Original source: Wu Blockchain blockchain
This podcast starts with the investment hotspot of AI Memecoin and the recent surge in ACT. The three guests, defioasis, Maodi and Chen Yiyi, shared their investment experiences and lessons in cryptocurrencies such as ACT. Defioasis made a profit of 2 million RMB in just one week of building a position; Maodi sold his shares before listing on Binance, perfectly missing the opportunity to get rich. In addition, this podcast also includes a discussion of the market logic behind the surge in ACT, an analysis of community enthusiasm, chip structure, and how to evaluate the potential and risks of the Memecoin project. It also shares the guests' personal long-term optimism about ACT and the strategy of adding positions at a low level, the experience of "selling" on GOAT and ACT due to misjudgment, and in-depth insights into Memecoin investment from the perspective of on-chain data analysis.
Please note: The views of the interviewees do not represent the views of Wu Blockchain. Wu Blockchain does not endorse any products or tokens. Readers are requested to strictly abide by the laws and regulations of their location. Investment is the personal behavior of the interviewees and has nothing to do with Wu Blockchain work.
Reasons for buying ACT and the process of increasing positions in early October
Brother Mao: Defioasis, who made 2 million this time, will introduce the whole process of ACT incident.
defioasis: (The following is my personal Twitter post) To a large extent, the ACT wave is really luck and windfall for me personally. As of 6 pm the day before yesterday, I still placed an order on bitget for 0.021-0.022 and received ACT, and it was less than a week away from the first ACT purchase on November 5. I thought ACT would explode because of the AI Meme, but I didn't expect to wait so soon for Binance to list it on the spot, and ACT drove the general rise. (Of course, Binance also listed PNUT at the same time, but this was not in my initial consideration at all)
I analyzed and reviewed myself, trying to restore as much as possible why I bought ACT?
First of all, it is the recognition of AI Meme narrative. I think the earliest and largest AI Meme this year is WLD and TURBO. After TURBO was listed on OKX, it hovered around 3 million US dollars for a long time, with plenty of time to enter the market, and finally rose nearly 300 times in the secondary market. If I remember correctly, WLD's FDV once exceeded the fourth place in market value when it was at its highest, as OpenAI's meme narrative.
The logic of AI Meme is simple and profound:
AI outside the circle is rapidly iterating and developing, and is on the rise in technology and capital;
Meme is the hottest track in the circle. The hottest narrative outside the circle + the hottest track in the circle has great potential. The narrative of AI Meme will continue to iterate with the development of AI technology, and may be lagging or forward-looking. In addition, from the example of TURBO, a good Meme will have enough time to layout and enter the market, because the community also needs time to settle, which is consistent with my long-term logic of speculating in Altcoin.
Secondly, Binance launched the perpetual contract of GOAT, the leader of AI Meme. To be honest, I almost missed GOAT completely. But the news of Binance launching GOAT perpetual contract on October 24 made me pay attention to AI Meme again, because Binance has the ability to lead the track, and the logic of AI Meme is simple and profound.
In the last two or three days of October and the first few days of November, I made a watchlist and added 7 tokens: ai 16 z, degenai, ACT, LUCE, BAN, Shoggoth and CB. The overall focus was on AI Meme, and a few narrative memes that were popular at the time were added. Although there were 7 tokens, my first choice at the time was actually ai 16 z, ACT or LUCE, and then BAN was added. In fact, LUCE has never reached the position I want, and BAN paid attention to it a little later and missed the opportunity. The common point of choosing these tokens at the time was that in addition to the narrative being simple, clear and unique, the most important thing was that the market value was 2-3 kw, or it was believed that there was a chance of a callback to 2-3 kw. ai 16 z is the narrative of AI agent as a fund DAO and fund manager, and it carries the a16z meme; ACT breaks the black box of AI Agent; BAN is Sotheby's banana; LUCE is the Pope's pet. Here is a digression. The birth time of ai 16 z, LUCE and BAN overlapped very much. Originally, the narratives of these products were enough to arouse users' emotions. If they were taken separately, they probably should not have the market value level at that time, but unfortunately, they overlapped in time of birth.
