perpetual contract listing of the AI Meme leading GOAT. Honestly, I almost completely missed out on GOAT. However, the news of Binance listing the GOAT perpetual contract on October 24 made me refocus on AI Meme, as Binance fully has the capability to lead the track, and the logic of AI Meme is simple yet profound.


In the last two to three days of October and the first few days of November, I created a watchlist and added 7 tokens: ai16z, degenai, ACT, LUCE, BAN, Shoggoth, and CB. The main focus was on AI Meme, with a few other narratives added. Although there were 7 tokens, my top choices at the time were actually ai16z, ACT, or LUCE, followed by BAN. LUCE never actually reached the position I wanted, and I started paying attention to BAN a bit late, missing the opportunity. The commonality in choosing these narratives at that time was not only that they had clear and unique narratives but also that their market caps were in the 2-3k range, or I believed there was a chance of a pullback to the 2-3k range. ai16z had the narrative of an AI agent acting as a fund DAO and fund manager, with an a16z meme; ACT broke the AI agent black box; BAN was the Sotheby's banana; LUCE was the Pope's pet. An interesting side note is that ai16z, LUCE, and BAN were born almost simultaneously, and originally, the narratives of these tokens were intriguing enough to stir up user emotions. Each of them probably shouldn't have been at the market cap level they were at the time, but unfortunately, they all coincidentally launched at the same time.


I got into ai16z at $0.025. Initially, the priority of ai16z was higher for me than ACT, but later ai16z dropped below $0.01, experienced rapid rebounds with significant volatility, and with its small liquidity pool on Raydium and relatively few holders (about 4-5 thousand holders), eventually, I heavily chose the more stable and larger holder-scaled ACT.


Thirdly, after defining the market cap range and watchlist, the specific coin selection process must bring out insights from Murad's speeches.


I have watched some of Murad's speeches three or four times, and we even did a podcast episode with Murad on our side. There are several points I consider crucial, although I have added some of my own observations and understanding: retracement of 70%-80% in the $2-3 billion market cap range;


Having a large holder base; increasing number of holders;


A timeline where influential "big whales" engage in promotion, such as wizards


Especially the number of holders, I actually didn't quite understand this indicator before, and I believed it had a significant amount of false signals. However, it wasn't until late October when I saw Scopescan's data analysis: the signal of increasing holders has a 65% success rate in Memecoin, and for some tokens, this number even reaches 90%. It was also because of this indicator that I ultimately chose the latter in my heavy positions in ai16z and ACT.


Next, there are some bonus points. Whether Memecoin is listed on a second-tier exchange, such as ACT being listed on Bitget, while ai16z has not yet. Being listed on a second-tier exchange also implies the significant possibility of market makers entering, and market makers are crucial for Meme. As personnel move between first- and second-tier exchanges, their listing logic will have similarities.


Finally, seek an investment approach that aligns with Memecoin. My core investment philosophy is alpha in the fast lane, beta, be bullish, buy and hold, sell at the target, reduce the frequency of purchases. My friends who know me well know that my largest core positions are in ORDI and PENDLE Eco, which I have held since the second half of last year until now. And I have hardly made any major trades in the first half of this year. Of course, during this period, I have been playing with Memecoin with small amounts of money, but it has hardly made me any money; it's more about maintaining sensitivity to the race and narrative. It was also during this process that I gradually figured out my way of playing with Memecoin. Compared to the previous PvP phase, I will focus more on tokens in the $2-3 billion market cap range.


Of course, luck is still very important, and I never expected Binance to suddenly list it, although I was prepared to hold for months. But I believe that my experience is worth considering. A good Meme will have enough time to position, go through storms, the $2-3 billion market cap range is optimal for me, the number of holders continues to grow, buy with patience and hold. An interesting fact is that Murad is also not a PvP player. Although this logic has also caused me to miss out on coins that hardly experience significant retracements, such as GOAT, I should ultimately focus on what I am good at.


