How to understand the popularity of MEME?
FC: What was the most successful MEME trade you've made? How long did it take and how much money did you make?
Zepump: Actually, I don't trade that frequently. The time I was really willing to go all in on on-chain memes was probably around May or June last year. That's when I really felt the need to focus on this market. At that time, I didn't buy much either, because I usually find projects quite quickly and buy in relatively early. The market cap was less than 1 million when I bought in. I didn't buy much, just under $10,000 initially, and then started adding to my position gradually.
FC: Can you share which one it was?
Zepump: It was Harry Potter.
FC: So it wasn't one you created, right?
Zepump: Definitely not one I created. If I had that kind of operational capability, I would have been rich a long time ago.
FC: I want to know your thought process. You mentioned you added to your position. Can you talk about how you discovered it and why you decided to buy?
Zepump: It was quite a coincidence that I discovered this. I'm on Twitter a lot, and at that time I was browsing quite actively. I came across some smaller influencers talking about this person called jingtao. That's how I got introduced to it. jingtao had previously released this (Harry Potter) thing, and when I looked at it, I realized it was something I had never seen before. Later, I studied it carefully and just went for it, without overthinking it too much. I think the most important thing is to truly participate in the community and contribute to building it. I think that's quite important for memes, especially for community-based projects.
Memes come in different forms. Some are community projects, while others are more like pump-and-dump coins, where the community aspect doesn't really matter. But for community-based ones, you need to truly engage and go out there to do community work. A lot of people said it was me who created it, or that Harry Potter was a Chinese project. I think it's pretty impressive if Chinese people can create something like this, and I haven't really seen anything like it before. I also feel that the Chinese understanding of memes may not be as sophisticated, so they might not be able to create such a project.
FC: We should definitely avoid mentioning any specific regions, as that's a sensitive topic lately. Following up on what you just said, you mentioned you started following a small influencer, and then mentioned a person. Actually, a few days ago when we were talking about BASE, one of the guests also told me that he's now focusing on smaller influencers, like those with a few thousand or tens of thousands of followers, who mention a meme. He feels they might be earlier in the distribution chain, compared to the bigger influencers. Was that also your thought process, or was that person particularly important?
Zepump: What are you saying?
FC: The small influencer you mentioned with a few hundred followers, was that person particularly important, or was it more about the thought process of looking at smaller influencers?
Zepump: I haven't seen anything like that before. There might be similar cases now, like Newsy Johnson, the Black guy. But back then, there wasn't really a distinct style like that. So a lot of people would try to imitate his way of speaking. That's when I took a closer look at the things he was posting. Yes, he wasn't very big at the time, maybe just a few hundred followers when I started following him. We would occasionally banter with each other, and then he eventually became a big influencer.
FC: I see. So he had no direct connection to the Harry Potter project, right?
Zepump: No direct connection. He was just a GEM Hunter, he would just go on-chain and pump on-chain memes.
FC: I understand. Why were you interested in his particular style of speaking?
Zepump: The distinctive style, first of all, was because no one had done it before. Secondly, it was a foreigner pretending to be Chinese and posting these rather absurd things. I hadn't seen that before, and I felt this thing could become popular. Actually, I tend to make predictions about whether something or someone might become popular in the future. I don't just look at the current situation, I try to look a bit further ahead.
FC: I see, that's quite interesting. So you're saying the most important thing was the uniqueness, right?
Zepump: Yes, something that hadn't been seen before.
FC: Okay, unique and potentially viral. I actually looked at a report on memes the other day, and it mentioned the definition of memes, which comes from the book "The Selfish Gene". If you had to explain to a friend what a meme is, how would you describe it?
Zepump: Are you referring to meme coins?
FC: Yes, or if someone asks you what you're trading in the crypto space, how would you explain what a meme is to them?
Zepump: I think you can understand it this way - treat meme coins like short videos on TikTok or Douyin, and treat value coins like videos on YouTube or Bilibili. Nowadays, especially young people, they may not have the time to watch those long videos, 10 or 15 minutes. But if you give them a 1.5-minute video, they can understand it all. That's the best, and it can capture their attention. So they naturally gravitate towards TikTok or Douyin, rather than YouTube videos.
I think it's the same with coins. Once meme coins came about, people realized that if they can quickly trade attention, why bother with those so-called value coins, waiting for development and all that. I'd rather just focus on the short stuff and trade that.