I bought ai 16 z when it was at 0.025 USD. In fact, I gave higher priority to ai 16 z than ACT at first. However, ai 16 z fell below 0.01 and then rebounded rapidly, with great volatility. In addition, its liquidity pool on Raydium was small and the number of holders was relatively small (about 4,000 to 5,000 holders). In the end, I invested heavily in ACT, which was more stable and had a larger number of holders.
Third, after defining the market value range and watchlist, how to choose specific coins has to be based on the insights from Murad’s speech.
I watched some of Murad's speech videos three or four times, and we even did a podcast with Murad. There are a few points that I think are very important, of course, I added some of my own observations and understanding: a 70%-80% pullback in the 2-3 kw market value;
There is a large holder base; the number of holders is growing;
There are influential KOL on the timeline to do the promotion, such as the wizard
Especially the number of holders, I didn’t really understand this indicator before, and I thought it was very fake, but I saw the data analysis of Scopescan at the end of October: the average winning rate of the holder increase signal in Memecoin was 65%, and for some tokens this number even reached 90%. It was also because of this indicator that I finally chose the latter in the choice of ai 16 z and ACT.
Secondly, there are some bonus points, such as whether Memecoin is listed on a second-tier exchange, such as ACT is listed on Bitget, but ai 16 z is not. Listing on a second-tier exchange means a huge possibility of introducing market makers, and market makers are very important for Meme. And as the personnel of first-tier and second-tier exchanges flow between each other, their listing logic will be similar.
Finally, I seek a way to match my personal investment system with Memecoin. My personal core investment philosophy is to buy and hold the leading beta in the alpha track, sell at the target, and reduce the number and frequency of purchases. Friends who are familiar with me know that my largest core positions are ORDI and PENDLE Eco. I have not sold them since the second half of last year. And I have hardly made a big deal in the first half of this year. Of course, I have been playing memecoin with small money during this period, but it hardly helped me make any money. It was more about maintaining a keen sense of the track and narrative. In this process, I gradually figured out my own way to play Memecoin. Compared with the previous PvP, I will focus more on tokens with a market value of around 2-3 kw.
Of course, luck is still very important. I never expected that it would be listed on Binance suddenly. In fact, I was prepared to hold the position for several months. But I think some of my experience is worth referring to. A good Meme will have enough time to lay out. After experiencing the storm, 2-3 kw market value is the best for me. The number of holders is growing continuously. Buy and hold patiently. An interesting fact is that Murad has never been a PvP player. Although this logic also makes me miss those coins that are almost never going to have a big callback, such as GOAT, but in the end, I still have to do what I am good at.
There is another detail. When Binance announced that the price had risen to 0.2-0.25, group members were asking if they could still chase it. At that time, I noticed that there was about a 10% price difference between Bitget and the chain, so I boldly told group members to go in without worry, even if it was only 0.3 or above. I also chased the rise in that range, but I was actually very panicked inside. Even though I had reached the profit target of 10x, my style was indeed to ambush rather than chase the rise. A few minutes later, I felt FOMO, and I smashed most of the positions that chased the rise at the market price. In retrospect, although the logic and luck of this chase were good, I was actually very panicked when it fell, which led to very strange operations. When you operate in a way that you are not good at, you can't keep your temper.
Chen Yiyi: Actually, I was also selecting AI Memecoin targets. At that time, Long Yi was the GOAT, and Long Er had the highest core narrative, community, and trading popularity. However, there were indeed some problems with the public opinion of ACT at the time, mainly because the behavior of AMP caused dissatisfaction in the community. I remember that Maodi bought ACT very early and said "buy it" in the group, and then he sold it at a loss and then it flew up again. Later, I also asked Maodi in the group how he was doing? He said that the ACT community was very divided, mainly because of dissatisfaction with AMP's approach. At that time, I felt that the market was very divided, but the popularity remained high, and the FDV was not too high, so I felt that the timing was still right.
