Source: Twitter @YeruiZhang
Over the past year, I have written many articles, and today I have the time to integrate these scattered words and provide an overview of what has happened in the market and how to respond to it. This will also be my CT top post for the next period.
First, I need to emphasize the two core indicators I have been focusing on in this cycle:
The first is the reach, or Attention, which I believe can be used as a benchmark for the existence of Narrative in the previous cycle. Due to changes in market structure, the VC/TVL that VCs rely on for survival has become ineffective for pricing expectations and market making, and the price game has returned to the simplest buy-side game. Therefore, how to reach more communities, more retail investors, and convert them into buy-side is a problem that all projects need to consider. So at the beginning of this bull market, I proposed the concepts of "conspiracy" and "positive strategy".
This long article was written in early November, starting with the definition of the concepts of "conspiracy" and "positive strategy", and then using Cheems as an example to explain the most basic methods of gaining attention and increasing reach. Recently, Kaito's Yap is the best manifestation of this logic, especially in their change of the content discovery mode on CT.
The other is the quality and speed of ecosystem asset issuance. At the beginning of the year, I mentioned that all ecosystems need to use assets to gather communities, with ETH relying on Eigen at the beginning of the year and DeFi at the end, and Base recently relying on Virtual, and the theme throughout the year for SOL was MEME. After all, the best community model in the crypto world is similar to a cult, and in 2021, all public chains and DeFi33 platforms found their core users through the appreciation of token prices and mutual brainwashing of the community, and then expanded outwards. Most of the projects that can be calculated by PS/PE are unlikely to reach a market cap of 100 billion, and the mathematical problems that can be solved with a pen in the crypto world have a ceiling. The core reason why public chains do not die is that you never know when a new faith community or a popular ecosystem will emerge.
In the crypto world, assets are king, and the one who can hatch more and higher-quality assets faster can occupy the center of market discussion. From the perspective of public chains, if ETH is a feature film, then SOL is a short video. The former may have more substance, but in the era of high traffic, no one is faster than the TikTok model in issuing assets, and the more assets issued, the more user reach obtained, the closer to success.
We have discussed the solution to VC tokens before, and I think the focus going forward will be on two parts:
1. Currently, the only one that can generate market appeal is a16z, for the simple reason that they have real money. a16z represents huge checks and exaggerated valuations, and with money comes the expectation of market manipulation, and with exaggerated valuations comes the attention of the market. So for projects other than a16z (note not CSX incubator!), the focus should be on how the project builds the community, how it gathers community power through social farming, pitch exchanges, and the performance after launch (whether it benefits the community and becomes the last one to drag down the price). All three points require establishing a large number of communication channels with the community and reaching more new communities.
2. Focus on the projects that have successfully reached the community, and who can establish the fastest and most effective asset issuance system, and then calculate like crazy, because in the early stage of ecosystem issuance, the project party needs to release a large amount of resources to support the community, which is the PVE stage. Seize this opportunity, when there are not enough people calculating, grab the money first.
After talking about VC tokens, let's talk about the hottest MEME in this cycle. First, my logical basis is that MEME is no longer just MEME:
1. MEME will not be a flash in the pan, but a return to the most essential thing in Crypto - a way of asset issuance and community cold start.
2. MEME has evolved into a new way of asset launch, and the assets may continue to iterate, but the essence of Crypto is to issue more assets, find more interesting angles, and hype up new assets that cannot be valued. From this perspective, MEME will be hard to extinguish.
3. The MEME ecosystem has entered the next stage of group warfare, whether it's a16z, Virtual, or Bio's http://Dao.Fun, these top players have evolved from the single-point Application layer to the Infra, the new generation of Infra.
First, let me talk about my change of mindset. I used to be pessimistic about MEME and Pumpfun, but in just a few months, they proved me wrong. I took some time to summarize, and I think the development path of MEME is as follows, welcome to correct me if I'm wrong.
1. The earliest MEME must be issued by the ecosystem itself, going back to the end of 2023, the earliest Bonk appeared with the SOL mobile, and Silly dragon was closely related to the Christmas theme. Foundation prototyping, similar to the early ETH DeFi in 2017.
2. The second wave is the core circle Dev, at the end of 2023 when the SOL native token price soared, the top DeFi and value token ecosystems exploded, the community began to look for new assets, and some early SOL-based DEVs started to issue MEME, including Wif, etc. Core DEV launching, similar to ETH DeFi in 2018-2019.
