Written by Alan YW
1. What is the ecological chain of the crypto?
This industry is like a pyramid, divided into three layers, upper, middle and lower, and each layer is divided into three levels. Want to climb up? Not so easy. If you want to rush from the fourth layer to the third layer, you basically need the big guys in the second layer to pull you hard. To squeeze from the seventh layer to the sixth layer? You also need people from the fifth layer and above to pull you up. That's the logic.
Upper three floors: players
The first layer: the big players on Wall Street. These people started to enter the market after 2020.
The second layer: giant exchanges like Binance and Coinbase, and top incubators like A16Z. A16Z invests tens of millions of dollars in projects, sometimes hundreds of millions. Why? They raise money from LPs, and they have to spend it to continue to get management fees, so they can only make bigger plans.
The third layer: the top funds we can see, the most powerful exchange in South Korea, the bosses of exchanges like Kucoin at the next level, and some big bosses from big funds.
These people are responsible for making rules and creating hot spots. Deepin in North America and the entire DeFi in 2020 are their masterpieces. Then they spread it through their subordinates.
Middle three layers: microphone
The fourth layer: large incubators that everyone can access, such as Pantera. There are also some bosses of top-tier quantitative funds in the second tier. To gain a foothold in this layer, you need at least 100 million US dollars in cash.
The fifth and sixth layers are basically going down level by level. The fifth layer is the younger brother of the fourth layer, and the sixth layer is the younger brother of the fifth layer. They are all incubation series funds, as well as exchanges at various levels.
The sixth level is the final destination for most retail investors. They may be directors of large funds, with tens of millions of dollars in their hands, some influence in the circle, and their own fan base.
These three layers are responsible for passing the concepts above to the leeks below.
The next three floors: Leek concentration camp
Ordinary retail investors and C-end users are responsible for taking over.
This is how the entire industry operates: the upper level creates, the middle level passes on, and the lower level takes over.
Eastern and Western Capital: Two Worlds
What’s interesting is that Eastern and Western capital are two parallel universes in this market. For example, starting from October last year, Eastern capital was working on Bitcoin’s second layer and derivatives, while Western capital was working on Deepin.
The problem is, these two concepts don’t buy into each other. Binance doesn’t care about the second layer of Bitcoin in the East. Only one MouseBit is listed on Binance, and one Merlin is listed on OK. OK is a level lower than Binance, you know. Without the support of Western capital, this plate cannot be expanded, and Eastern capital cannot take over for the second time. The same is true for Deepin in the West. Eastern capital was not allowed to enter the market in the first two rounds of financing, and only a small number of them were allowed to enter in the third round. The result? The communication chain was broken, and Eastern retail investors could not take over. IO did have people digging, but few people actually took over the project.
If the third layer is used to make something, then the world will be united. Binance will definitely take over the whole business first and will definitely be listed. How many subordinates does Binance have? They are all over the world. This is called integration and opening up the Ren and Du meridians. Arbitrage opportunities? Yes, but it is difficult. If you can break through this information barrier, the money will come. For example, if you want to sell the concepts that Chinese people have played out to death in Korea, what do you need? Know the rich people in Korea. Let them pay for the concepts that are left over from other places, and then find a group of local leeks, and you're done.
Sounds easy? Actually, it's as difficult as climbing to heaven. This industry is very closed. You see those people attending conferences everywhere, but it's actually useless. People in a circle hang out with people in the same circle, and outsiders can't get in at all. How to get in? It depends on your ability.
So, this industry may seem flat on the surface, but in reality it is clearly hierarchical. It is not difficult to earn tens of thousands, hundreds of thousands, or even millions of dollars here, but if you want to make money lying down? Then you have to climb up and cross the hierarchy. This process is very painful and requires you to leave your comfort zone.
Want to do well in this industry? Don't just get to know a lot of people, drink some wine and listen to some big words. The key is to establish deep connections with a few people. Everyone has a different logic for making money, you have to find the one that suits you.
2. How to learn and enter the circle?
To do well, you must be interested in this industry. Don't just do it for the money, or your ceiling will be low. This industry is huge, and you will definitely find a part that interests you. Once you find it, go and try it.
This is an industry with a long-term effect. Find something you are interested in, and then find a big guy who can make money in this area, and connect with him. People like to help those who are on the same path as them.