There is another detail. When Binance announced the price surge to 0.2-0.25, some members in the group asked if they could still chase it. At that time, I noticed there was about a 10% price difference between Bitget and on-chain prices. So, I boldly reassured the group members to enter with confidence, even if it meant buying at above 0.3. I also chased the price within that range myself, but deep down, I was quite anxious. Even though I had already achieved a 10x profit target, my style is indeed more about ambush rather than chasing a price surge. A few minutes later, I felt like I was experiencing FOMO, so I market sold most of the position I had bought during the chase. Looking back, although the logic behind chasing the price surge seemed reasonable and somewhat lucky in hindsight, I was actually very distressed during the subsequent price drop, which led to some very strange trading decisions. When operating in a way that is not my strong suit, emotions become difficult to control.


Chen Yiyi: Actually, I was also selecting a target for an AI Memecoin. At that time, the top choices were GOAT as the first choice and, based on core narratives, community, and trading activity, ACT as the second choice. However, there were some issues with the sentiment around ACT back then, mainly due to AMP's actions that had made the community unhappy. I remember Cat Brother bought ACT very early on and announced in the group that he had bought it, only to sell it at a higher price later. Afterward, I asked Cat Brother in the group how it went. He mentioned that there was a significant division in the ACT community, primarily dissatisfied with AMP's actions. At that time, I observed that despite the market's division, the hype remained high, and the fully diluted valuation (FDV) was not too high, so I thought the timing was still relatively appropriate.


In fact, at that time, the entire market's attention was focused on AI Memecoins. If ai16z had allocated funds to ACT, it might have been a good start. I entered the market when AMP announced a temporary pause on coin sales to the community, although AMP did not clearly specify how much they held or their future plans. So, in that rather chaotic stage, that's when I started accumulating a position. After they sold off, the community was relatively confused. Everyone was discussing whether the project team had completely sold off and if there would be continued development in the future. Throughout the process, I kept slowly accumulating, somewhat similar to the defioasis strategy, haha.


ACT Developer Sell-Off Sparks Community Trust Crisis and Reflections on Selling Off


Cat Brother: I happened to become the opposite, turning into a case study for reverse observation, haha. Chen Yiyi mentioned that when developers could not guarantee how much more they would sell, he started accumulating during that chaotic phase. On the contrary, I happened to initiate my first sell-off during that time.


Let me briefly share my recent experience participating in the Memecoin craze. I initially bought GOAT when its market capitalization was around two to three billion. Although not exactly low, after seeing some related reports, I found this meme quite fresh and much more interesting than the various "cat and dog" animal farm projects before. My way of choosing a meme coin was not based on on-chain data, which seemed easier to analyze, like wallet addresses and such. Although I used the data as a reference, I relied more on gut feeling when selecting Memecoins, similar to the judgment of "when the feeling is right" as mentioned by Chen Yiyi. When I looked at GOAT back then, I found its combination of "AI + Meme" quite appealing and hence decided to enter. However, after entering, its price started to decline. But as it dropped, I kept buying more, and eventually, it surged to six to seven billion. Later on, Binance even launched its contract for it. On the day of the contract launch, the price hit a peak of eight to nine billion.


For a meme to reach 890 million, I think breaking the 1 billion mark is probably a challenging level to surpass. As I was contemplating how to choose the next meme, I finally noticed ACT. In fact, the rise of the entire ACT community, in my opinion, was heavily influenced by the wizard role.


When I first learned about the ACT token, it seemed to be one of the two AI projects funded by a16z. After looking into it, I felt that the story was compelling, akin to a Dragon Ball Z series. At that time, comparing prices, ACT was around 0.03, while GOAT was around 0.07 to 0.08. Personally, I thought of GOAT as Dragon Ball Z's first series and ACT as the second series. Logically, ACT's market value should be at least 1/10 of GOAT's, but it had not reached that level yet. So, I started to continuously increase my position, buying more as it dipped. However, something absurd happened later on when the developer started selling tokens. The community tried to communicate with him, asking if he could hold off on selling and lock up the tokens to sell later, but we couldn't reach him. Later, he explained that he was attending his grandma's funeral, not a wedding, but a funeral.