In fact, the entire market was focused on AI Memecoin at the time. If ai 16 z allocated a sum of money to invest in ACT, it might be a good start. I entered the market when AMP announced to the community that it would suspend the sale of coins, but AMP did not specify how much it held, nor did it clearly state how it would deal with it in the future. So in that chaotic stage, I built a position at that time. After they sold, the community was relatively confused. At that time, everyone was discussing whether the project party would continue to develop after all the positions were cleared. During the whole process, I was slowly increasing my holdings, which was a bit similar to the defioasis strategy, haha.
ACT developers' selling triggered a crisis of trust in the community and shared their experience of selling at a loss
Brother Mao: I was just the opposite, and became a reverse observation sample haha. Chen Yiyi said that when the developer could not guarantee how much he would sell in the future, he started to build a position in that chaotic stage. And I happened to start my first liquidation at that time.
Let me briefly talk about my recent participation in the Memecoin craze. I first bought GOAT, when its market value was about 200 to 300 million. Although it is not low, I felt that this Meme was quite fresh after reading relevant reports, and it was much more interesting than the various "cats and dogs" zoo projects in the past. In fact, the way I choose Meme is not to look at the on-chain data, which seems to be easier to analyze, such as holding addresses. Although the data is a reference for me, I choose Memecoin more based on my feelings, just as Chen Yiyi said, "I feel it." At that time, I looked at GOAT and thought that its combination of "AI+Meme" was quite attractive, so I started to enter the market. However, after entering the market, its price began to fall, but I bought more when it fell. Later, it rose to 600 to 700 million, and then Binance also listed its contract. The price reached 800 to 900 million on the day of listing the contract.
I think 1 billion is a difficult barrier to break through for a meme, 800 million or 900 million. Then I was thinking about how to choose the next meme, and that’s when I noticed ACT. In fact, I think the role of the wizard accounts for a relatively large proportion of the rise of the entire ACT community.
At that time, I learned about the ACT token, which seemed to be one of the two AI projects funded by a16z. After learning about it, I felt that this story was not bad and it was considered the second dragon. At that time, the price comparison showed that ACT was around 0.03, while GOAT was around 0.07 to 0.08. Personally, I think the first dragon is GOAT, and the second dragon may be ACT. It stands to reason that the market value of ACT should be at least 1/10 of GOAT, but it has not yet reached that point, so I started to increase my position continuously, buying more as the price fell. However, a very outrageous thing happened later, that is, the developer started to sell the coins. The community communicated with him and asked if he could not sell it first, lock up the coins first, and sell them in the future, but he could not be contacted. Later, he explained that he was attending his grandmother's funeral, not a wedding, but a funeral.
This was really outrageous, but the developer insisted on selling. The community communicated with him and asked him not to sell, but he disagreed and even said, "I have already sold 2%, and whether to continue selling depends on the community's performance. People in the community, including some core members such as Wizard, thought this was ridiculous. That night I also felt that it was too much, so I sold all my ACT. At this time, Yiyi started to enter the market and took over my order at a super low price. Then, from the perspective of on-chain data, he thought the project was still good.
Later, I couldn't help but start buying ACT again and building a position again. I remember that my first re-opening was around October 23, when the market value was about 30 million US dollars. At that time, I thought the project was not bad, so I bought some at a market value of about 20 million US dollars. On November 8, three days ago, I suddenly felt that the craze for AI and Meme might be coming to an end, and that a new market in the VC field might be coming, so I decided to move some funds. Unexpectedly, Binance actually listed ACT today. So, although I participated in it early, not only did I not make any money, but I also sold ACT twice.
