Source: Web3 101 Podcast
Original Transcript: DeepTech TechFlow

Air Date: May 24, 2025

Hosts:

· Liu Feng, BODL Ventures Partner, Former ChainNews Editor-in-Chief

· Xiong Haojun Jack, Rhythm BlockBeats Deputy Editor, Host of "Web3 Untold"

Guest:

· Pima, Continue Capital Co-Founder

Cosmos Meme Reflection: Liquidity's Siphon Effect and Matthew Effect

Liu Feng: As an OG, you have had remarkable achievements in the public chain and DeFi fields. However, in today's crypto investment world, OG feels like a derogatory term. The most impressive story now is about a Junior P transforming into a Marshal P. How do you view this trend?

Pima: I consider myself a relatively experienced participant in Memecoins. On one hand, during this cycle, I have been more involved in Solana. I participated in all Memecoins on Solana, including early ones like BONK, WIF, BOME, POP CAT, and later ones like GOAT, as well as numerous projects that went through natural selection. At that time, we naively thought that if Solana's Memecoins experienced a resurgence, other public chains would also see a similar resurgence. So, after positioning in BONK on Solana, I sought similar Memecoins in ecosystems like Cosmos and Avalanche to invest. At that time, this seemed like a seamless logic to me.

However, I overlooked the liquidity siphon effect and the Matthew effect. The cycle essentially ended after the first wave of participation. You may think there will be a second wave or a third wave, but in reality, during an early rebound phase, it has already fulfilled its historical mission. The remaining mainstream attention and funds will flow back to the on-chain ecosystems dominated by Solana at that time. I previously shared that Memecoins typically represent 1% to 3% of the public chain's market value, and in extreme cases, it could reach 5%. I conducted many observations and statistics back then and concluded that the top Memecoins usually hold 1% to 5% of the public chain's market value within a certain timeframe, with a few exceptional cases excluded like DOGE and SHIB.

Later, as the crypto industry developed, you would notice that Solana didn't fit into this system at all. It saw a surge of Memecoins one after another, presenting a completely different atmosphere from other ecosystems. It was entirely driven by Solana's retail investors. Solana is a market core made up of retail investors, leading to the birth of various emotionally driven, volatile, and highly market-oriented tracks and niches within the Solana ecosystem. I, on one hand, observed the entire Solana ecosystem, and on the other hand, for Memecoins – a niche path that already had liquidity, participation, a broad user base, and was relatively non-mainstream – I was willing to actively engage.

How to Make Money in the Memecoin Behavioral Finance Feast?

Liu Feng: If you want to invest in Memecoin, how can you make money? This is a very blunt question.

Pi Ma: I basically have 90% of Memecoin on Solana, maybe even more, and I don't pay attention to any other coins on any other chains. This market has evolved to give you an optimal solution, and you are just looking for a second choice on this optimal solution.

The core reason for looking for a second choice is that you did not get a certain result on the optimal solution, or in other words, you did not participate; you are just looking for that catch-up rise, which can easily trap you into an investment trap. You will find that once you get in, it either doesn't rise or it torments you between rises and falls. Another core issue is that it is difficult to cash out; you will find that when the Solana leading Meme coin retraces 30%, your 200% profit is gone, and the retracement is very quick. So in any investment system, I basically don't chase the ultimate cash-out. I personally think that trying to avoid the first cut in the market from bull to bear is a very difficult thing. Crypto is 24/7, and you cannot watch all market fluctuations in real time, which means unrealized gains are easy, but cashing out is hard. The role of the leader is that it can give you a second chance to catch a higher point, to give you an attempt to realize profits, so basically just focus on the leader.

Secondly, I think when everyone is investing in Memecoin, many people often focus on quick short-term gains. In fact, from my personal experience of achieving significant results, quick short-term gains may not be suitable for medium to large investors, unless your volume is very small. Participants in quick short-term gains are often only attracted by short-term attention and do not consider the core operational logic of Memecoin. Divide Memecoin into x and y axes, with x-axis as time and y-axis as market value. You will find that the market value of the vast majority of Memecoins is directly proportional to time. Time is a very important concept, and apart from very few cases such as BOME and TRUMP, all existing Memecoins with a market cap of over $1 billion have been running for at least six months. Without the factor of time, many assumptions are invalid.

