Cryptocurrencies are like a game: trading tokens, making (and losing) money, and gaining followers on X. Do you feel the same way? But unlike real games, the failure of the cryptocurrency game can have serious consequences.
After the Terra collapse, according to an online record by a South Korean father, a family of three (including a 10-year-old daughter) committed suicide due to financial losses. If I openly acknowledge that cryptocurrencies are a game, I would feel guilty. Too many people have been deceived and lost their life savings.
But the mindset of viewing cryptocurrencies as a game helps me stay rational and motivated to keep playing. Because the craziness we experience in this industry is just one aspect, its greatest advantage is: allowing ordinary people to realize their dream of financial freedom.
As DegenSpartan said:
"After you graduate, you'll have a brief period to indulge in gambling, then become an elite, or live off your salary for the rest of your life."
In this article, I want to share the script of the crypto game, my thinking framework, and how to win the crypto game.
The Rules of the Crypto Game
Once you realize the similarities between cryptocurrencies and (especially MMORPG) games, you can't ignore it.
In times of economic difficulty, when there is no new capital inflow, the PvP (player-vs-player) mode will prevail. In bull markets, as new funds enter, we switch to the PvE (player-vs-environment) mode.
If you don't like the influence KOLs have on you, we'll come up with the idea of "don't hate the players, hate the game." We even designed token economics to prevent people from selling tokens using various game theory.
Just like game upgrades, the crypto game is constantly evolving, with new stories appearing and disappearing.
For example, Pranksy, who was once a top NFT player, is now completely out of sync with the pace of memecoins. The gameplay has changed, but he still insists on playing a game that few people are interested in.
Of course, memecoins may be terrible, but those who didn't know how to play the NFT minting and trading game a few years ago also said the same thing about NFTs.
In the game, you face two choices: either adapt and participate, or wait for the new gameplay. There is a third, more difficult choice, which is to change the rules of the game itself.
For example, Cobie launched the Echo platform, allowing retail investors to participate in venture capital and buy tokens like in the ICO era. The story of memecoins will be gradually overthrown by those players who decide to change the rules of the game.
However, Memecoins are also worth praising, as they have actually succeeded in changing the rules of the game.
In the past year or so, we've been playing the "points" game. You deposit assets into the protocol, accumulate points, and pray for a generous airdrop. I know you like this game, because the "DeFi degen bull market script" is still my most popular post.
Anyway, it turns out that many people have been deceived.
Since a higher TVL means a higher valuation, the FDV of token issuances have been ridiculously high, with the beneficiaries being the VCs and teams who entered at low valuations, as well as the airdrop farmers.
So, many people turned to memecoins, standing against the VC tokens.
While Pranksy is failing, the memecoin protagonists Ansem, Murad, and the players joining their tribe are succeeding.
"Don't hate the players, hate the game"
Within the overall gameplay, we are constantly introducing new mini-games. You have to decide whether to participate. If you do, you must understand the rules, as there will always be opponents.
For example, daos.fun allows the trading of tokenized funds. However, the confusing part is that the most popular "fund" ai16z is trading at 52 times its NAV (net asset value). Its trading mechanism is similar to memecoins.
Players are all trying to understand it. Squiggly compared the fund to a "Grayscale structure" or a Friend.tech trading fee Ponzi scheme. BREAD has a different opinion on Friend.tech.
Squiggly and BREAD's Perspectives, Who is Right?
Although it's the same product, players' understanding of it varies greatly. Players need to find their own advantages in the game and profit from them.
This may be simple. After the team announces plans to whitelist a new "fund" on their website, I expect degens holding other "fund tokens" may sell some of their old fund tokens to invest in the new fund. In fact, once a new fund is added, the prices of all old fund tokens will likely drop by around 50%.
Generally, the more confusing the gameplay, the greater the opportunity to profit from information asymmetry.
The beauty of cryptocurrencies lies in the fact that there are always some people who will join the new trend without proper investigation, and as long as you do a little basic research, you have the opportunity to make a profit.
That said, I often try new things with a little money first, and then do research to understand how they work in practice. Learn as you go, and when you know whether you can win the game, invest more funds.