The logic of long-term holding of ACT: Opportunities of low-market-cap Memecoin
Brother Mao: Then I have another question for the two seniors who have already made money. From my perspective, many Memecoins will eventually die, especially before ACT is listed on Binance, why do you dare to continue to increase your holdings of ACT?
defioasis: First of all, I have always been paying more attention to Memecoins with a market value of about 20 to 30 million US dollars. I think Memecoins in this market value range are the most suitable to hold, because if it can be maintained in this range for a long time, it usually means that it is relatively safe.
Like the AMP incident mentioned by Maodi, I think the AMP coin sale event actually brought a good opportunity for ACT. At that time, I watched Murad's video, which mentioned a point that a good Memecoin can survive even after experiencing drastic fluctuations, such as multiple drops of 70% to 80%. So why does it have such a big fluctuation? Usually it is because of special events in the community. For ACT, the AMP coin sale event is a very outrageous situation, but it has also become an opportunity for the development of the ACT community. People like Wizards have organized themselves and launched a counterattack against AMP on social media.
In addition, Maodi said at the time that the AI Memecoin track might come to an end, but I think it is just the opposite. I think it is precisely because of this difference in opinion that I still remain optimistic about ACT.
defioasis: My logic is this: Binance has launched GOAT futures, and I think Binance has the ability to open a new track. And I am very optimistic about the potential of AI in the crypto field, because AI technology has been continuously iterating and updating outside the circle. Just like the Memecoin market can continue, because in this circle, apart from Memecoin, there are basically no other opportunities to make money, so it will not fade away easily in the short term.
At the same time, the favor of outside capital for AI, the investment in AI technology and capital, plus the narrative of Memecoin in the circle, I think the combination of the two will bring great development space. Especially after Binance launched GOAT futures, I paid attention to the AI Memecoin track again, and I think this is an important opportunity.
Community activity and stake structure support ACT
Chen Yiyi: I think some of Maodi’s ideas are quite interesting. You can be used as a sample for research. I always think that Maodi is the biggest Alpha in this round. Do you know? Maodi asked me if he could buy GOAT when its market value was 300 million or 350 million. I said at the time that it had only been out for a few days and there was a probability that it could reach 500 million FDV on Bybit. If it was listed on Binance, it might rise to 600 million or 700 million, or about 1 billion. The odds were very average, only about 50% up, and there might be a huge retracement down. At that time, it was not certain whether the subdivision track of AI MEME was established, and GOAT might be a short-term hype. Considering that GOAT had only been out for a few days, I told Maodi that the odds were not good and it was not recommended. But Maodi still bought it. I think Maodi really has some vision.
Brother Mao: Not only did I buy it, but I also bought more as the price dropped.
Chen Yiyi: So I said that Maodi has something, haha. Actually, from my point of view, regarding the topic of AI Meme, many friends are paying attention to two major directions, one is AI and the other is PayFi. AI agent in the field of AI is one of the hottest narratives now, right? Many VCs and large institutions are participating in this field, and the market attention is very high, especially those with power in the circle are looking at this direction.
I think the core of the narrative is very important. Now the first and second dragons have been basically determined, which are GOAT and ACT. From the community atmosphere, whether it is positive or negative discussion, the heat is very high, and there are always people pushing and doing things. So I think AI Memecoin is a very niche and noteworthy track in the Meme sector, especially after the new concept of AI agent comes out, everyone is also happy to hype such new things.
In addition, one point I have been paying attention to is the chip structure. For the chip structure, I don’t just look at the on-chain address data on Solana, because this data is easy to brush. Many exchanges will check the dispersion and control level of the project before going online. If the project is highly controlled, unilaterally rising or falling, the exchange generally does not accept it, because they prefer relatively dispersed chips to prevent the project party from easily manipulating the market.
