Author: jez

Compiled by: TechFlow

Traditional finance (tardfi) has decades of experience and a well-developed regulatory system. Although these "investor protection" mechanisms are often mocked, they can effectively reduce risks. In contrast, the cryptocurrency field is like the Wild West, a relatively niche arena where you have to relearn the rules of traditional finance through painful lessons. In this environment, competition is unequal, and some people understand the "unwritten rules" better than others.

The purpose of this guide is to share these lessons learned through experience. Unfortunately, those who need this advice the most may be watching funny videos on YouTube or following lilmoonlambo, rather than reading my article (writers of guides always think this way). However, I hope you, as an informed reader, can find some helpful content from it.

I compare cryptocurrencies to a large-scale multiplayer online game (MMO) because there are many similarities: hit points, levels, online friends, player-vs-player (PvP), player-vs-environment (PvE), a bustling town square, and an economic system - only the "coins" here are more valuable than the gold in World of Warcraft. This is the origin of the "monetized metaverse".

The following content is sorted according to the potential impact on your investment results (if you haven't implemented or understood it yet).

Teamwork: Don't be a lone wolf

Many people who enter the crypto world are naturally contrarian thinkers or prefer to go it alone. After all, it takes a lot of courage to ignore the advice of family and friends (if they know about it). And once you've tasted a little success, it's even easier to feel like you're "on top of the world." "I just need to listen to the market!" - a typical lone wolf would say.

But I'm telling you, give up this "lone wolf mentality"! The market is lagging, it only tells you where you went wrong after you've made a mistake, and the speed of change in the crypto industry is too fast for you to slowly learn from your mistakes.

You need to find a group of excellent teammates to fight alongside. These teammates should be morally upright, hardworking, and like-minded "workers." The most important quality is resilience - make friends with those who are upset about their mistakes and quickly take action, and stay away from those who only "self-comfort." A high-trust chat group can cover a wider range than you can on your own, and can quickly tell you what's right and what's wrong. The most helpful feedback is often blunt, even jarring - but even if it's indifferent, it's still feedback.

If you can't find a team, reflect on your own "value proposition." Generally speaking, unless you know people offline and make friends, team invitations are usually based on "what value you can bring" and "whether you fit in." The best teams are made up of strong individuals - improve your own abilities and reputation until you can join the team you want on an equal footing, rather than being "given" a spot.

Here are some "godly teammate" types in my circle:

• Mentor: Someone who provides valuable experience in the early stages, just like I'm writing this guide now.
• Partner: A partner who invests 10 hours a day, chats 2,000 messages, and makes plans with you at critical moments.
• Signal man: An insightful partner who helps you distinguish which ideas are viable and which are just "brainstorming".
• Explorer: A bolder partner who is responsible for discovering new opportunities for the team to filter.
• Guide: A technical expert who solves various technical problems.
• Specialist: An advisor who provides professional advice in specific situations.

Many people think the so-called "secret organizations" are some mysterious conspiracy groups, but they are often just chat groups made up of friends. They have grown together and now have a certain influence.

The importance of a "home base"

Not all chat groups are the same. There is a special kind of chat group called a "home base," which is the first place you log in every day, the first place you respond to messages, and most importantly, the first place you share information.

When deciding whether to invite someone to your high-trust group chat (to improve team efficiency), there is a counterintuitive suggestion: try to avoid inviting high-profile accounts, as they often already have their own "home base." Instead, those "newcomers" who are still full of enthusiasm and don't have a fixed team are the most worth considering.

The risk of complacency

Every chat group has its own life cycle.

In its heyday, most people in the group are full of passion and desire. This motivation usually comes from the smart newcomers who haven't achieved success yet, but look promising.

However, over time, the chat group inevitably becomes complacent. Members gradually reach higher levels, and the "game" pace becomes slower and more orderly. Daily discussions decrease, and topics begin to shift to life, politics, and other areas.

If you want to stay at the forefront of the industry, make friends with those emerging, promising people and join the groups that are still in a "hungry" state. Think about the passion and desire you had when you first entered the field, and immerse yourself in that atmosphere again.

Choose a profession, find your strengths

To succeed in this field in the long run, you must cultivate real advantages. Simply buying tokens that will rise in a bull market is not an advantage - the key is being able to identify bull market signals. Joining a group that teaches you step-by-step operations may benefit you in the short term, but this advantage often quickly becomes ineffective. The real advantage lies in being able to consistently and stably make money in a particular professional field.

Different strategies suit different personalities. If you are a patient and risk-averse player, you should not enter the high-risk "pump.fun" arena; likewise, if you are naturally adventurous, you may have difficulty persisting in the liquidity mining field, as you may quickly be distracted by other things.

Here are some successful skill classifications based on different risk preferences.

DPS - Trader

These players focus on directional trading, pursuing high-risk, high-return opportunities. The successful stories often obscure the losses of the majority. To become a top DPS, you need high risk tolerance, excellent risk management skills, strong psychological resilience, and the ability to maintain your fighting spirit in the face of failure.