I am at the fourth level, and I know many big guys at the second and third levels. They are not pretentious, and I am not pretentious to those at the fifth, sixth, and seventh levels either. We are all young, so we can talk about anything. This is the good thing about this industry, there are many directions, people are pragmatic, passionate, and have faith.
If young people want to enter the crypto quickly, they should go offline. Every venue has a conspicuous bag to see if it is positive or negative. Some people know a lot of people, but they all think they are idiots. There are many such people. Some people can mix in big and small venues and can pass on information. Such people will go far in the future.
If you are looking for a job, it is recommended to go to important positions on the fourth, fifth and sixth floors, or those who can reach important positions. It is better to go to the fourth, fifth and sixth floors than to go to marginal positions on the third floor. Those small exchanges on the seventh floor, KOL assistants, etc. are not interesting. When looking for a job, first look at the boss, make sure he is rich and has achieved great results. Those who get arrogant after making tens of millions are pure idiots. Being an employee is okay, but it is far from being a boss.
No matter which direction you go, you must quickly find a big guy who has his own model, or a young person like you.
3. What is the relationship between the token model and investors?
When you start a project, you need to understand that investors are in the same group with you at the beginning. They invest money to make money from the exit, and you issue airdrops to meet operational targets. These are two different things: one is the entry and exit at the capital level, and the other is how to do it at the operational level.
Why can some projects airdrop on Binance? Because they have the resources to get Binance! You have to understand the money and the relationship. They first got Binance and had a huge user base, and then designed the airdrop model. It is not that they first airdrop to attract users and then go to a big exchange. This logic is the opposite, you have to think it through.
So, what is the conclusion? As long as the powerful people recognize you, the project is not far from success. So what should we do? Put the interests of early investors first! Make sure those who support you make money. Remember: the money of the gentry is divided into 30% and 70%, and the money of the people is returned in full. This is your first principle.
How to do it? Mobilize the enthusiasm of investors, tie them to your chariot, and expand your influence. It's not just about airdrops, but also about being able to paint a rosy picture. Whether you paint a rosy picture for investors or users, it depends on your level. You need to practice your operational capabilities, or find a good operator.
After the pie is drawn, more unknown capital will come in. But remember the rules: the person who directly invests in you cannot cut the profit, but the person he introduces can cut the profit at will. This is an unspoken rule and must be followed. The cuts between introducers have nothing to do with you because there is no interest involved. Even if I introduce a friend to you and cut the profit, my friend will not blame me. He will not give you money just for my face, and he must have made an in-depth investigation before investing. You have to figure out who can cut the profit and who cannot cut the profit.
When you have grown your business, you will serve everyone around me well, and then you will only cut retail investors. Do you know retail investors? Do they know you? What does it have to do with you if people who have nothing to do with you lose money? People who play Crypto have spare money, such as playing with 1 million out of 10 million, or playing with 1,000 out of 10,000 a month. It doesn't matter if they lose money. After all, there are few people like Liangzi who lose everything, and they are not considered human beings.
If you want to cut off, cut off this kind of people, don't touch the first layer of relationships around you. In short: try to protect the interests of the people around you, make more friends with rich people, and cut off the people around them. This is the right way.
4. User relations and investor strategy?
If user relations are not handled well, no one will care about the coin once it comes out. For example, if the airdrop expectations of AI coins and mining coins are not handled well, no one will buy them when they are launched, and the products will be sold out very quickly. This will not even satisfy the early sponsors.
Let me take the projects on Binance as an example. I don’t understand the others. For example, BounceBit. Our company values the restaking track and has invested a lot of money in it. But the ratio BounceBit gives us is pitifully small, only about 100U per bitcoin per month. What does this mean? The project party did not use a lot of money to receive airdrops, so there must be money in hand.
What do retail investors think? They think the project owner is stupid and gives too little, so they don’t want to play with you anymore and sell them like crazy. But we insiders know that the project owner has money to take over. When the emotions are right, they buy a lot at a low point.
What can early VCs get? They can know exactly how many chips the project side has, how much cash it has, and which of the published tokenomics are fake. As a VC, you will definitely prepare more money to buy at the buy the dips in the secondary market and know when to buy.