I think Memecoin is often a feast of behavioral finance. One of the founding fathers of behavioral finance is Richard Thaler, also a Nobel laureate. He divided the original investment system into two types: a saving account and an entertainment account. Memecoin, as a whole, has a strong entertainment account property and function. Daniel Kahneman previously wrote a very famous reflection; he basically divided people into two systems: System 1 requires thinking, focuses on logic, is rational, and requires a lot of energy to consume; System 2 is simple, direct, quick, and does not require much energy to consume. Reflected in the Crypto field, Memecoin is perfectly compatible with System 2, fast, effective, highly volatile, satisfying some of our emotional FOMO and capitalization operations.

In the first two weeks, I came across a paper stating that a person's investment decision-making process may not exceed 6 minutes, and now in the Memecoin space, it may even be 6 seconds. This is very similar to many of our investment decisions. In fact, many of my investment decisions are very impulsive. Of course, my impulsiveness is because I have already carefully arranged my fundamental Beta or savings account, which allows me to have a significant amount of time and energy to explore more possibilities in the Alpha market. A significant challenge that behavioral finance poses to traditional finance is that everyone is irrational. What you perceive as rationality is only living within your own information bubble. People live in a sea of immense noise, and most people lack the ability to discern this noise.

Overall, I believe Memecoin represents a significant development in behavioral finance. If we were to further develop theories related to behavioral finance in the future, we could actually use some of Memecoin's data as research samples.

Three Questions to the Soul: Are you daring enough to buy? If you buy, are you daring enough to go all in? Can you hold on during a dip?

Liu Feng: In the past few cycles, we have learned from your meticulously crafted investment logic. Today, we may only look at volatility, only consider whether the social consensus around a Meme can quickly attract liquidity. Do you think this situation can continue?

Pi Ma: The reason why many investments are difficult is that the times are changing. The structure of investors, the age range of investments, and the income levels of investors are all changing.

First, let me present my conclusion: Memecoin will definitely continue to develop, not only in the crypto space. In my system, the Crypto field is not a standalone market; it is entirely related and synchronized with world development. Those who have missed out on the dividends of the times, those who are unemployed in large numbers, those who have been eliminated by globalization, and those whose class has ossified and have no direction or investment opportunities, all of them adopt a kind of rebellious psychology, refusing to give a large number of votes to those elite personas, whether it's the U.S. tariff issue, the rise of new nationalism in Europe, or the rise of conservatism in Australia, there is a global wave of new nationalism. This trend in real life is condensed into slogans like "All in" and others, and such trends are not only present in the Crypto field but are global.

I believe that the rise of nationalism has injected a great deal of power into the Memecoin market and other niche markets and speculative markets. This force, along with the development of AI and peer-to-peer internet information technology, will have a significant impact on traditional financial markets. You pay attention to P Junior because he brings in a large amount of chips and results. This is the most impactful, propagative, and attention-grabbing. I personally avoid sharing practical charts, but many other Twitter users, on the contrary, will use it to gain significant exposure. On the other hand, we now emphasize information equality. Human attention is very limited. When a significant amount of your attention goes to P Junior, you will certainly not deeply research the theoretical system. The core issue returns to the same three questions: Are you daring enough to buy? If you buy, are you daring enough to go all in? Can you hold when it dips heavily?

Many times, you only get the result, but not the decision-making thought process behind the result. So, even if you know the result, you still won't buy, dare to buy, hold a substantial position, or hold onto it.

With the advent of a lonely society, for niche tracks, selling demand is more attractive than selling products. In the Crypto field, what is demand? It is psychological identity. Users holding Memecoins form a small group and community, creating a strong sense of psychological identity. This extremely identified community will only self-reinforce. Unfortunately, over 100 million Memecoins have already been pumped, yet only a few have survived. This state of excessive participation and lack of results leads to a very contrary situation: seeing others achieve good results will cause significant stimulation to oneself, leading to working harder, making further mistakes in choices, affecting mindset further, unable to focus on analysis and summary, resulting in poor outcomes. It is a very vicious cycle.