This incident was truly absurd. The developer still insisted on selling. The community tried to persuade him not to sell, but he disagreed, even saying, "I have already sold 2%. Whether I will continue to sell depends on the community's response." People in the community, including some core members like wizards, found this matter very ridiculous. That night, I also felt it was too much, so I liquidated all my ACT holdings. Surprisingly, some people started buying in at rock-bottom prices after I exited my position. They looked at the on-chain data perspective and thought the project was still promising.


Later on, I couldn't resist and started to accumulate ACT again, re-entering the market. I remember my first re-entry was around October 23rd, with the market cap at approximately $30 million. At that time, I still believed in the project and bought some at around a $20 million market cap. By November 8, just three days ago, I suddenly felt that the AI and meme hype might be coming to an end and that a new trend in the VC space might be emerging. I decided to reallocate my funds, thinking the VC sector's new opportunities were on the horizon. Unexpectedly, Binance listed ACT today. So, even though I can be considered an early participant, instead of gaining, I ended up selling off my ACT holdings twice.


Logic Behind Holding ACT Long Term: Opportunity in Low Market Cap Memecoins


Cat Brother: I have another question for the two senior predecessors who have already made money. From my perspective, many Memecoins eventually die out, especially before ACT was listed on Binance. Why were you still brave enough to continuously increase your position and hold onto ACT?


defioasis: First of all, I have always paid close attention to Memecoins with a market cap of around two to three million dollars. I believe Memecoins in this market cap range are best suited for holding because if they can maintain this range for a significant period of time, it usually means relative safety.


Regarding the AMP incident mentioned by CatBro, I think the AMP sell-off event actually provided a good opportunity for ACT. At that time, I watched Murad's video where he mentioned a point that a good Memecoin, even after experiencing significant fluctuations like multiple 70-80% drops, can still survive. So why does it have such large fluctuations? Usually, it's because of a special event within the community. For ACT, the AMP sell-off event was a very unusual situation but also became an opportunity for the development of the ACT community. People like the Wizards organized and launched a counterattack on social media against AMP.


Moreover, when CatBro mentioned that the AI Memecoin trend might be coming to an end, I believe the opposite is true. It is precisely because of this difference in viewpoint that I still hold a positive view on ACT.


defioasis: My logic is this, Binance launched GOAT futures, and I believe Binance has the capability to open up a new trend. Additionally, I am very optimistic about the potential of AI in the crypto field, as AI technology has been continuously iterating and updating outside the circle. Just like the rally of Memecoins can continue, it's because other than Memecoins in this circle, there are basically no other money-making opportunities, so it won't easily fade away in the short term.


At the same time, the favor of outside-circle capital for AI, the investment in AI technology and capital, combined with the narrative of Memecoins in the circle, I think the combination of the two will bring about significant development space. Especially after Binance launched GOAT futures, I rekindled my interest in the AI Memecoin trend, thinking this is an important opportunity.


Community Activity and Chip Structure's Support for ACT


Chen Yiyi: I think some of CatBro's ideas are quite interesting; you can almost be considered a sample for study. I have always thought CatBro is truly the biggest Alpha of this round. Do you know? When the GOAT market cap was at 300 million to 350 million, CatBro asked me if he could buy. At that time, I said, it's only been out for a few days, there is a probability it could reach a 500 million fully diluted valuation on Bybit. If it gets listed on Binance, it might even rise to six to seven hundred million, around a billion level. The odds are quite average, there's only about a 50% upside, and a huge downside retracement might occur. At that time, the sub-category trend of AI MEME was not yet confirmed, and GOAT might also be a short-term speculation. Considering that GOAT had only just been released for a few days, I told CatBro that the odds were not very favorable and not highly recommended. But CatBro still bought it, and I think CatBro really has some vision.


MeowBro: Not only did I buy, but I kept buying the dip.


Chen YiYi: That's why I say MeowBro has something going on, haha. Actually, from my perspective, regarding the AI Meme topic, many friends are focusing on two main directions, one being AI and the other PayFi. In the AI field, AI agents are currently one of the hottest narratives, right? Many VCs and large institutions are involved in this field, with very high market attention, especially those within the community with influence are looking into this direction.