FC: I think your analogy is really good. Following your logic, just like on TikTok or Douyin, people know the videos that go viral are often copies or iterations of previous viral content, combined with their own twist. Do you think memes have a similar characteristic, where they might build on previous hot topics and then introduce new elements?
Zepump: I would actually have more respect for originality. I don't really appreciate copycats. I also don't really like animal-themed coins.
FC: Why is that?
Zepump: Because with animal coins, I feel it's quite difficult to develop a real community culture around them. It's more likely to just be about whether the team can pump the coin or not, rather than the community being able to create some kind of culture or cosplay around it in the long run. Like if you create a dog or cat coin now, it's just betting on whether the team can pump it, rather than the community being able to develop something meaningful.
How to screen targets and construct a trading strategy?
FC: Let's dive deeper into the trading strategy. I want to know, when you trade memes, what are the key points you consider in your overall investment strategy or your understanding of this space? How do you find the next Harry Potter? What are the key points you set up?
Zepump: You mean how I select the targets, right?
FC: Yes, the target selection.
Zepump: I think I would look at it from two aspects. First, I need to check the vibe of the community around the coin. If it's a relatively chill community, I think there's a chance I might buy in. Then I also need to consider the memeability, whether the meme itself has the ability to spread, or whether I have the capability to do some secondary creation and pass it on to others. Because memes are constantly evolving, if you're still playing with the old meme formats, it's going to be really hard to gain traction again, as people always want something new.
FC: You told me before that when a community forms an emoji, it's actually a very important start. Can you give some concrete examples of what a "chill" or good community looks like?
Zepump: I haven't actually seen that many really good communities so far, but I can give a few examples. First, I think Chainlink is a fairly typical example. It's a so-called "oracle" project, but it's actually a MEME. Yes, because it took off from 4chan, where a lot of people post all kinds of MEMES of its founders, essentially treating them like a cult-like leader. You might see people trolling or creating all kinds of content around this one persona.
Then, a group of internet nerds tend to really like this kind of image - the chubby, big guy look. Chainlink has definitely helped bring PEPE back to life. Their MEMES often feature a variant of PEPE called APU. So it's really a community built around these images.
Another one I think has done a good job is the former Magic, or Treasure DAO. They also had their own set of imagery, starting with a monkey called "small brains" when they first came out. This allowed the community to have a sense of identity, with people on Twitter changing their profile pictures to this little monkey, following each other, creating an echo chamber where people just kept hyping up holding Magic, strengthening the community cohesion.
FC: Was the term "echo chamber" something the community came up with, or did you coin it?
Zepump: I coined that term.
FC: So in simple terms, the more it spreads and the louder the volume, the further it goes, right?
Zepump: No, that's not quite the concept. An echo chamber is a closed environment where people keep saying the same things, reinforcing the same ideas.
FC: I see, interesting. Please continue with the third example.
Zepump: The third project is the Harry Potter one. They first had a token, then their own NFTs. The NFTs have a bit of a "crazy" vibe, similar to MEME. They did something quite similar to Magic, but better in terms of stronger community creativity. They basically have new fan-made content every day, and the community is also quite mischievous - the team even participated in a boxing match and donated a water well to a Nigerian village, always keeping things relevant and interesting for the community.
FC: What I was trying to say earlier is about the group that shares projects with each other. First, how can you get into these groups? And second, why are they willing to share with you early on, since in a way you may also be the one "holding the bag".
Zepump: I think first you need to have the ability to find these projects yourself, and also have a certain level of influence. I think that's the only way you can get invited to these groups. Or if you've been in the industry for a while and have some "degen" friends who appreciate each other, they'll naturally bring you into the group.
FC: What I mean is, there are two aspects - first, your ability to find projects, and second, you yourself becoming part of the echo chamber, which can make the whole atmosphere better or bring more awareness to the project. Is that right?
Zepump: Yes, that's correct.
FC: Okay, got it. Let's continue our discussion on trading strategies. Now that we've found the target, and we've talked about the methods from the source, the next issue is about capital allocation. For example, another friend of mine has $2,000, and he might use $10,000 or $20,000, and his strategy is to buy one every day. After he's bought them all, as long as he doubles his money, he'll take out the principal and just play with the rest. What's your strategy?
Zepump: Generally, if it's a MEME I really like, first I'll just hold it after buying. Then I'll try to help pump it up. If it doesn't pump, I don't really care, the thing can just go to zero, I won't bother selling it either.