Memecoin is a very interesting social phenomenon, but fewer and fewer people are observing it.

Focus More on Meme Infrastructure: Which LaunchPads Are Worth Researching?

Jack: Even if many Memes flip 100 times, it may not bring particularly significant results. So what is your purpose in frequently participating in small and medium-sized Memes?

Horse: This is a measure of market participation temperature; I need to participate in the market with the most liquidity and the most retail investors. When I discuss Memecoins, I am not saying that Memecoins can bring me any particular results. For our investment, I might be more concerned about the Memecoin infrastructure, such as DEX, LaunchPads, etc. These are two completely different systems; you can understand them as left-hand Beta, and right-hand Alpha. For me, after my Beta work is very solid, I allocate some time and energy to investing in the Memecoin market to sense market trends.

One of the best things in the Crypto field is that you can feel the flow of global capital markets through very subtle observations. All Memecoins have gone to zero, so there is no significant loss for us. But every Memecoin rally is mapped and related to other investment markets; however, most people don’t notice this. We need to consider the global capital allocation. These assets only serve my core Beta choices, so participation in Memecoins is just to confirm some logic and allow us to evaluate the core targets of Beta more reasonably.

Liufeng: I actually understand your logic. Previously, you shared the Meme investment logic, why you only want to truly profit from high market cap Memes? This is related to your scale, and it is completely different from the logic of many people who want to change their destiny through Meme investment. Perhaps retail investors only talk about Alpha, but for you, Beta is more important. This era is actually the era of Memecoins, and Meme has become the voice of the era. We should not deny it but accept it. So, in this case, we can look at Beta and explore the operational launch platforms that have gone through several generations of evolution. Can you introduce which launch platforms you find appealing and worth researching?

Pima: The most eye-catching one is still Pump.fun (referred to as Pump). In fact, they have not brought much innovation, but the most core business model in Crypto is transaction fees. How much market share you can occupy from this business model, you will have that much cash flow, and I can give you that much valuation. Pump meets the needs of asset issuance. This product integrates into the huge demand for Memecoins. The two sides will hit it off, with an infinite supply and an endless pursuit of retail investors for ultra-high multiples. Therefore, you will see asset issuance platforms spring up like mushrooms after rain.

Consumer retail investors in the Crypto field are a highly financialized group of people with a high risk appetite. They have a high sense of risk and a strong urge to gamble, and you need to design products based on this urge. Where do retail investors spend money? Only on transaction fees; they would rather pay you more fees than miss out on a Memecoin. They are not fools. Why do they pay such high MEV priority fees? Because they believe the returns can cover the costs.

Our positioning of Crypto retail investors is a group of extremely financialized individuals. We launch all products around their needs. This is one of the key factors for Pump.fun's success, including later launching Virtuals for AI, which is also a Launchpad. Both equally meet the strong demand for asset issuance. Therefore, observing such launch platforms is a very good investment target. Memecoins may die a thousand or ten thousand times, but there will always be a new wave of Memecoins rising. However, a good launch platform can solidify your funds, generate profits, truly enable you to "lazy win," and capture the maximum value in capturing the entire Memecoin trend or movement.

Launch Platforms and Public Chains: Attracting Developers is Key

Jack: For example, now that Virtuals has arrived on Solana, do you think it's too late? Is there only one opportunity?

Mima: For all launch platforms, you need to understand their supply and demand dynamics. Who serves as the supply side for the launch platform? This is a very important factor. The supply side of Pump is largely anonymous, while Virtuals has a certain level of selectivity but is also anonymous. Therefore, when evaluating the quality of any launch platform, you should closely monitor its revenue. In my assessment system, launch platforms are identical to DEXs. In another sense, launch platforms are somewhat similar to public chains, but people have not elevated the two to the same level.

As a launch platform, the core competency lies in how to attract developers, which follows the same logic as public chains. Why would developers choose A over B? This is a matter worthy of deep consideration and is the most important question determining the future direction of launch platforms and public chains. Since the service experience end is largely occupied by retail investors, we usually consider launch platforms, including public chains, to be a B2C market. However, in my view, they are a B2B market. Without good assets and developers entering, your public chain/launch platform will never take off.