I believe the core of the narrative is very important, and now the top dogs have basically been confirmed, which are GOAT and ACT. From the community atmosphere, regardless of positive or negative discussions, the engagement is very high, and there are always people driving things forward. So, I think AI Memecoin is a very segmented and worth-noting track within the Meme sector, especially after new concepts like AI agents have emerged, everyone is eager to hype up such novelties.


Additionally, one point I have been consistently monitoring is the tokenomics structure. When it comes to tokenomics, I don't just rely on the on-chain address data of Solana since that data can be easily manipulated. Many exchanges, before listing a project, look at the project's decentralization and token distribution. If a project has a high concentration of tokens, experiences a one-sided surge or decline, exchanges generally do not accept it because they prefer relatively distributed tokens to avoid the project team easily manipulating the market.


Therefore, I am very attentive to the selling data of AMP and the situation of related addresses, including some of the subsequent entry funds. I admit there is indeed some speculation in between, but overall, I consider AI Meme to be a segmented and promising track, worth prioritizing attention and selecting targets from.


There's also a very interesting point, which is the CultDAO project we mentioned before. I believe that fund can be used to drive some small projects, and if ai16z invests in ACT, that would be a very nice trigger point.


defioasis: Yes, let me add a bit more. I forgot to mention the growth in the number of holders. I used to think that the growth in the number of holders was not very relevant because this can be manipulated by creating numerous low-value addresses to inflate the count. But later on, as Murad mentioned, for Memecoins, the number of holders needs to be in a state of continuous growth to have a higher likelihood.


Actually, when I looked at ACT's position in AI Memecoin at that time, the first thing I noticed was its relatively large number of holding addresses. Another point is that after the AMP incident, ACT's number of holding addresses kept growing. So, from this perspective, I think it reflects the community's activity, indicating that the community is driving and exerting efforts, which can also be seen from the growth in the number of holders.


Maodi: Oh, it seems like you both have a consensus that ACT could indeed be considered the "second dragon" before being listed on Binance Spot. However, the reason I sold my position at that time may have caused some disagreement. I also looked at some on-chain data back then and found that not only GOAT and ACT were growing, but also other projects like Octopus, GNON, and others. Seeing the growth of on-chain addresses and the community's sentiment, I don't think ACT can necessarily be considered the "second dragon," as there are many competitors with similar market capitalization and address numbers.


Chen YiYi: Do you know about ACT's connection to a16z?


Maodi: Yes, from the current perspective, that is indeed the case. You mentioned earlier that defioasis also bought into this ai16z project. During that time, there were indeed many AI Meme projects, including ai16z. So, do you think it really has any relation to a16z? Looking at this now as a reason for being the "second dragon," it doesn't seem to have strong grounds. How do you view this situation?


Maodi: The reason I sold my position at that time was that I didn't think ACT was necessarily the so-called "second dragon." It had many competitors at the time, and I couldn't determine who the second dragon was, so I simply gave up. I even considered waiting for the GOAT price to drop before buying again because at that time, GOAT as the first dragon seemed more certain. Looking back now, it may be because of the a16z background that everyone had the impression of the second dragon. How significant do you think a16z's role was in the development of AI Meme?


Chen YiYi: I think this is because Marc has always been touting GOAT, and this kind of association is very clear, so the relationship between GOAT and a16z is relatively close.


Maodi: But he didn't tout ACT.


Chen YiYi: Indeed, he didn't tout ACT, but they did invest in ACT.


Maodi: Right, in that case, a16z did spark a lot of discussion and emotions within the community at the supply level.


Defioasis: This is a consideration of multiple factors. Firstly, investments from entities like a16z are only in two or three AI projects, and there are only two projects directly related to ACT. Furthermore, given the growth in the number of holders, I believe the first thing to focus on is the size of the holders. In the AI Memecoin race, the scale of ACT's holders is its base, and the scale itself is relatively large.


CatBro: I remember there were roughly over ten thousand holders.


defioasis: Yes, the number of ACT holders is still growing. In comparison, I have looked into some other AI Memecoin projects, such as Shoggoth's project, and its holder base is significantly smaller than ACT's. Additionally, other AI meme projects have not received investment support like a16z. Look at ai16z, why is it named this way and not something else? It's because this track carries the background support of a16z, which is also a kind of meme.