FC: What percentage allocation would you have this mindset with? Would you still not care if it was 50% of your portfolio?
Zepump: No, I think those are all small positions for me. Because once a MEME reaches a certain level, I won't touch it anymore. For example, I first noticed PEPE when it was around $3 million market cap, but I felt like it had already been "discovered" by others, so even though I really like PEPE, I didn't get in because I felt it lacked originality. So no matter how much it pumped after that, I felt it wasn't my business anymore.
FC: I think that's good. We often talk about having a "stop doing" list. I understand valuation is probably an important signal for you. How do you judge valuation - at what point do you say, "Okay, I'm out, I'm not playing with this anymore"? I feel like that's quite difficult.
Zepump: I think it depends on the market conditions at the time. Back in May last year, if a coin suddenly pumped to $3 million, that was already quite high. At that time, my expectation for such a thing was maybe $10-20 million, because that was considered a big MEME back then. Now, $10-20 million might be considered a bargain price.
FC: So it's really about looking at the average valuation in the market, right?
Zepump: Yes, and it also depends on the chain. For example, on Solana, MEME projects might have higher valuations compared to Ethereum, because there's more money flowing into Solana. So $10-20 million on Solana could be considered cheap, while the same on Ethereum might already be relatively expensive.
FC: I see, so it's also about looking at the project's market share on the chain, and then determining your valuation range. Next question - we now consider MEME as a major sector, do you think it will continue to persist in cycles, or do you think there will be a point where it becomes ineffective? When do you think you'll start to not play in this sector anymore?
Zepump: I don't think I'll stop playing in this sector, because as I mentioned earlier, once you get used to the short-term pumping of these projects, it's very hard to go back to the traditional VC coins or value coins. I think this has had a significant impact on the industry - VC investment in this space may gradually become less influential.
FC: That's quite pessimistic.
Zepump: Yes, that was my view last year, which is why we've also invested less in VCs - I felt the user habits were shifting.
FC: I see. How do you view these celebrities launching coins on Solana now?
Zepump: Those are very short-term. I forget who said this, but the idea is that the moment a celebrity launches a coin, that's when the attention is most concentrated. The influence and attention will only decline after that. I think celebrity coins are different from political coins like Trump or Maga, because those can keep getting reinforced by news. But for celebrities, it's hard for them to be in the headlines every day.
FC: I see. For MEME, the most important thing is really the narrative.
Zepump: I think the choice of subject matter is very important.
FC: So it needs to be sustainable, right?
Zepump: Yes, it can't be short-term. If you want to hold MEME for a long time, you need to find cultural symbols. In my opinion, this thing can continue, it is not a short-term so-called hot search or keyword, but it can live for a long time in this blockchain world.
FC: Can you give two examples, for example, if a coin meets these two standards, it may live longer?
Zepump: You are already a cultural symbol yourself. For example, PEPE is actually a cultural symbol, and I think this target is worth holding for the long term.
FC: I see, I feel that everyone should go and see Hua and Hua's "Super Symbol is Super Creativity". So what else do you think you can see in MEME in the future? For example, you see that short videos first fire up dancing, and then now the plot number is stir-frying CP, what do you think will happen next?
Zepump: It's hard to say, but I think the fact that pump.fun has added a live streaming function is a pretty major update.
FC: Because this is a variable, do you mean that people may get information in a more intuitive way?
Zepump: Yes, the way of dissemination may be different, and it has live streaming, so there may be some new things.
FC: Okay, I understand. Let's move on to the next part. Have you bought that BOM?
Zepump: I didn't buy it, because I had previously bought a lot of these Art NFTs, and I'm quite pessimistic about the artists in the crypto circle, because they don't really care about the long-term. Including the one that has risen particularly sharply these days, Turbo, I had also bought it before, but I feel that I have been deeply hurt, because the artist is so stupid that he suddenly issued another coin to satirize something, and the whole community collapsed, it was originally quite good, because he is the so-called first one issued with the help of ChatGPT, he didn't know how to issue coins before, after helping to issue it, the heat was still quite good, but later he made a stupid mistake, and I just felt very disappointed in this artist. In general, I feel that the ideas of artists may be more random, and I can't predict this thing.
FC: Let's move on to talk about your trading experience, because just now you mentioned your trading strategy, but I feel that why the trading strategy is formed is very important. Can you tell me, for example, what was the most losing trade you made? What did you buy and why did you buy and sell?