Trench Warrior

Shit coin traders are one of the professions with the greatest ability differences - the worst (even the average) are very bad, while the top ones are excellent. Players like req and nbs can fully utilize on-chain information resources. If you consider yourself a "shit coin trader" but haven't mastered your own on-chain analysis tools, you still have a lot of room for improvement. In my view, this is the only true alpha in this field.

Here is the English translation of the text, with the terms in <> retained as is: Although trading is a popular entry choice due to low capital barriers and high potential returns, this style is difficult to scale to higher levels. The problem lies in liquidity - newly issued coins have poor liquidity, and if you try to trade with a larger capital size, it will lead to increased slippage. In fact, buying too many coins can even lead to a coin price crash, as you need to bear greater distribution pressure. trading also cannot be scaled horizontally by increasing trading volume or frequency, as the failure rate is simply too high. Those who have successfully emerged from the market are advised not to go back easily, unless it is a special case or you have a real advantage in it. The core of the "hunting for quality new things" strategy is to find a new with a strong fundamental logic, get in early, and enjoy the subsequent appreciation process. Unlike the "trench warriors" whose holding periods are calculated in days or even hours, this strategy is based on fundamental logic and usually takes several weeks to several months to see results. Ideally, the market will quickly recognize this logic. This is also my personal favorite style, as it does not rely on "luck" and is more repeatable. The ideal operating range is: buy when the market cap is between $50 million and $100 million, and exit when the market cap is around $1 billion. This strategy can be easily scaled to higher investment scales. The core logic here is "the market has not priced this thing correctly, it should be worth more". New things are more likely to achieve this compared to old things, mainly for the following two reasons: Time factor: The market's pricing time for new things is shorter, so their value has not yet been fully reflected. Capital flow: There are fewer existing holders of new things, and more potential buyers, so the room for capital inflow is greater. Of course, this does not mean it has to be a completely new . Some old s, if they have a clear transformation direction, may also become opportunities, but their development may be more difficult due to the resistance of existing supply. How to find quality new things? The answer is "you'll know it when you see it". But if you don't know where to start, you can refer to the following points: This is the most important criterion. First movers often gain momentum beyond expectations, with a very high risk/return ratio. A completely new trend often sparks new discussions about the industry, and all the attention will ultimately return to the original thing. The flywheel effect refers to a self-reinforcing cycle. For example, naturally have a flywheel effect - as the price rises, holders become richer and more excited, and tell more friends, forming a positive feedback loop. Other flywheel effects may be more complex, such as , which can effectively kick-start a project's activity through deterministic early participation and guaranteed returns. Entry barrier (onboarding friction) is an important step in verifying the investment logic. If there is no entry barrier at all, you need to ask yourself: why am I so lucky to buy in at a low price? Perhaps the current price is already reasonable. At the same time, the existence of an entry barrier also means that there may be opportunities to lower the barrier in the future. For example, 's migration from to Ethereum, the expansion of the hyper-liquid spot ecosystem, and even the launch of a ETF, are all typical cases of lowering the entry barrier. The lowering of barriers often attracts more capital inflows to the market, and those who have invested effort early on are usually the ones who benefit. If the "Gem Hunters" rely on fundamentals as support, then the Meme Priests completely abandon these boring things. Meme Priests are the traders in this cycle, they intuitively grasp market sentiment to seek Alpha. Just like investment, "lying flat" is usually the best strategy - until this strategy no longer works. However, this path requires great faith. You must be able to withstand the pressure of market pullbacks, and also accept the negative emotions that these pullbacks may bring. The best Meme Priests can even change the odds of success through their own actions. For example, and , or and , are typical cases. Among all trading categories, leveraged traders have the highest risk of failure. Their behavior is sometimes no different from "problem gamblers". Based on experience, the problems of most leveraged traders are: using too high leverage, holding losing positions for too long, and trading too frequently. I once joked that "there are no successful leveraged traders in this world, only those who haven't blown up yet." Leveraged trading may seem simple, with a few opportunities each year that make you feel it's "easy". For example, the approval of a ETF or certain major events. However, at other times, leveraged trading is more like a cruel PvP battlefield. Even if profitable, the returns of leveraged trading are often far less than simple asymmetric spot investment opportunities. If you are considering this category, I would strongly advise you to give it up. Tank-type players are almost indestructible (unless they encounter smart contract risks). Their losses are small, but their return ceiling is also relatively fixed. Tank-type gameplay is particularly suitable for those investors who are very patient, risk-averse, or have limited time. By providing liquidity for users or projects, they can earn stable returns. The main sources of income are currently: Funding Rate Trading When market demand is strong (such as when reaches a new all-time high), the demand for margin trading will be very strong, pushing up the funding rate (the annualized interest rate paid by long positions to short positions). In major currencies (such as and ), this rate can sometimes exceed 20% and permeate the on-chain stablecoin market. RWA Yields Government bonds are currently the most common and liquid RWA that have been successfully introduced into the crypto space. Compared to this, the yields from real estate and other forms of real-world assets are not recommended due to their poor liquidity and high risk. Token Incentive Yields Rewarding users who provide liquidity with tokens is a major innovation in the DeFi field. Although the incentive mechanisms are now more complex, there are still opportunities for unexpected surprises. This is a true "Player vs Environment" (PvE) mode, as projects are happy to use their printed tokens to exchange for liquidity. In addition, "market making liquidity providers" is an emerging role in this cycle, with relatively high and stable returns. For example, the liquidity pool, as well as projects like and , are good choices.