CatBro: From another perspective, why not call ai16z "Dragon II"? How should this question be understood?


defioasis: Actually, I'm not fixated on the term Dragon II, but I can explain. As I mentioned earlier, why between ai16z and ACT, I chose the latter. I also bought ai16z, at a price of 0.025 at the time, but its volatility is very high, going from 0.025 to 0.03, then dropping to 0.01 or even lower, and then quickly rebounding. In contrast, ACT's volatility is lower and more stable. The pool size of the ai16z project is smaller, so its volatility is also greater, which is one of the roots of the volatility.


Additionally, looking at the number of holders, in projects in the range of two to three million dollars, ai16z has a lower number of holders, only about four to five thousand, while ACT's number of holders is at least two to three times that. This is one of the reasons why I decided to hold more ACT.


Chen Yiyi: After the AMP liquidation, the community posted a chart showing the change in the number of holders, comparing ACT's coin holders with the changes in other popular projects at the time, which actually reflects the community's responsiveness and energy.


CatBro: Yes, I saw that too. That chart is indeed a good reference.


Chen Yiyi: After the AMP liquidation, the community quickly responded and swiftly turned the situation around in the crisis. The price at the time experienced a short-term on-chain drop of over 30%, but the community quickly stabilized the situation by horizontally comparing the ACT Holder trend with other popular projects like BAN, effectively turning the AMP sell-off into a certain degree of positive news to weaken the panic and consensus dispersion caused by the ACT price drop. This shows that the community truly has the ability and strength to get things done.


defioasis: Well, this also aligns well with Murad's view. A good Memecoin, even after experiencing a 70-80% drop, can still recover. ACT is a great example, illustrating the project's resilience.


猫弟: I completely agree.


ACT's Market Positioning as "Dragon II" and Controversy


陈一一: You mentioned projects like Octopus or GNON, which are frequently heard in the community, but mainly it's the voices of ACT and GOAT. So, I think these are the true leaders.


猫弟: Indeed, but I also fall into a kind of "information cocoon" suspicion. Because when I held ACT at that time, I would search for content related to it on Twitter, and the algorithm would push a lot of ACT information to me. I think this is an effect of an information cocoon. If I hold other tokens and search for related content, the algorithm might also push positive information about that token to me. So sometimes, data growth and community unity do not necessarily mean success. I can give a counterexample, such as the ARC-20 or Atomicals projects. Not all projects with increasing community hype and address counts will achieve good results.


陈一一: Yes, purely looking at some surface data may indeed lead to bias. To be more accurate, you still need to dive into the community, understand what they are actually doing, even keep close contact with the project's core builders or pay attention to what they are working on.


Actually, before ACT was listed on Binance, many people were still in a wait-and-see state and did not deeply understand the community's progress. And now, ACT has skyrocketed 20 times, you could say it has gone mainstream. Yesterday, I was complaining to a friend that the whole market was going up, but ACT was going down... 猫弟: I was glad I sold at that time.


陈一一: Indeed, some things can only be judged by a vague feeling. You know they are working, you see the on-chain data reflecting the project improving, but the consensus of funds is not as strong as in larger conspiracy group projects. I think that by looking at the core builders, observing their problem-solving or resource-pulling abilities, you can better assess a project. Just like PEPE and PEPE 2.0, I still remember when PEPE 2.0 was hosting a Space, there were thousands of listeners, and many were urging to create the PEPE 2.0 dashboard.


At that time, I felt that the market had a demand for projects with a new narrative. Projects like GOAT did not catch up in price, and people were looking forward to the next GOAT 2.0. In this situation, a project like ACT, with a16z endorsement and a narrative similar to GOAT, became very attractive, especially considering its lower market value. There is also a group of capable community members driving the project, along with the potential funding from a16z. I believe that ACT has a good position in the market.


defioasis: Overall, that's how I see it.


CatBro: You mentioned PEPE 2.0 earlier. Do you think ACT's future price action will follow a trend similar to PEPE 2.0?