3. The first MEME cycle, in 2-3 months, MEME rose across the board under the leadership of PEPE, and WIF in the SOL ecosystem quickly reached a 3B market cap, raising the ceiling of the entire ecosystem, then there were Bome and Slerf, two representative "speed-through" (referring to extremely rapid short-term price appreciation) cases, which locked the external Degen capital firmly in the SOL ecosystem. The first big explosion, similar to the DeFi Sez.
4. The most important thing about Pumpfun is that it set a standard through the standardized issuance tool, first issuing cats and dogs on a large scale, such as Michi. Then cleverly seizing the political hotspot around the election, they mass-produced a batch of 10-100M assets, with Pnut being a typical example. A large number of various types of assets brought a lot of popularity, and the more popular it was, the more DEVs were willing to issue new assets, and the ecosystem began a positive feedback loop. It can be said that Pumpfun drove the second big explosion, similar to the situation of ETH DeFi in early 2021.
5. The SOL foundation began to move out of the political meme, starting from October to incubate AI track projects, and later Tiktok and Desci track projects also emerged. Especially in the AI track, from Goat to Ai16Z, MEME is gradually becoming a way of asset issuance rather than just an asset itself. All things can be MEME, MEME represents a form of asset representation that is open source/permissionless and can seamlessly interface with the outside world. Through Pump Fun, not only MEME, but also a large number of AI research results and open source project tokenization were issued, becoming a new type of permissionless asset form, and achieving sublimation.
When MEME reached stage 5, the creativity of the market was unleashed infinitely, because it liberated a group of wild developers who were not in the mainstream discourse power system in the past two years. In the VC-dominated system, they could not effectively obtain VC financing due to lack of resources and connections, and could only develop quietly. But in the context of the big asset wave, they were the first to seize the opportunity by virtue of their wild and faster adaptation. For example, Virtual was the first to catch up with the AI Agent story when it happened, and benefited from its accumulation on the Base chain, it quickly became the number one ecosystem of Base. Similarly, Base is also a chain that is not favored by the VC system - it cannot provide token holdings for the first beneficiaries, and cannot offer a penny of grants compared to the sky-high incentives of OP and ARB. But it is the combination of the chain not favored by traditional logic + the developers not favored by traditional logic + the excellent retail base of the Base chain that created the legend of Virtual.
MEME may not be fair because there may be conspiracy groups and strong market manipulation, but the gameplay of MEME is similar to ICO, giving the community and retail investors a chance to collide with the existing interest system, which is also the core reason why everyone is willing to play MEME.
I don't think this batch of MEME ecosystem has entered a stable period. I believe that in the next three to six months, their valuation system will be able to benchmark public chains. On the one hand, they have established their momentum, and they all have their own ways to reach more users, such as AIXBT for Virtual, and Shawm's CT for a16z. In addition, they can attract enough teams who were frustrated in Crypto but have the ability and understanding to build on the ecosystem, by issuing MEME through such ecosystems, which only requires good creativity and understanding of market hotspots.
Isn't this just like building the Infra tech stack and waiting for developers to come, like the iPhone moment? In my view, Mass Adoption has already arrived.How to participate in it?
1. For players with more capital but less time, I think the gameplay of these MEME ecosystems will be very similar to the public chain ecosystem, except that the indicators we used to see were TVL, but now it's more about volume and Mindshare, which is where new tools like Kaito's Yap become very valuable.
2. For players with more time but less capital, since the on-chain opportunities are expected to continue, it is important to participate in early opportunities, try to understand the narratives, and follow the flow of Smart money. Here I am more optimistic about GMGN, as a new generation of on-chain exchanges, combining charts, Smart Money monitoring and fast trade execution, it is a very good tool for hunting.
As I write this, I have some further thoughts, which I cannot guarantee 100% accurate, but are for reference only.
1. In today's saturated Infra, only three types of VC projects can survive: those that guide the mainstream market narrative, such as Polymarket; those that provide services for existing on-chain ecosystems, such as Pump Fun; and those that can convert users from outside Crypto into Crypto, the scenarios and PMF of the latter two will be very important, while those that simply carve out narratives will have a hard time surviving.
2. The MEME issuance model is to more easily gain market attention through an initial burst, as there are more benefits to be distributed. But because the early coin price determines the sentiment, any misstep in operation will result in a complete loss, which is also the reason why the difficulty of MEME projects worth 30M to hit 100M is very high. In contrast, VC projects can price during liquidity shortages and only need to get exchange buy orders. The difference between the two is huge, with the former being front-difficult and back-easy, and the latter being front-easy and back-difficult.
3. Going forward, there will be more wild developers joining the battle, and they may even attract many big shots from the open-source Web2 community, after all, who doesn't want to make quick money? At the same time, there will be more technical projects launching in the form of MEME, perhaps introducing VC elements after succeeding.
