Author: Stacy Muur Source: @stacymuur Translation: Shan Eoba, Jinse Finance
In 2016, when I first encountered Web3, I was attracted by this new economic model. At that time, I bought my first Bitcoin for $600 and sold it for $1,000, considering myself a savvy investor. I earned incentives on Steemit as a contributor to early protocols, and also introduced my friends to the cryptocurrency world. However, over time, I realized that I was just lucky, and making money was not due to technology or knowledge.
In the process, I also lost a lot of money. I fell into revenge trading, encountered scams, failed to hedge risks, and failed to profit at the right time.
Today, I want to share some lessons I've learned from years of research, analysis, and reflection on Web3. If you read carefully, I believe these experiences can become your advantage.
1. Market-driven hype
This month, I published an article titled "The Hidden Power of Prediction Markets: The Touchstone of the World", outlining Delphi's latest report on prediction markets. I strongly recommend reading it, as it is one of the best Delphi reports I've seen.
The report quotes a passage from vibhu:
The rules of CT (Crypto Twitter) are very simple:
When the token price goes up, it is discussed, analyzed, philosophized, posted on Twitter, celebrated, venture-backed, and called the representative of the future;
When the token price goes down, it is considered a scam, a bottomless pit, dead, depreciated, and canceled, and everyone should be jailed.
This phenomenon does exist. Once a token is launched, the interest in a particular protocol or category directly depends on its price fluctuations. We have observed this many times with SOL, AVAX, SUI meme coins, DePIN tokens, and even Bitcoin.
Over the years, I have avoided buying tokens when the price is high, fearing that I will be the one holding the bag. Now I understand that it is usually easier to profit by buying assets that are just starting to rise, and have not yet been discussed on platforms like Reddit or X (Twitter).
2. Venture capitalists favor marketability
Friends who follow my content on X platform know that I often mention that fundamentals and profitability are key to assessing the sustainability of a protocol and the product-market fit.
But recently, when comparing Web2 companies and Web3 brands, I realized an important thing:
Venture capitalists invest in Web3 projects not because of expected profitability.
They know you will buy these tokens at a higher fully diluted valuation (FDV) during the Token Generation Event (TGE).
What venture capitalists value is not the product-market fit, but the hype and marketability. They invest in concepts and keywords that are easy to market, and the longer the marketability cycle, the higher the FDV.
This model has led to the "low liquidity, high FDV" phenomenon in many new token launches. Most of these companies have no actual revenue, and their token supply is fully unlocked even before their annual revenue reaches 1/10 of the FDV.
The core lesson? Regrettably, the market narrative is far more important than the fundamentals.
3. You don't have "personal opinions"
Here's a simple test: if I invited you to join the MegaETH pre-sale, would you agree? Even if it's a one-way communication, if you've heard of MegaETH, the answer is likely to be "yes".
This is not surprising. MegaETH has Buterin's support, is widely discussed, and many people call it "the next big thing in Ethereum expansion".
But if you've never heard of MegaETH and it doesn't have any famous supporters, would you still join?
Your views are influenced, even if you're not aware of it. Any discussion about it will shape your perception, even if you haven't read the content in depth.
Therefore, as a marketer, when I plan campaigns, I often have each blogger promote the brand multiple times. Our thought process is interesting: the first mention is often ignored, the second has a 60% chance of being ignored, and the third only has a 20% chance of being ignored.
The more frequently something appears on the timeline, the more likely it is to generate interest. When you see certain content repeatedly without participating, it can create a "fear of missing out" (FOMO).
Your "opinions" - all your beliefs, perspectives, and even criticisms - actually reflect the content you consume.
4. You can't participate in all narratives at the same time
The information in Web3 is overwhelming: traders, passive income seekers, airdrop hunters, early protocol researchers, meme coin enthusiasts, fundamental analysts, and more, all outputting information in the same data center, along with project news and analysis reports.
The information explosion is overwhelming, and if you try to participate in every project, you will find it difficult to invest efficiently.
I'm not afraid of someone who has practiced 10,000 kicks once, but I am afraid of someone who has practiced one kick 10,000 times. - Bruce Lee
The flood of information often makes one feel exposed. I know some skilled perpetual contract traders who lost money in the meme coin frenzy - they were good at perpetual contract trading, but not at meme coins.
The best strategy? Become an expert in your strongest area, while also exploring some areas you hope to improve in the long run.
To cope with the feeling of being exposed, I've adopted this strategy: don't participate in meme coin trading on the first day, as it's too time-consuming. Whenever I see posts about early meme coins or new million-dollar trading strategies, I click the three dots in the top right of the tweet and select "I'm not interested in this". This can significantly optimize your timeline, trust me.
5. Losses are catalysts for growth
Separating emotions from rationality and avoiding emotional fluctuations based on trading results is difficult - but if you always do this, you're a gambler, not an investor.
Every mistake and loss is an opportunity for growth. Record and analyze them, add timestamps, and make a plan for the next step. This is the best way to transition from a gambler's mindset to an investor's mindset.
Remember: there are patterns for profiting in every situation, but the situations that lead to losses are rare. Analyzing and recording each loss can significantly reduce the likelihood of future losses.
When I worked at a hedge fund in 2020, I observed the operating methods of professional traders: they conduct extensive data analysis before trading, but when exiting - whether the result is a win or a loss - they also conduct in-depth research.
6. Master options trading
In the Web3 space, the trading volume of options is only a small fraction of the futures market. This is mainly because many market participants lack relevant experience, in contrast to the traditional market.
If you are an active trader, researching options trading is crucial. Although options trading may seem a bit complex at first, the time spent mastering it is definitely worthwhile. In just about a week, you can explore various options hedging strategies and find a method that suits you.
Options can significantly reduce losses. Although losses are inevitable, with hedged positions, the mindset to withstand them will be more composed.
I hope these experiences can provide you with some inspiration. If you apply them to your daily practice, I believe your efficiency will improve.
Find high-quality data, uncover original insights, and master the areas you are passionate about. I firmly believe that the future of Web3 is bright. Learning, analyzing, and exploring is never too late.