Chen YiYi: I think since Binance has already listed ACT, it has basically followed that trend, and many people have already made money.


CatBro: Do you think there is room for ACT to reach a market cap of sixty to seventy billion in the future, or will it take time?


Chen YiYi: It will definitely take time and require a significant amount of turnover. In the short term, I think that on some mainstream exchanges, there may still be some room for growth, but how should I put it, at the very least, it could challenge GOAT's previous all-time high.


defioasis: Yes, let's observe first. I think it might be a bit early to compare it to PEPE. It might be better to benchmark against Neiro first. Looking at this wave, PEPE and Neiro are representative, and Neiro currently only has a market cap of 10 billion. In comparison, I feel that ACT's price may already be somewhat high in the short term.


CatBro: In the short term, the price does seem a bit high, even though it's only around a 5 billion market cap.


defioasis: Yes, I added to my position at 0.25. I was indeed a bit hesitant. When I checked on-chain data, I found a 10% price difference between exchanges and on-chain, so I didn't think it was a big issue. Even if I took a 15% hit, I thought it would be okay. However, after buying, I sold most of it again. I initially invested 100,000 U, but I felt the position was a bit too heavy, so I quickly sold off 70,000 U, which made me feel more at ease.


CatBro: I understand. I also want to share the reason why I decided to cut my losses for the second time. Although Chen YiYi recommended holding ACT to me, and I knew that the resurrection of a Memecoin like this is rare, indicating good project quality. The reason I decided to cut my losses was that my position was too heavy, and the risk was too great for me.


defioasis: Yes, sometimes having an over-weighted position can indeed make people uneasy.


陈一一: That's right.


猫弟: From a probability perspective, in projects with a market cap of one to two million, only a few will eventually succeed. Probability-wise, a few projects out of ten may also disappear. I invested in several projects on Solana back then. If all of those failed, the losses would be significant. Besides, I'm not considered wealthy, so I chose to cut my losses in the end, haha. It's really hard to hold on in such situations.


defioasis: This indeed also involves a matter of faith. The information cocoon effect you mentioned is actually because you constantly search for related content, and the algorithm keeps pushing related information to you. Why do you keep searching for it? It's actually because you have doubts about the project, you want to track the updates in real-time, and you need someone to be there making calls, which shows that you still have some uncertainties within.


猫弟: Yes, I do have some lack of firmness.


defioasis: This indicates that there is still some uncertainty within. My personal strategy is to hold firmly after buying in. Of course, I didn't expect ACT to rise 10 times so quickly, even 20 times. Even if it didn't rise that much, I would still be willing to hold for three to four months because I believe in its potential.


陈一一: I want to counter that. I'm not countering this point, but saying that you might not have such a heavy position. Look, defioasis added 100,000 U yesterday to chase the price up, then felt that the addition was a bit too much, so sold 70,000, keeping 30,000; 猫弟 cut his losses and liquidated after heavily investing. What I want to say is that having too heavy a position can distort your actions.


猫弟: Yes, ACT is undoubtedly a unique case.


defioasis: Although I did have some profits before, I still hesitate when it comes to adding more to my position.


The High-Risk Nature of Memecoins and Target Selection Strategy


猫弟: Actually, this time I invited you not to promote ACT but to make everyone aware of the high risk of Memecoins. My case of ACT rising 20 times but cutting losses and ending up in a loss precisely illustrates the investment risk of Memecoins. Especially in the AI Meme track, the PVP situation is severe, where a project could double in value one moment and return to zero the next. Such a situation is quite common. So, if you're looking for the next project similar to ACT, from what perspectives would you choose a target? Let defioasis share first.


defioasis: First of all, I would still start by selecting projects with a market cap of 2 to 30 million US dollars, based on several criteria. First, if a project has experienced a significant surge followed by a 70% to 80% drop but can still survive, maintaining its market cap in the 2 to 30 million range and oscillating for a period of time, such a project is relatively robust. Second, it is also important to pay attention to the exchanges' movements. For example, the reason why I am revisiting the AI Memecoin track is because I saw Binance listing GOAT futures. I believe Binance has the ability to lead a new track, so I will focus on its choices.