Let’s talk about TIA and TICO. We invested in both. TIA was hyped up to 3 or so U in the OTC market, and retail investors must have lost money. Why? The price in the first round was only 0.015, which was too much of a difference. So where would the price be? It would be around 1-2U, the benchmark price in the OTC market. When it was lower than 2U, we increased our positions crazily and bought millions of US dollars. Later, it rose to more than ten yuan, and we made tens of millions of US dollars. This is called giving an explanation to the project party.
Investment is a continuous process. If you don't invest, you don't know that the first round is 0.015 and the second round is 0.5. Only by investing can you get insider information. Mature investors should know where to make money, not that they have to double their money in six months. The key is how to operate when it goes online to make a profit.
If retail investors don't take the shares, it must be a problem with the marketing department, either the operation is not good or the resources are insufficient. It is impossible that there is a problem in the investment link. It is difficult for retail investors not to take the shares. The standard configuration of large incubators is to invest in media companies, have dozens of KOLs under their command, and control funds and act as LP funds.
We, the fourth-tier people, must become LPs of the third-tier funds. We invest $5 million for five years, can see financial reports, and have the right to make recommendations. This is what a large incubator should do.
If you have a small stake or are a newcomer, you can only target retail investors. You have to explore layer by layer and step into many pitfalls before you can find the methodology. Then use this methodology to take your money and team to socialize upwards and find a big brother to guide you. This is the correct positioning.
Don't go looking for KOLs one by one, and spend hundreds or thousands of Us. If you spend all your money on publicity, you will have no money to pull the market and do things. How can you explain to the investors? Taking money from people around you when you are immature will definitely fail.
5. How do young people break out of the siege?
Most of today's college students think, "I must work hard and try my best to complete the tasks assigned by my leader." But in reality, this is very different from our time.
When we first came out, we didn't have much money! The subway cost three dollars, and the bus cost one dollar. I would rather get up an hour earlier just to save those two dollars. I could bear not to eat to save a little money. Your generation has not experienced this kind of hardship, so you can't endure so much hardship.
Today's college students would think: "My family is well off, I can find a job in the financial industry and earn 200,000 or 300,000 yuan a year. Why should I endure this and suffer so much?" This kind of mentality affects everyone's drive to move forward.
How do young people break through the siege? Just be a little bit better than others in all aspects. First of all, it is cognition. You know more than your peers. Especially for men, the most important thing when you are young is not how much money or position you have, but how much you have seen and experienced. Your vision determines the height of your future.
Then there is emotional intelligence. It doesn't mean to please the boss every day and call him "brother". The real emotional intelligence is to let the boss see how much benefit you can bring to him and feel comfortable with you. What the boss needs is to see how much benefit you can bring in the next five to ten years, as well as your loyalty and kindness.
After that, professional skills and learning ability come. To put it bluntly, people with normal IQ and good education have similar learning and comprehension abilities. After one month of training in our company, you can basically learn how the entire industry works.
The most important thing is actually character. In our industry, including my brothers, what everyone values is character, that is, whether one can create emotional value and profit value.
As for when to strike out on your own, there is no contradiction between following a big brother and working on your own. People who really treat you well will give you opportunities when they see that you are capable. You will be more confident if you have someone to back you up. For example, if someone takes you to a dinner party to meet people, your project may get investment in just one meal.
This kind of relationship is mutual. You are my resource, and I am your resource. I have excellent young people around me, and others will think that I am a good person who can be recognized by young people and not abandoned by the times. In this way, I can gain a greater advantage in business negotiations.
I would rather find employees or partners who are trustworthy and can bring about a win-win situation.
Young people today are indeed different from before. Maybe it’s because their family conditions are better and they are not so hungry. Do you know what kind of young people venture capital likes the most? Those with poor family conditions, middle class or even worse. Why? Because these entrepreneurs can maintain a sense of hunger, and hunger will force them to continue to pursue success.
However, if you are looking for an employee, you have to make sure that he or she can bring win-win results. Everyone wants their employees to become better. But the most important thing is to trust your employees and believe that they will give back to you after they become awesome.
You are right. This industry was a makeshift team at the beginning, and it all depends on mentoring. The person who mentored me told me that when I become successful, I should not forget to mentor others, and to mentor them with sincerity, just like he mentored me. This is his expectation of me, and I think I have achieved it.