Therefore, I am also very concerned about the sales data of AMP and the status of related addresses, including some subsequent funds entering the market. I admit that there is indeed some speculation in this, but in general, I think AI Meme is a niche and potential track that deserves priority attention and screening targets from it.
Another interesting point is the CultDAO project we mentioned earlier. I think that money can be used to promote some small projects. If ai 16 z invested in ACT, it would be a very good explosion point.
defioasis: Yes, I would like to add one more thing. I forgot to mention the growth of the number of holders. I used to think that the growth of the number of holders was useless because it could be faked and a bunch of low net worth addresses could be used to make up the number. But then I found out that, as Murad mentioned, for Memecoin, the number of holders must be in a state of continuous growth to have a higher probability.
In fact, when I looked at the status of ACT in AI Memecoin, I first saw that the number of addresses holding ACT was relatively large. The second point is that after the AMP incident, the number of addresses holding ACT is still growing. So from this level, I think it reflects the activity of the community, indicating that the community is promoting and exerting efforts, which can also be seen from the growth in the number of holders.
Cat Brother: Oh, it seems that you two have a consensus that ACT can indeed be regarded as the "second dragon" before it is listed on Binance spot. However, the reason why I sold at a loss at that time may be that there was a disagreement here. I also looked at some on-chain data at that time, but found that not only GOAT and ACT were growing, but also other projects like Octopus and GNON. Looking at the growth of on-chain addresses and the voice of the community, I think ACT may not be regarded as the "second dragon", at least there are many competitors with similar market capitalization and number of addresses.
Chen Yiyi: You know that ACT has a16z’s narrative, right?
Maodi: Yes, from now on, this is indeed the case. You mentioned that defioasis also bought the ai 16 z project. During that period, there were indeed many AI Meme projects, including ai 16 z. So do you think it is really related to a16z? Now, considering this as the reason for "Dragon II", it doesn't seem to be such a strong reason. What do you think of this situation?
Maodi: The reason why I sold at a loss was that I felt that ACT might not be the so-called "second best". At that time, it had many competitors, and I couldn't tell who was the second best, so I just gave up. I even considered waiting for GOAT's price to drop before buying it, because at that time GOAT was still relatively certain to be the first best. Looking back now, it may be because of the background of a16z that everyone has the impression of the second best. How much role do you think a16z has played in the development of AI Meme?
Chen Yiyi: I think this is because Marc has been calling him GOAT, and the binding relationship is very clear, so the relationship between GOAT and a16z is relatively close.
Cat Brother: But he didn’t shout ACT.
Chen Yiyi: They didn’t call it ACT, but they did invest in ACT.
Maodi: Yes, in this case, a16z has still sparked a lot of discussion and emotions at the community supply level.
defioasis: This is a comprehensive consideration. First of all, a16z has only invested in two or three AI projects, and only two of them are directly related to ACT. In addition, under the premise of the growth of the number of holders, I think the first thing to pay attention to is the scale of holders. For the AI Memecoin track, the scale of ACT holders is its base, and the scale itself is relatively large.
Brother Mao: I remember there are probably more than 10,000 holders.
defioasis: Yes, the number of ACT holders is still growing. In comparison, I have paid attention to some other AI Memecoins, such as Shoggoth's project, whose holder base is obviously much worse than ACT. In addition, other AI Meme projects have not received investment support like a16z. Look at ai 16 z, why is it called this name instead of another one? It is because this track has the background support of a16z, which is also a meme.
Cat brother: From another perspective, why not call ai 16 z "Dragon II"? How do you understand this question?
defioasis: Actually, I didn't bother with the question of Long Er, but I can explain it. I mentioned earlier why I chose the latter between ai 16 z and ACT. I also bought ai 16 z at a price of 0.025, but its fluctuations were very drastic, rising from 0.025 to 0.03, then falling to 0.01 or even lower, and then rebounding quickly. In contrast, ACT has smaller fluctuations and is more stable. The pool of the ai 16 z project is smaller, so its volatility is also greater, which is one of the sources of fluctuations.
