Controversial whale fusion! Dongzhong held a Space event at 8 pm yesterday (Tuesday) with the theme of "Zero Sum Game: How does the controversial whale make profits from meme coins and SocialFi?" ", which invited heavyweight guests, Machi Big Brother , a well-known figure in the crypto, and Su Zhu, co-founder of Three Arrows Capital, to talk about meme coins and SocialFi market conditions.
"Wonderful Space Link"
The transformation of the meme currency track
Moving Zone : Next we delve into the meme currency track. From the early PoW-based $DOGE, to the community-driven $Pepe last year, to the recent Solana's $Bonk and the large number of meme coins on Pump.Fun. I would like to ask you two, you have been in this market for a long time, what do you think of the meme currency track? How is it different from the past?
Su : I think it’s not much different from before. It’s just that there are so many meme coins now, and it’s easier to issue meme coins yourself. If you think about it, in 2014 and 2015, there were many people issuing meme coins like Bitcoin, such as Litecoin. At that time you need to post a tweet on X saying that this coin has the same supply as Bitcoin, but you still need to write something different.
Later, meme coins appeared more in DeFi, such as ShibaInu. With the current wave of meme coins, it is easier to issue your own coins, so there are now a lot of meme coins. Occasionally there are some stories of getting rich from $100 to $1 million, which attracts many retail investors to enter the market. , the popularity will be greater, and they will feel that they "can enter the market very early."
Another point is that if investors buy Bitcoin, Ethereum or Solana now, investors will feel that they are no longer the first, but buying meme coins will give you a feeling of "Still Early". That's why you see 1 million mg of revenue a day on Pump.Fun, and everyone feels like they were the first to get in.
Many times, investors think memes are just a game, very fun, and it doesn’t matter if they lose money. This is why meme coins are so active on Solana. If meme coins are not good, then the ecology of many crypto will also be affected.
Machi : We previously tried SocialFi meme coins in 2017, and later also did $Cream this Landing Protocol during the DeFi period. Meme coins have recently become more and more popular on Solana. I have always been ETH-maxi before and did not participate in other chains, but then I thought I could try meme coins on Solana.
From the beginning of research to now, I have done it myself. The idea is that I think the mentality should be that many people are just tired. Early VC investors in other projects bought it at a very cheap price, but when ordinary investors can buy it, the price has already Very high. This is like the Early part Su said, but if you don't enter the market early, you will be stuck at a high position in the later period, especially when the unlock expires and they sell directly to the market.
What’s even more terrifying is that those locked coins will still be sold to the market, and you don’t know where these coins come from. These are unethical behaviors and some of the darkest operations I have seen in the crypto.
If the project party writes good game rules and follows these rules, and if their performance and personality are good, I will fully support and invest in them. But if I see some unethical behavior, I won't consider investing.
Online exchanges lose popularity instead
Moving area: The relationship between meme coins and the listing of exchanges is very close. When an exchange prepares to list a certain meme currency, the price of the currency will rise sharply, or the exchange will see a large trading volume and be forced to cater to the listing. . Machi Big Brother, what do you think you need to promote if $Bobaoopa wants to be listed on exchanges like Binance...etc. in the future? What will $Bobaoopa’s relationship with exchanges be like?
Machi : Binance is very strict. I have only listed two coins on Binance, so this is a very difficult thing. Each exchange has its own rules of the game, whether it is a small or medium-sized exchange or a large exchange. My opinion is that there is a huge gap compared to the previous strength. Now there are decentralized exchanges (DeX) such as UniSwap, such as Pump.fund, OX.fun, Friend.tech, etc., and they feel like they are becoming exchanges.
These decentralized exchanges, such as UniSwap, SushiSwap, Curve, etc., have slowly weakened the influence of centralized exchanges. Although centralized exchanges are still an entrance to legal currency, their power is gradually weakening. One of the key points you just mentioned about Meme Coin is that they often burn the liquidity pool (LP) to ensure that there is some liquidity there, so as to prevent themselves from using different wallets to attack.
Recently there is a project called Baseline. I think they are amazing. These young people are very creative. The new thing they are doing is similar to a new ERC-20. You can issue coins on their platform, like OX, Like Pump and Friend.tech, they are also coins in the ecosystem. These coins can be automatically leveraged. If you have the opportunity, you can also take a look at Baseline.
Su : I think this wave is different from the previous wave. In the previous wave, DeFi projects were easy to be listed on exchanges because some people were using these projects. Exchanges were afraid that users would turn to DeFi and leave centralized exchanges, so then At that time, many DeFi projects, such as Binance and FTX, would immediately list their currencies. In addition, competition among centralized exchanges was also fierce.
But this wave of competition is much less, and exchanges mainly consider regulatory issues, so now when the currency is listed, the trading volume actually doesn’t matter anymore. If there are some coins on Ethereum, such as $Trump, they have a daily trading volume of 10 million US dollars, but they are basically not listed on exchanges because many teams do not have coins to exchange. These are fair launch projects. , the liquidity pool (LP) is locked.
For example, the same is true for $Pepe. They did not give exchange coins, but the exchange did choose to go online because of the large trading volume. $Bonk was listed very quickly. I’m not sure exactly why. Most meme coins have not been listed on exchanges yet. Bybit has recently started to list some, but there are still relatively few.
No need to rely on big bosses to speculate in meme coins
Dongzhi: Got it, so you two OGs think that the impact of exchanges is smaller now than before?