The reason why Ton's click-to-earn games are thriving is that they are the opposite of complex DeFi games: you only need to click the buttons on the screen to earn money.
However, due to the simplicity of the game, the rewards are also very low; unless you utilize the system and use artificial fingers to click hundreds of mobile phones.
Cryptography becomes more interesting and complex here: there are multiple levels, roles and strategies to choose from. If you wish, you can also choose side quests.
Let me give you an example.
Recently, I have been working hard to become an active representative of multiple DAOs, especially Lido, Arbitrum and Uniswap.
DAOs advocate the vision of decentralized organizations, but now most DAOs are far from decentralized, which is an open secret. For example, in the Arbitrum DAO, 14 addresses control more than 50% of the voting rights, and other DAOs are the same.
The Uniswap DAO did not know that Unichain would launch the UNI staking feature. This also explains why the fee switch has not been turned on for several months. Insiders know that once UNI staking is implemented, the fee switch will no longer be necessary, and the DAO has been kept in the dark.
DAOs recognize that voting concentration is a big problem. To solve this problem, they have launched incentive programs to attract new participants. By becoming an active governance representative of a DAO, you can earn $3,000 to $10,000.
But it's not easy. You have to actively follow forum discussions, post comments, and vote on proposals. The most difficult part is getting token holders to delegate their tokens to you, which touches on the political game.
After I posted about coordinating token holders and protocol incentive measures, an anonymous whale delegated 2.5 million LDO to me. To be honest, I received this delegation simply because I am somewhat famous for frequently posting on X. Playing the popularity game on X can bring more opportunities in the cryptocurrency field, and these opportunities are rarely known to others.
Now, multiple protocols have contacted me, thanking me for voting in support of their proposals, or asking me to support future proposals. Every DAO that doesn't appear on the X feed or DAO forums has an important relationship-building process.
Honestly, I enjoy this game. I firmly believe in the future of decentralization and hope to have an impact.
Player Mentality
Did you know that Vitalik Buterin founded Ethereum shortly after Blizzard removed the damage component from the warlock's "Life Tap" spell?
"I cried myself to sleep that night, realizing the horrors of centralized services. I quickly decided to quit." -- Vitalik Buterin
Vitalik decided to quit World of Warcraft because he felt he couldn't influence the game rules.
The wonderful thing about cryptocurrencies is that we can all play a role and influence the game rules.
Just like blockchains, crypto games are also decentralized. Venture capitalists, retail investors, builders, KOLs: we all have our roles, and some are more influential than others.
Ansem, Murad and other meme coin KOLs drive the meme coin cycle, but you can choose not to join their game.
I've digressed a bit, but in fact I'm surprised at how little influence venture capitalists have in shaping narratives. Crypto VCs should advocate for their investments, but their focus on X is minimal.
Do they really not care? Or are they playing a different game?
A notable example is Kyle of Multicoin, who is working hard to make money. More venture capitalists should share their views on this industry, advocate for their portfolio protocols, and provide in-depth research to clarify current developments.
Based on my interviews with crypto VCs, one possible explanation is that they are essentially just wealthier retail investors.
When Vitalik was playing World of Warcraft (2007-2010), I was playing another MMORPG - Lineage 2.
In Lineage 2, you could choose a race (human, elf, orc, etc.) and a class (warrior, mystic, etc.).
You could gain experience (XP) by completing quests and defeating enemies, and leveling up would unlock new abilities, better gear, and access to more challenging content.
I spent two years grinding intensely, sleeping only a few hours a day. These memories are deeply etched in my mind and have shaped my outlook on cryptocurrency trading.
Just as you gain XP in games, in cryptocurrencies you can gain XP by learning about blockchains, learning about DeFi, researching token economics, etc. The more you grind, the better you'll do.
But you have to watch your HP (health) and MP (mana). HP and MP are like your health, financial stability, and emotional recovery ability. Cryptocurrencies and games both require relentless effort, and you inevitably feel fatigued. In the cryptocurrency field, the pressure to stay ahead, constantly monitor the market, and not miss trends creates a high-pressure environment, like an endless game you can't quit.
In the last bull market cycle, I was exhausted, so now I manage my "HP" by taking a break for a few months every three months.