In addition, in terms of the number of holders, among the projects with a value of 20 to 30 million USD, the number of holders of ai 16 z is relatively low, only 4 to 5 thousand, while the number of holders of ACT is at least two to three times that. This is one of the reasons why I decided to invest more in ACT.
Chen Yiyi: After AMP was liquidated, the community released a chart showing the changes in the number of holders, comparing the changes in ACT holders with other popular projects at the time. This actually reflects the community's responsiveness and energy.
Maodi: Yes, I saw it too. That picture is indeed a good reference.
Chen Yiyi: After AMP was liquidated, the community responded quickly and quickly reversed the situation in the crisis. At that time, the price on the chain fell by more than 30% in a short period of time, but the community quickly stabilized the community's clarity by comparing the trend of ACT Holder changes with other popular projects such as BAN, turning the sale of AMP into a certain degree of positive, weakening the panic and consensus caused by the decline in ACT prices. This shows that the community really has the ability and strength to do things.
defioasis: Well, this is also consistent with Murad's point of view. A good Memecoin can still recover even after a 70-80% drop. ACT is a good example of a project with strong resilience.
Cat Brother: I totally agree.
ACT's market positioning and controversy as the second dragon
Chen Yiyi: The projects you mentioned, such as Octopus or GNON, are actually often heard in the community from ACT and GOAT, so I think these are the real leaders.
Maodi: It is, but I also fall into a kind of "information cocoon" suspicion. Because I held ACT at the time, I would search for content related to it on Twitter, and the algorithm would push a lot of ACT information to me. I think this is an information cocoon effect. If I hold other tokens and search for related content, the algorithm may also push positive information about the token to me. So sometimes, data growth and community solidarity do not necessarily mean success. I can give a counterexample, like ARC-20 or Atomicals projects, not all projects with increased community popularity and address numbers will achieve good results.
Chen Yiyi: Yes, judging from some surface data alone, there may be deviations. To be more accurate, we still need to go deep into the community, understand what they are actually doing, and even keep close contact with the core builders of the project or pay attention to what they are doing.
In fact, before ACT was listed on Binance, many people were still on the sidelines and did not have a deep understanding of the community's progress. Now ACT has skyrocketed 20 times, and it can be said that it has gone out of the circle. Yesterday, I complained to my friends that the whole market was rising, but ACT was falling... Cat Brother: I was glad that I cut my losses at that time.
Chen Yiyi: Some things can only be judged by vague feelings. You know they are doing things, and you see the on-chain data reflecting that the project is getting better, but the consensus of funds is not as strong as other larger conspiracy group projects. I think that through the core builders, observing their ability to solve problems or pull resources, you can better evaluate the project. Like PEPE and PEPE 2.0, I still remember when PEPE 2.0 opened Space, there were thousands of listeners, and many people urged to make a dashboard for PEPE 2.0.
At that time, I felt that the market had a demand for projects with new narratives. GOAT, for example, did not catch up with the market, and some people were looking forward to the next GOAT 2.0. In this case, ACT, which is endorsed by a16z and has a similar narrative to GOAT, is very attractive, and has a lower market value. There is also a group of capable members in the community who are promoting it, and with the potential funds of ai 16 z, I think ACT has a good market position.
defioasis: Overall, this is the case.
Brother Mao: You mentioned PEPE 2.0 just now. Do you think the subsequent market trend of ACT will follow the trend of PEPE 2.0?
Chen Yiyi: I think Binance has already launched ACT, and it has basically moved towards that trend, and many people have made money.
Cat Brother: Do you think it has room for a market value of 600 million or 700 million? Or does it take time?