Su : Yes, the impact has indeed become smaller. Now a lot of funds are on the chain, like $WIF mainly from the chain. In addition, in fact, with current wallets and payment services, such as MoonPay, you can buy Solana and then buy meme coins, which is even more efficient than on a centralized exchange. It's easier and feels safer.
For example, in the last wave of Olympus or Wonderland, they could raise about one billion US dollars in a month. Now the capital flow on the chain is greater than that of centralized exchanges. Instead, the narrative of being on the exchange is gone.
Moving Zone: Next we want to talk about the community of meme coins in depth. In fact, the community is the most important when choosing meme coins. Mr.Block, a well-known KOL in Taiwan, also said that in fact, there are big bosses behind many communities, but retail investors may not know it. How do we choose a fun meme coin community? How to analyze it?
Su : I think you can look at some Smart Money trends, and you can also look at whether the story of this project can be told in a big way. In fact, you don’t need to think too much about which big guy is pushing which coin. Sometimes this is indeed a strategy, but what is more important is whether you think this project is fun, whether this community is attractive, and whether you want to chat with them every day. Chatting is still a bit boring.
Many coins will have unexpected performances. For example, $Slerf is one such coin that has no founders and no one pushing it. $Pepe is also very smart. They started to build their own story early on, with very little action from the project side. The key is that whether this meme coin can grow from a market value of US$100 million to US$1 billion requires a process, rather than being promoted by one person or a group of people. The best situation is that the value of this coin is realized by everyone, rather than relying on a certain big shot to pull the market.
How SocialFi creates a win-win-win-win is the key
Moving Zone: I would like to ask Machi Big Brother, I have recently seen you continuously increasing your position in $Friend. You may have lost money, but you seem to be very optimistic about this track. What do you think of SocialFi and Frendtech?
Machi : SocialFi is related to my previous career. I once worked on a live broadcast platform. The live broadcast platform makes money, the anchor also makes money, and fans donate or subscribe. The most interesting thing about SocialFi in Web3 is that all three parties can win: creators, platforms, and fans or supporters can all make money. While no team has fully solved this problem yet, this feels a lot like Web2 all over again to me.
Web2 In the beginning, creators on YouTube or Douyin did not make a lot of money. Later, there were super popular anchors like Mr. Beast and Twitch. There are a lot of people trying SocialFi right now, but they haven't been successful yet. I think Friend.tech has great potential in this field because I like the founder and his philosophy.
Frentech started with a 5% fee, but they recently adjusted their model to a 1.5% fee, with all coins distributed to users. I appreciate this fair issuance method, so I have been buying Friend.tech coins. I think that in order for SocialFi to succeed, it needs to find a balance point where all three parties can win, so that it can have a chance to challenge the large platform of Web2.
Dongzhi: Then why don’t you consider starting the SocialFi track in Web3?
Machi : Starting a business is a lot like making music. You may make a super popular song, but another song may not be equally successful. It's about the right time and luck. I once tried to start an NFT exchange, but I couldn't do it because I lacked a tipping point.
We also tried to create a new project, which took three weeks to create. It has functions such as teams and dynamic curves. I'm always looking for opportunities and if it feels right, I'll jump in.
Memecoin Trading Strategy: Focus, Be Patient
Moving zone: Today happens to be a day when a major market event occurs. When someone says that the market is not going well in the future, meme coins will be a hot spot. But with the development of ETFs, will it affect the performance of meme coins? Brother Machi, what do you think?
Machi : In the many bull and bear markets we have experienced, every time Bitcoin ran first, then Ethereum, and finally other currencies. So, if you want to play with this timing, you can buy Bitcoin first, then transfer to Ethereum, and then transfer to other currencies, but this is difficult to master.
My own strategy is to choose coins that I trust and concentrate my funds on three to five coins instead of spreading them across a dozen coins. I don't trade every day, I just choose a few coins that I trust and put my money there. This way, I avoid the influence of "race leaders" and bad luck.
Moving Area: Suzhu What do you think of the subsequent market trends of meme coins and Ethereum Altcoin?
Su : Meme coins may not run faster than Ethereum at the beginning, but in the later stage, the volatility effect of these coins is very large. When Ethereum rises to a certain level, many people start to buy meme coins. This is a normal phenomenon.
For example, if $Pepe rises 20% as Ethereum, it will move as fast as Ethereum, or even faster. Especially for Ethereum-related meme coins, when Ethereum reaches new highs, many people will casually buy meme coins.
The rise of meme coins mainly comes from the promotion of the community and the fluctuation effect of a gambling mentality. Solana is also a good example. When Solana rises, people feel richer and start playing more meme coins. This increase in activity will also drive Solana's rise.
Moving Zone: Understand Understand. So you think there is a positive flywheel effect between memecoins and chains, where a good chain is good for a memecoin, and vice versa?
Su : Yes, the performance of meme coins is related to the performance of the chain. Even for Bitcoiners, meme coins have a lot of appeal. For example, Pepe was silent for six or seven months, and then suddenly it increased 20 times. Dogecoin has increased 100 times in 90 days in 2021, so if you are bullish on meme coins, buy some and let them sit instead of trading every day.
If the meme currency rises 10 times, sell a little, but don’t sell just because it rises by 20%, and buy again when it falls by 10%. This trading strategy will make you lose money. Meme coins need time to brew, and only by waiting patiently can you make money.
"The above remarks of the whale do not represent the position of the moving zone!" Please continue to pay attention to the DongZuX platform 》