This is more like a master-apprentice system.
6. How to combine web3 and web2 work and take it to the next level in the field of web3?
I not only have web3 industries, but also many web2 industries, even more than web3, and my achievements in web2 are actually greater than those in web3. It’s not that I don’t work, it’s that I don’t work in web3, because I have many brothers in web3 who help me do these jobs, but I still need to struggle for a long time in web2.
To judge whether a person is excellent or not, first look at his energy. I only sleep 4-5 hours a day, and I have persisted for more than ten years. You must not give up Web2, and you must also work on Web3. Let your Web3 grow step by step, so that you can constantly cheer yourself up: I am strong, I can be stronger.
You can earn 4,000-5,000 U per month in Web2, which is actually pretty good. If you give up, your mentality will change. You can't earn that much in Web3, and you will feel very painful for giving up a stable job. It's easy to make mistakes when you're anxious. Remember, slow is decisive.
You can divide your time. Sleep 1-2 hours less every day, play less, and work more. Set yourself a goal for one or two years. For example, what achievements do you want to achieve in Web3 in two years? You must have a clear plan in terms of money, cognition, and connections.
If you want to achieve success in Web3, you need to consider all aspects. For example, when going out, you need to meet industry friends from all over the world to entertain you.
Many young people say they want to make money, such as 1 million or 10 million. But you have to think clearly about how to make it. Suppose you want to make 5 million a year, you can plan like this: the first 10 months are just to survive, the 11th month is to start, and the 12th month is to make 4.9 million. Then think clearly about what to accumulate, what to learn, who to meet, and how to push yourself in the first 10 months.
Making money by doing investment research does not conflict with your studies. I suggest you go to a company for internship first. Why? This will allow you to systematically understand how this industry works, what you can do and what you can't do. Then you will know whether the bad news in investment research is useful or not. If you just figure it out on your own, you will only see what others have posted, and you don't know whether it is reliable or not.
When you intern in a company, even if it's just for a month or two, you can deeply bond with your colleagues and leaders, and maintain long-term contact with them. When you finish college and do graduate school, and come back a few years later, if he has taken a high position, wouldn't it be great for you to find him?
This is how it works in this industry. If someone has helped you, as long as you have no problems, they will continue to help you. It doesn't mean that the person you have helped will help you in return. It's not like that.
So, go to the company and get to know more excellent and active colleagues. Even if you get in through HR, you should find a way to make the boss appreciate you. This will make your future path much broader.
Which skills and knowledge areas to focus on to increase employability in Web3?
From my perspective, improving social skills is very important. No matter how high your research level is, if you don’t have a strong social network and resource acquisition ability, it will be difficult for you to make substantial progress in this field. For example, when we invest in projects at Easy Fund, we do not rely entirely on investment research results, because even if we are optimistic about a project, it will be useless if there is no opportunity to enter. Moreover, if your resource acquisition ability is insufficient, you may only see the public financing news of the project and miss the early investment opportunities.
I was once an I person, you may not believe it. I studied hardware programming and participated in various robotics and ACM competitions. However, in my junior year, I started to minor in finance, which made me realize that economics and resource management are the core.
I respect people who work in technology, but I won't become one of them. In this industry, many things need to be advanced through relationships, which is my strength and expertise. So, when you ask what skills to improve to enhance employment competitiveness, I think that in addition to technical skills, social skills are equally important. Unless you are the CTO of the company you are applying for, few bosses only value technical level.
8. How to effectively build a professional network in the crypto space?
At first, I also built my own social network through various channels. Since I had no money but wanted to make money, I called and asked people one by one, joined some top WeChat groups, saw who was the most powerful person in the group, and then added their WeChat. Basically, I would ask them how they make money and if they could take me with them. I would tell them about my college experience and the value I could provide, and ask if they could give me some advice.
That's how it was. I approached these people like a "licker" every day for about half a year. At first, we had no resources and had to lower our status. We were forced to do business and needed to think of all kinds of ways to seize opportunities, get to know more people, and then build our own social network step by step.
As a young person, especially in your early 20s, you are the most handsome when you put down your pride. When others see you put down your pride, they will think you are sincere and respectable. Try more, keep learning, and grow from it.