For public chains and launch platforms, the most crucial aspect is future cash flow income, which relies on continuous transaction volume. Transaction volume depends on a diverse range of assets. Therefore, attracting excellent developers to your launch platform is paramount. Winning over retail investors is actually quite easy as long as you have good assets; retail investors will flock in. Of course, whether in public chains or launch platforms, marketing strategies and tactics are often put to the test. But without the injection of high-quality assets, it is difficult for launch platforms or public chains to thrive in the long term.

Believe’s Unique Market Positioning

Mima: I believe Believe has employed the right market entry strategy. APP developers have a significant need for funding, but they almost never receive it. Believe's supply side consists of independent developers who develop a large number of apps each year, hoping to achieve positive cash flow from their apps but lacking suitable channels for monetization and funding. If the market is niche, it is impossible to achieve a market capitalization of billions or hundreds of billions.

Believe focuses on this group of independent developers or those who want to try new areas and directions. Crypto retail investors have a very high risk tolerance and awareness, and, most importantly, very low market capitalization, which has long realized the potential for hundreds or thousands of times of growth. Believe directly borrows some experiences from other launch platforms, namely sharing costs with these developers, which is very good. It has achieved positive cash flow for independent developers in the cold start phase. In traditional fields, creating an app requires a large amount of work including development and marketing, but in the crypto world, creating a product is the only requirement. The success of this product is not important, but once it is launched successfully, it can receive hundreds of thousands of dollars in cash flow within a week. This is a substantial income for independent developers, allowing them to continue refining the product, expanding the market, and serving users once they have this positive cash flow.

This actually explains why this model is called the Internet Capital Market. It meets the strong demand of a large number of small developers and micro-enterprises for financing, unleashing the supply side. What's also very much in line with the trend is that with the arrival of AI, a lone independent developer can achieve very good annualized revenue, and your marketing can rely entirely on TikTok and Twitter for viral spread. But do you think it's possible for a very large and very good enterprise to emerge on the Believe platform? I actually don't have confidence in this. I take a wait-and-see attitude on this, but what I firmly believe is that Believe has very effectively addressed the niche market. This niche market serves a small scale, caters to a specific group of people, and serves a very targeted customer base. They make money from this segment, meaning they don't need to go big, but they have their market.

Another impressive aspect of Believe for me is their meticulous planning and packaging. Their page design is quite elaborate, and they also focus on launching some projects and activities. They try to tell a story. In addition to the crypto field, they can also connect with niche audiences in other markets. These traditional internet developers are not familiar with crypto. This process will surely be like the first wave of the AI hype, where I personally think thousands of such projects will die off. This is a process of familiarity and adaptation. We will observe slowly.

LF: You highly appreciate Believe's logic and its positioning, which is more like a practical application launch platform. Now all launch assets are being meme-ified, and Believe may see the emergence of a batch of usable applications.

MM: Hopefully, haha.

Update: Prior to the release of this podcast episode, the Believe team announced the suspension of Launchcoin's automatic coin issuance feature, to be replaced by manual review and the addition of a verified tag. Once again, we ask for MM's comment on this change. MM's view is: "Generally, an approval system is quite silly; permissionless is the way to go." Evidently, he does not like this change.

LF: Recently, we have also looked at some of the applications emerging on Believe, or some assets being launched. I have a list in my hands, probably around fifty or sixty. I'm also thinking that if it's just about memefication, it's actually already too abstract. But if real applications emerge, this might turn into something different. Including Dingaling's launch platform being promoted, its strength lies in the unique token design. However, with just the token design, I think it's difficult to carve out its own space in the market because Virtuals' token design is already quite extreme.

Meme: The key here is to have someone to lure developers to your launchpad, which is crucial.