Zepump: I lose money every day. This is how I am, if the drop is too severe, I just won't sell, let it go to zero. I feel that the methodology is different in each cycle, the method I used in the last cycle is completely useless now. Because in the last cycle I started to follow Twitter, and I also saw it relatively early, so I made money when the project just started to fire up on Twitter, when foreigners might not have been so hot yet, and the Chinese-speaking area definitely didn't know about it. I would find such projects to buy, and then slowly list, and when it spread to the Chinese-speaking area, I would sell it. I used to make money this way. But now I feel the time difference is getting shorter and shorter, once it's on Twitter, basically everyone can know about it relatively quickly, so I feel this advantage is gone, so I started to study other things, like MEME. The crypto circle is essentially about who gets in early, no matter what you buy, you buy a bad project, or you buy a scam, but if you get in early, you also have a chance to sell it at a higher price to the later bagholders.
FC: I want to ask, what person or what kind of cognitive change do you think is most important in the whole trading process? For me, the biggest change was that 312 time, I chased the trend and sold in a panic, listening to KOLs on the left saying the industry was going to be gone, and on the right saying to go all in. At that time, I felt I needed to establish my own trading system. So what did you encounter or see that led you to form your current trading system?
Zepump: I think what's more important is that a friend of mine taught me to keep sliding the stop-loss, for example, after you open a position and start to make a profit, you keep moving your stop-loss up, in the end it's hard for me to lose money I think, unless the direction is wrong from the beginning.
FC: How would you do it with MEME?
Zepump: For MEME, I just buy and hold, buy and then HODL.
FC: So what are your reasons for selling MEME? How do you determine the timing of the sale?
Zepump: I definitely won't sell until Harry Potter reaches $1 billion. For the projects I really like, I'll help them think of ways to do market-making, but for the projects I don't like, I'll just sell them as soon as they go up, even if I sell at the top, it doesn't matter.
FC: So how do you usually help these projects?
Zepump: For a project that you can actually help, you can help from various aspects, because I may have more resources on the exchange side, I will try to help them get listed, and also help them connect with market makers or some partners, or sometimes just help them think about what they should do. Because many MEME projects don't actually have very strong resources in the crypto circle, they may be very strong in promotion or operations, but they may not be very familiar with these crypto circle players, so sometimes you need to get involved and tell them what they need to do at this stage, and what they need to do at that stage. They may have very good ideas, but they may not have very good other factors to help them.
How to Better Pump MEME?
FC: I'm actually suddenly curious about the personality thing, because I suddenly found that the people around me who are really good at pumping MEME actually have a relatively casual personality. Do you see any commonalities in the people around you who are pumping MEME? And should we put down some of our previous cognitions in order to do better, that is, on the MEME track?
Zepump: I think what you said makes sense, you don't have to be too serious about it, a lot of things just need to be casual, don't get stuck in a rut. MEME itself is not a very serious thing, it's like deconstructing all these serious financial things, isn't Bitcoin like that too? I actually think the crypto circle can't be treated too seriously, if you treat it too seriously, you go calculate how the data is, but in fact the price has nothing to do with the data. I just saw a report today saying that Brave browser has so many users, so what? Your coin has no one buying it, your data has nothing to do with the coin, the coin is originally an independent thing, I feel it has nothing to do with your product. If you look at this thing too seriously, I feel it's easy not to make money.
FC: What do you think you see in the people around you or how you prepare to keep sensitive to the market? Or how did you do it before?
Zepump: Definitely scrolling through Twitter is the most helpful thing for me, at least you know what's happening in the industry, because I feel that most of the obvious things happen on Twitter, and the hidden things you have to find a way to get to know these core institutions in the crypto circle to understand what's really happening under the surface.
FC: If everyone is scrolling through Twitter, how can I scroll better than others?
Zepump: You keep optimizing your follow list, I think this is very important, because the noise on there is really too much. Actually at first I think it's good to follow more people, then gradually you may feel that you don't really need to follow so many people, you may gradually reduce your follow list.
FC: Last question, what's your latest position? This is not investment advice.
Zepump: I recently bought Solana, and also some degen on Base, although they went down after I bought them, but I feel that Base may have a second wave, after friend.tech left, it may be the one holding the flag, I feel I'm willing to bet on it.