Chen Yiyi: It will definitely take time and there will be a lot of turnover. I think in the short term, some mainstream exchanges may still have some room for growth, but how should I put it, at least they can hit the previous high of GOAT.
defioasis: Yes, let’s observe first. I think it’s a little early to compare with PEPE, so it’s better to compare with Neiro first. In fact, in this wave, PEPE and Neiro are representative, and Neiro’s current market value is only 1 billion. In comparison, I feel that the price of ACT in the short term may be a bit high.
Maodi: In the short term, the price is already a bit high, although the current market value is only around 500 million.
defioasis: Yes, I added the position at 0.25. I was indeed a little hesitant. In fact, when I checked the on-chain data, I found that there was a 10% price difference between the exchange and the chain, so I didn’t think it was a big problem, even if I took 15%. However, after buying it, I sold most of it. I invested 100,000 U at the time, but I felt that the position was a bit too heavy, so I quickly sold another 70,000 U, which made me feel more at ease.
Brother Mao: I understand. I also want to share the reason why I chose to sell at a loss the second time. Although Chen Yiyi recommended that I hold ACT, I also know that it is rare for Memecoin to be revived from the dead, which shows that the project is of good quality. But the reason why I chose to sell at a loss is that the position is too heavy and the risk is too great for me.
defioasis: Yes, sometimes having too heavy a position can be unsettling.
Chen Yiyi: That’s right.
Brother Mao: From a probability perspective, only a few of the projects with a market value of 10 or 20 million yuan will eventually survive. It is possible that a few out of ten projects will die. I also invested dozens of them in Solana at the time. If all of them lost money, the loss would be huge. Besides, Brother Mao is not rich, so I chose to sell at a loss in the end, haha. At this time, it is difficult to hold on.
defioasis: This does involve a question of faith. The information cocoon effect you mentioned is actually because you keep searching for relevant content, and the algorithm keeps pushing relevant information to you. Why do you keep searching for it? In fact, it is because you have doubts about the project and want to keep track of the dynamics at any time. You need someone to shill, which means that you are still a little undecided in your heart.
Brother Mao: Yes, I am indeed a little undetermined.
defioasis: This shows that there is still uncertainty in my mind. My personal strategy is to hold firmly after buying. Of course, I didn't expect ACT to rise 10 times or even 20 times so quickly. Even if it didn't rise so much, I would be willing to hold it for three to four months because I am optimistic about it.
Chen Yiyi: I want to refute it. Actually, I am not refuting this point of view, but I am saying that you may not have placed such a heavy position. You see, defioasis chased the rise yesterday and added 100,000 U, but later felt that the increase was a bit too much, so he sold 70,000 and kept 30,000; Maodi sold his position after a heavy position. What I want to say is that if the position is too heavy, it is easy to deform the operation.
Cat Brother: Yes, ACT is undoubtedly a peculiar case.
defioasis: Even though I did have some profits before, I would still hesitate to add to my position later.
Memecoin’s high risk and target selection strategy
Brother Mao: Actually, the reason I invited you here is not to promote ACT, but to make everyone aware of the high risk of Memecoin. I am a case of a person who suffered a loss even though ACT increased 20 times, which just shows the investment risk of Memecoin. Especially in the AI Meme track, the PVP situation is serious, and it may double in the previous second and return to zero in the next second. This situation is quite common. So, if you are looking for the next project similar to ACT, from what perspectives will you choose the target? Let defioasis share first.
defioasis: First of all, I will still choose from projects with a market value of 20 to 30 million US dollars. There are several main criteria. First, if a project has risen and then dropped by 70% to 80% and can still survive, and maintain a market value range of 20 to 30 million for a period of time, this project is relatively stable. Second, we must also pay attention to the trends of exchanges. For example, the reason why I re-focused on the AI Memecoin track is because I saw Binance launched GOAT futures. I think Binance has the ability to lead a new track, so I will focus on its selection.