Trading Volume: The Sole Evaluation Criterion for Launchpads

Meme: The sole criterion for evaluating a Launchpad is trading volume, as trading volume represents core revenue. If you don't understand this underlying logic, you won't invest when it pumps. Now that you see the results, Pump has already earned $700 million. So, what is a reasonable valuation for Pump? Based on normal logic, a 20x PE valuation of $14 billion is reasonable. Considering the high volatility and the short-lived nature of Memecoins, a valuation of $7 billion at a 10x PE ratio is also acceptable. Even a $35 billion valuation at a 5x PE ratio is possible. The core issue here is:

What are you really investing in? You are investing in a discounted cash flow of the future. So when you consider a Launchpad, it's not about whether the platform is currently at $1 billion, $2 billion, or $10 billion, but rather, whether the platform's revenue can continue to expand sustainably. This is actually entirely applicable to stock market investment logic.

Crypto AI: Outcome-Oriented Investment

Liu Feng: I must disclose here, you invested in Believe, right?

Meme: Yes.

Liu Feng: This disclosure of information is quite important. The audience can also feel that you, Meme, have invested in this project, so you hold this project in high regard. So, from an investment perspective, I think everyone should do their own research and be responsible for their decisions. Apart from Memes, do you also look at AI Agents?

Meme: Now, the entire AI track is basically outcome-oriented, meaning investment return-oriented. In the Crypto AI field, we believe that all these investments in the infrastructure field seem to be repeatedly borrowing AI technology from the internet field. So we don't think it has a very strong moat or any unique features. Therefore, we mostly focus on outcomes, meaning whether you can help me trade or increase my revenue. The integration of AI with social media may have a more profitable breakthrough point.

Liufeng: It sounds like you are not very confident in Crypto AI or an AI agent for Crypto?

Pima: On the one hand, I think many of their core technologies basically come from the traditional Internet field, and on the other hand, they need to find their own business models. Pump, as a representative of the application side, is a very important one. We tend to look at more application-side ecosystems. In the application-side ecosystem, first of all, I need to know where the paying user base is. Apart from asset issuance and trading, many application-side projects have not ultimately succeeded because they couldn't achieve positive cash flow. For example, in games, can you tell me a game that has achieved stable annual revenues of 300 million or 500 million USD? There isn't one.

Liufeng: In the real-world gaming industry, this is definitely possible, but in Crypto, it seems that such revenue can only be obtained through coin sales.

Pima: Yes, because of the uniqueness of Crypto users, for Crypto games, players will feel like you're asking me to pay, am I hearing this right? No one spends money on in-game purchases, but the main business logic of games is in-app purchases. Therefore, in the application field, revenue is still key. Where does the revenue come from? What is the quality of the revenue generated? How sustainable is the revenue generated? These are all points that we are very concerned about, focusing on results.

Liufeng: So, can we say that your current investment logic is very clear, that is, don't tell me about trends, show me actual results? I want to see real achievements, the ability to self-sustain, and actual users.

Pima: Exactly, because the times are changing, innovation is evolving, the macro interest rate environment is changing, and the logic of globalization is also changing. I think many things are not set in stone.

Bullish on the Future Development of Crypto

Liufeng: The Crypto space you're talking about doesn't seem to be the Crypto space we are familiar with.

Pima: Actually, I am very optimistic about the future development of the Crypto space. Many of the logics revolve around transactions. If we can better meet the transaction experience of global users, whether it's through launch platforms, DEX, traditional trading platforms, or even meme coins, these products are both marketable, in demand, and have users. Customers are willing to pay for your product. The U.S. legislation is slowly becoming legal and compliant, and a large amount of money will flow onto the blockchain. Stablecoins are currently only at 200 billion USD. In the next two to three years or three to five years, stablecoins may continue to grow to 1 trillion USD. At this scale, they will present a 24-hour trading and operational model. The transaction track can extend into a particularly large and significant market space. So, I am very excited about DeFi on the blockchain or products in the form of blockchain Internet finance.

Moreover, the core business model in the entire Crypto space is transaction fees. After achieving transaction fee reimbursement, the enterprise side reimburses the company side, and once the company receives the funds, it continues to proactively expand its user base. Combined with the quasi-religious nature of the Crypto community, it is very likely to achieve a certain market growth and space in some niche areas that we may not come into contact with. This is actually a very good and effective operational logic that I have seen—rather than maintaining cash flow by selling tokens, you just need to encourage more trading. If you can achieve a daily trading volume of one billion US dollars, you can earn around $1 million. You can then expand your coverage to achieve higher returns.