In addition, when second-tier exchanges list similar Memecoin projects, this is also an important signal. Second-tier exchanges can provide a good exposure platform for projects, and there is close personnel mobility between second-tier and first-tier exchanges in terms of listing. It is possible that someone has spent some time on a second-tier exchange and then jumps to a first-tier exchange, so the experience accumulated in the second tier will also be brought to the first tier. Lastly, it is necessary to look at the trend of the track itself, with the AI field currently being the hottest.


I believe that AI is a sunrise industry, currently in a stage of continuous development and iteration. Memecoin projects related to AI have also gone through several waves of development, starting with the Worldcoin around OpenAI, then the Turbo project sparked by GPT-4, and later more AI agent trends emerged. These projects continue to evolve, reflecting the industry's rapid iterations. So, this is my main approach to project selection.


陈一一: Haha, defioasis shared his coin selection experience and views on the future development of the AI Memecoin track, which is also great. But back to Maodi's question itself, actually, I often joke with him, saying that good things are easily recognizable by everyone at first sight. For example, seeing a beautiful girl on the street, if all three of us think she’s pretty, then she is probably truly beautiful; but if only two of us think she's pretty and defioasis doesn’t, then there may be a difference of opinion, haha.


Actually, this is a real-life issue. When a project narrative comes out, how does everyone react initially? For example, in the past, everyone might have thought that BAN—"Banana" had a very good project narrative.


陈一一: Going back to the main topic, I personally think that, as you said, having a "feeling" is essential, or rather, through observing many Meme projects, having a general understanding of the narrative trend. In fact, Meme projects are divided into many tracks, such as the zoo series, mascots, artworks, and now the AI Meme, all of which are different subfields. In these subfields, finding a leading project is the first step, that is, finding a project with a strong narrative. The second point is to understand some key nodes of traffic distribution, which I think is very important.


Why Does Everyone Want to Build Relationships with KOLs? Participating in offline meetings, social interactions, the purpose is actually to connect with these influential individuals, because traffic is often distributed from them. Every community and coin holder is influenced by these influencers. For example, many people today pay attention to Formula news, prepare to snipe Binance announcements, because of the importance of these traffic distribution nodes. Just like a Formula announcement, buying in two seconds made a few hundred million US dollars in profit, today my friend operated next to me, bought in four or five seconds after the news came out, and doubled the money.


Therefore, to obtain these traffic distribution resources, you need to get closer to the community and influential KOLs.


Of course, like defioasis, seeing the price pull back but the project is still alive, choosing to get involved in the second wave is also a good logic, provided that you are sure that this project has potential in the field, even if the first wave of people exit, new players will still be interested in its narrative. For these new early-stage projects, I personally choose projects with a market value of around 3 million FDV, sell after one wave of rise. If you want to select some more certain targets, time and energy may not be enough to focus on all early projects, so pick projects with FDV in the range of 10 to 20 million like defioasis, buy gradually at the time of warehousing rather than all at once.


I generally try to avoid chasing highs. Opportunities are always available in the market, projects like GOAT, BAN, LUCE, ACT keep appearing. For example, there were Moondeng and NEIRO before, basically new projects come out every few days. The current market as a whole is rising, which raises a question: Is there really enough money in the market to support the growth of these projects?


Also, there are still many small market cap projects in the market, such as projects with a market value of around 20 million, everyone can pay more attention to them, the community may also time Binance's listing of small caps Nerio and ACT, and speculate on Binance's recent listing strategy, may create wealth effect through projects in this valuation range.


defioasis: This is also why I think Memecoins with a market cap of two to three million are especially promising. Projects that have experienced multiple large declines and can still survive may have more room for hype in the future, and exchanges usually favor projects that have experienced multiple chip turnovers.


Cat Brother: Alright, that's it for this episode of the podcast. So, in conclusion, let me remind everyone again that the content shared today does not constitute investment advice. This episode of the podcast is mainly because ACT suddenly saw a huge increase, reaching 20 times, so we did a relaxed sharing, purely based on personal experience. Everyone still needs to invest cautiously, especially in participating in high-risk tracks like Memecoins. Thank you for listening.


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