In addition, when a second-tier exchange lists a similar Memecoin project, this is also an important signal. Second-tier exchanges can provide a good exposure platform for projects, and the flow of listing personnel between second-tier and first-tier exchanges is also very close. Someone may stay in a second-tier exchange for a period of time and then jump to a first-tier exchange, so that the experience accumulated in the second-tier will also be brought to the first-tier. In the end, it depends on the trend of the track itself. At present, the hottest field is still the AI field.
I think AI is a sunrise industry that is in a stage of continuous development and iteration. AI Memecoin has also experienced several waves of development, starting with Worldcoin around OpenAI, then the Turbo project triggered by GPT-4, and later more AI agent trends. These projects are constantly evolving, reflecting the rapid iteration of the industry. So this is the main idea behind my project selection.
Chen Yiyi: Haha, what defioasis shared was his experience in selecting coins and his views on the future development of the AI Memecoin track, which is also great. But back to Maodi’s question, I often joke with Maodi that everyone can see good things at a glance, such as seeing a beautiful girl on the street. If the three of us think she is beautiful, then she may really be beautiful; but if only the two of us think she is beautiful, and defioasis doesn’t think so, then there may be a disagreement, haha.
In fact, this is a realistic problem. When a project narrative comes out, what is everyone’s first reaction? For example, before, everyone might think that the narrative of the project BAN-"Banana" is very good.
Chen Yiyi: Back to the topic, I personally think that, as you said, "feeling it" is very important, or by observing many Meme projects, you can have a general understanding of the narrative trend. Meme projects are actually divided into many tracks, such as zoo series, mascots, artworks, and now AI Meme, which are all different sub-fields. Finding leading projects in the sub-fields is the first step, that is, finding projects with strong narratives. The second point is to recognize some key nodes of traffic distribution, which I think is very important.
Why do people want to build good relationships with KOLs? The purpose of participating in offline meetings and social interactions is actually to establish connections with these influential people, because traffic is often distributed from them. Various communities and coin holders are influenced by these influential people. For example, many people today pay attention to the news of Formula and prepare to snipe Binance announcements because of the importance of these traffic distribution nodes. Just like Formula released a news, buying in two seconds made a profit of several million US dollars. Today, my friend operated next to me and bought in four or five seconds after the news was released, and doubled his money.
Therefore, to obtain these traffic distribution resources, you need to get closer to the community and influential KOLs.
Of course, like defioasis, if you see the price retreat but the project is still alive, it is also a good logic to choose to intervene in the second wave, provided that you are sure that the project has potential in the track. Even if the first wave of people withdraw, new players will still be interested in its narrative. For new early projects like this, I personally would choose projects with a market value of around 3 million FDV, and leave after a wave of growth. If you want to choose some more certain targets, you may not have enough time and energy to pay attention to all early projects, so choose projects with FDV of 10 million to 20 million like defioasis, and gradually buy them when building a position instead of investing all at once.
I usually try to avoid chasing high prices. There are always opportunities in the market, and projects such as GOAT, BAN, LUCE, ACT, etc. continue to appear. For example, there are Moondeng and NEIRO before, and basically new projects emerge every few days. The current market is rising overall, which raises a question: Does the market really have enough funds to support the growth of these projects?
In addition, there are still many small-cap projects in the market, such as projects with a market value of around 20 million. You can also pay more attention to them. The community may also speculate on Binance’s recent listing strategy through the timing of Binance’s launch of lowercase Nerio and ACT, and may use projects in this valuation range to create a wealth effect.
defioasis: This is why I think Memecoin, with a market value of 20 to 30 million, has great potential. Projects that have survived multiple sharp declines may have greater room for speculation in the future, and exchanges usually prefer projects that have experienced multiple chip changes.
Cat Brother: Okay, this podcast ends here. At the end, I would like to remind everyone that the content shared today does not constitute investment advice. This podcast is mainly because ACT suddenly increased by 20 times, so we made a light-hearted sharing, purely based on personal experience. Everyone should still invest cautiously, especially in high-risk tracks such as Memecoin. Thank you for listening.