Of course, there are some issues with this approach. For example, once arbitrage occurs, or if the product fails to receive any positive information flow apart from transactions, it may collapse. However, this is not important. What is important is that we have seen a very good way to start, using transaction fees to support the early-stage growth of the enterprise, which is also very much in line with the characteristics of Crypto investments.

Jack Feng: You are still so spirited. Thank you for this recharge of faith.

Pi Ma: I just see a possibility.

The Core of Public Chains Lies in Gas Fees and MEV Fees

Jack: Actually, I have a confusion. Just now, it was mentioned that in the future, with the development of stablecoins, more funds may flow onto the chain. But is it possible that all these funds flowing onto the chain will remain in the state of stablecoins, and transactions will also be priced and anchored using stablecoins? They will no longer utilize the underlying native assets of the chain, such as ETH or Solana, and the profit-gaining platform will be at the application layer, seemingly stuck in a model where the underlying chain is just selling coins. It sells or issues coins to nodes, which then sell to the market. It seems that the underlying token no longer has the self-sustaining ability of transaction fees. In this way, although there may indeed be a lot of money in this industry, it seems that it does not provide much assistance to the underlying token.

Pi Ma: The core of public chains lies in Gas fees and the gradually evolving MEV. Gas fees are the costs you incur for each action you take. You can understand it as a cost you pay for bandwidth, storage, or computational resources on a public chain during a certain period. This is a cost you must bear, and having to pay this cost means that this is a very good business model and investment system logic.

A large amount of stablecoins come onto the chain. No matter which chain they access, there will definitely be a demand for liquidity and a demand for transactions. Asset on-chain is the asset-on-chaining of everything. Tokenization is a significant trend because it has high transparency, flexibility, and a 24/7 feature. You need to delve deeper to understand what is on-chain Nasdaq? It involves issuing and trading assets, which is your source. When you bring in so much capital, you can look at Tron's revenue. Their revenue is very stable, Tron maintains revenue in the tens of billions because it has a stablecoin Gas fee demand.

Jack: I understand this point, but the current trend we can see, for example, looking from Ethereum, in the last cycle, due to this Gas fee and various on-chain innovations, whether it's NFTs or DeFi, indeed drove significant value capture. However, in the process of massive on-chain applications, its Gas fee has become a hindrance to its expansion, and then it has started a process of lowering the Gas fee. As the Gas fee continues to decrease, it is discovered that despite the increasing on-chain adoption, the Gas revenue is decreasing. In the end, it basically cannot sustain its value. This phenomenon can also be seen on Solana.

Horse: You are absolutely right about this. All blockchain systems are a kind of software that will be continuously iterated. If you think from the perspective of the long-term, ultimate world, the marginal cost of Gas fees for all public chains is zero. What can they rely on for profit? You can see the priority fee on Solana. Solana's base fee accounts for roughly only 1/3, and most of the rest are tips and priority fees. Why raise tips and priority fees? This is actually the most core competitive advantage. The future revenue of public chains will rely on tips and MEV to be determined. In fact, Solana has also made a distinction in its ecosystem through this. The base fee is only for ordinary transfers, meaning transfers are one type of fee, and other transactions are another type of fee.

You will find that when you optimize the system around transactions, you can occupy a significant amount of profit at the transaction end. The profits from MEV and REV are substantial, and in the future development process, they will definitely surpass Gas fees by far. Why do users pay fees to accelerate? Because they are willing to front-run a block. The transaction market is first come, first served, which is also the reason for pursuing millisecond block out in on-chain Nasdaq. Currently, Solana is at 400 milliseconds, which is actually far from enough. I think maybe around 20 milliseconds could compete with the traditional Internet.