Viewing cryptocurrencies from this perspective, am I a bit strange?
There are also similarities in demographics: crypto games are male-dominated, just like MMORPG players, of whom only about 35% are female.
Koreans' obsession with cryptocurrencies is no less than their obsession with esports (like League of Legends), and even surpasses their obsession with "real sports".
What I want to say is that the mindset of gamers can help you stand out in the cryptocurrency field. You just need to choose the right game and understand your role in the game.
In Naval's famous short post "How to Get Rich (Without Getting Lucky)", he mentioned "game" and "play" 15 times! His advice is:
- Don't pay attention to those status game players, they gain status by attacking those wealth-creating game players.
- Choose an industry where you can have long-term cooperation with others.
- Play iterative games. All the returns in life, whether wealth, relationships, or knowledge, come from compound interest.
My favorite quote is:
Accumulating specific knowledge is like playing a game for you, but like work for others.
So, what game are you playing in the crypto field?
What role are you playing in the cryptocurrency?
In recent years, cryptocurrencies have become increasingly complex. Before 2020, success was as simple as investing in ICOs and trading on CEXs. Since then, the new games in the cryptocurrency field have exploded: DeFi, L2, Non-Fungible Tokens, Real-World Assets, Runes, Memecoins, and so on.
How do you keep up?
Are you specializing in a certain field or trying to "do it all"?
In MMPORG games, you first choose a race, then a class. In Lineage 2, I decided to choose the least popular option, because I wanted to stand out and increase my chances of becoming a "hero".
I chose the human summoner, and as I gained experience, I specialized in the warlock, then the archmage. This was the least popular class, as its specialty was using pets to defeat enemies.
Similarly, you can start by learning the basic skills of cryptocurrencies, and then you can focus on active trading, DeFi yields, memecoins, DAOs, and so on.
Many people lack the determination to learn specific skills, and often jump between different narratives without truly understanding them. They miss the knowledge required to master the complex mechanisms behind the game theory of a particular industry. They become exit liquidity.
In fact, jumping from one narrative to another while making money may be a special skill. You realize the money rotation game, and manage to sell at the top before the money shifts to another narrative. But are you good at this?
However, I believe that specialization can bring substantial rewards in the current market stage.
Specialization can be anything, such as:
- Crypto Koryo excels at Dune dashboard creation work and monetizing it;
- USD Denominated focuses on the stablecoin market, navigating its complexities to achieve the highest yields;
- Andy is fully immersed in the modular field;
- wale.moca focuses on NFTs;
- Bold Leonidas publishes a daily crypto comic.
But be sure to pay attention to what influential people say, as their motives are often different from what you might imagine. The game they are playing is different from the one they are promoting. You don't want to play games where the rules are not in your favor. For example, Ansem recruits celebrities and makes money in some way.
Why do you think I'm posting on X?
My purpose for posting on X is: 1) to stay up-to-date on the market, 2) to attract clients to my DeFi creator space Pink Brains, and recently 3) to build my influence and obtain token delegation votes.
This strategy allows me to explore multiple topics, even if I'm not an expert in any of them.
But as you start to grow your following on X, you should choose a field that you are passionate about. As your following grows, your topics should also diversify. Posting can increase your influence, so everyone should do it.
Becoming an influencer is like becoming a hero in Lineage 2. Your character will gain a special aura, which not only enhances your attributes, but also allows you to broadcast your information to the entire server. I chose the least popular role because the competition to become a hero was smaller.
Many of you work in cryptocurrency companies, and your work forces you to focus on roles like marketing, market making, or sales. This gives you an advantage over those who treat cryptocurrencies as a hobby: you can leverage industry relationships, gain insights, and even influence the rules of the game.
Specialization is now where the real alpha is hidden.
While holding BTC or ETH can provide steady returns, to achieve 100x returns, you need to dig deeper, just like mining for gold in a developed field. As Naval said, find work that feels like play to you.
Whether it's DeFi, on-chain wallet tracking, or hunting for alpha in DAO forums, let your curiosity guide you. By accumulating specific knowledge, you will discover opportunities that others have missed. This niche market is small enough to evade the radar of big players, but large enough to make you rich - the cryptocurrency game may be your gold mine.