In this competition of REV or MEV, customers are willing to pay, which is a core competitive advantage. Why are customers willing to pay? Because they think it is profitable. Whoever holds the lion's share of MEV makes customers more willing to pay, which determines a way to discount the future core cash flow of the enterprise. Currently, about 80% of Solana's daily revenue comes from tips, priority fees, and MEV fees, which already explains the issue significantly. We need to look for more sustainable, more efficient, and higher-quality income.

The moat of a blockchain's development lies in its developers. A public blockchain is a B-end market, with the success not determined by the C-end. How a public blockchain attracts developers is entirely up to them. For me, what's important is the transaction volume of this chain, REV, and developers. These are important indicators for me to assess the growth potential and adaptability of a public blockchain. We try not to invest in any public chain projects now because the big picture is already set; what's not set is your position. Also, there's the network effect, just like why not challenge CATL in the field of new energy, as building the ecosystem is a very difficult task.

Liu Feng: Can we assume that in your view, the landscape of the public blockchain world is already fixed, and we shouldn't expect any new successful chains to rise?

Pi Ma: In the past decade, the Chinese Internet has given birth to a unicorn like ByteDance. If the VCs or secondary market hadn't invested in ByteDance in the past decade, they might as well not have existed because 55% of the profits would have been taken by ByteDance. The Pareto Principle exists in every field. The reason we have expectations for many things is that we are loyal to some of the past logic. There is still hope in Crypto, just like Hyperliquid emerging. I believe Hyperliquid, with the same goal as Solana, aims to become a decentralized Nasdaq, and Monad seems to be in that category too.

The most crucial thing is that we have learned to account for things. We have a large number of ETFs coming, and we are facing more mature investors. In the future, in a unified account, the friction of trading is getting smaller and smaller. Today, you can buy NVIDIA, Alibaba, Tencent, and tomorrow you can buy a Bitcoin ETF in the same account. Who you buy determines who is expensive and who is cheap. The key issue is, why should Solana, Ethereum be given a PE ratio of 100, 200 times? If your revenue performance over multiple cycles is lower than expected, the PE ratio will have to decrease. The investment system is becoming more mature, but many people have not thought about this issue. The focus should be on looking at core revenue and fundamental factors.

There are many people in this world who are willing to think, but now everyone's attention is extremely diversified and one-sided. So, they use some concise, abstract language to express emotions, such as "all in." This is also a microcosm of social evolution. What is scarce in this world is independent thinking and the ability to distinguish noise.

Layer 2 has greatly reduced Ethereum's economic value

Liu Feng: Actually, my last question was going to be, if you had to choose between Ethereum and Solana, how would you choose? But obviously, there's no need to ask that question anymore. So, can you talk about how Ethereum ultimately made you abandon it? Why? Are Ethereum's developers not good enough?

Horse: I believe the fundamental shift of Ethereum occurred in 2018 and 2019. When you asked me about a bearish area at that time, I mentioned Layer 2. I said Layer 2 would greatly undermine Ethereum's economic value. I have indeed studied the so-called professional terms like currency settlement layer and execution layer, but I am not enthusiastic about them because these things are best quantified. How much money is settled in the settlement layer? How much can Layer 1 earn in a day? Once Layer 2 splits, OK, after all the money is earned by Base and Arbitrum, how much of it is handed over to the central government of Ethereum? Is this revenue sharing reasonable? After the local warlords of Layer 2 obtain a large amount of economic ownership, will there be other ideas seeking armed independence? Will they seek a more profitable market-driven operation? I think these are all issues that Ethereum did not think through in the past.

I believe that everything can be quantified and explained with certain financial indicators. The gross profit margin of a public chain is actually very high. To clarify who will earn this money is crucial. If you can't figure it out, you don't know who will foot the bill, which is a very important question. So personally, I think Ethereum's shift to Layer 2 is a somewhat wrong approach that did not provide good feedback to Ethereum, as all the money was taken away by the local warlords of Layer 2.

Conclusion

Liufeng: Finally, I would like to dedicate this podcast episode to a very good friend that both Horse and I know. He is a big fan of Horse and left us in the second half of last year. We are all very sorry about it. I think if he were here, he would listen to this episode very attentively, so I would like to dedicate it to him. Also, thank you for Horse's insights.

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