For those "yield farmers" who are deeply involved in crypto projects, this strategy currently provides the best risk/return ratio, as it usually only requires a small amount of capital. The core idea is to participate in a new protocol (whether as a user or by contributing trading volume), as long as the expected rewards can exceed the costs. However, this approach is gradually becoming less effective, as more and more projects have realized the exploitative nature of these "farmers" and have started to adopt linear reward mechanisms to suppress this behavior.

The essence of this approach lies in an implicit consensus - projects need certain key metrics (such as user numbers, total locked value TVL, and trading volume) to boost their valuation and attract new users. Unlike users who provide actual liquidity support, Sybil/Wash (i.e., users who forge identities or engage in fake transactions) only create an illusion of prosperity. Even so, there are still many projects willing to pay with their own issued tokens, just to display a nice dashboard on dune analytics.

I've heard that the most radical operations are usually programmatic and constantly at odds with detection mechanisms. For example, I once heard about a project that had an automated system composed of 12,000 bots, and after that, I decided to never touch zkSync again.

If you want to actually try this method, a viable approach is: when you discover a promising new project, you can interact with it using a few of your normal accounts.

Support Players - Other Categories

These styles are neither trading nor staking mining, but they are unique enough to be classified as a separate category.

Insiders

There are many types of insiders, some of whom are helpful for project development, and some may be malicious. But in any case, being an insider is a privilege, and their risks are much lower compared to ordinary investors.

So, what's the difference between investing in insiders and seed round insiders? Usually, it's the difference in project quality - in the past, venture capital could serve as a signal of project quality, but this standard is changing.

In fact, most project founders are more willing to accept DMs than you might think, especially in the early stages of a project. For example, the NBS pre-sale strategy: participate when the pre-sale is about to end, and at the same time, DM the developers, which is also a manifestation of an insider strategy.

Builders

If you are a builder, my only advice is: stop reading this article and go back to building! Perhaps this article can help you better understand the user profile, but nothing is more important than continuous iteration and finding product-market fit (PMF).

Onchain Rogues

There are many untapped opportunities in the blockchain space, and those with technical capabilities, curiosity, and energy can delve into them and profit from them. For example, front-running, sandwich attacks, randomness exploits, and so on - these edge cases are waiting to be discovered and exploited by those with the right mindset.

Leveling Guide

When attempting to level up, you need to be clear whether you are in "speed run mode" or "hardcore mode".

Speed Run: This mode allows you to restart after failure. It's similar to "hypergambling" and is suitable for people with other income sources or students with high future income potential. Since the fear of failure is lower, the speed run mode can take on more risks.

Hardcore Run: This mode has a lower tolerance for failure. For example, if your capital is your living savings, or you live in an economically disadvantaged area and even need to support dependents, you cannot afford the risk of losing all your funds, which would be a hardcore mode.

Four-Digit and Below Asset Stage

If you already have a job or are in school, you can skip to the next section.

At this stage, your time is better spent earning fiat - a minimum wage job is equivalent to a 150% APR. And I believe you, dear reader, can do even more.

In fact, for a portfolio of this scale, you cannot generate enough returns to justify investing a lot of time. The only exception is Sybil airdrop farming, but this does not require a full-time commitment. Opportunities for 10x returns are rare and should be saved for higher asset stages.

If you live in an area with scarce job opportunities, you can try to join a protocol and take on roles like community manager or other positions they need. The simplest way is to become a member of the community as the protocol develops, so that when they need to hire, you are already a core member.

Five-Digit Hell - Focus on Increasing Fiat Income

Welcome to the trench stage. At this stage, every dollar is as precious as ammunition on the battlefield - they are prepared to help you find that 10x return opportunity.

Many try to become "trench warriors", but without truly mastering the required skills, or recklessly attempting to become "leverage guides". These people are usually stuck in the five-digit hell until the bull market pulls them out - only to fall back in again.

However, I've found that investors who have long-term holdings in MemeCoin or are good at finding "good new things" are often able to break through. Their strategy is simple: firmly buy and hold spot assets.

Whether you choose the hardcore mode or not, Sybil airdrop farming is a low-cost way to participate. Just one big, non-linear airdrop opportunity can be enough to graduate you from this stage.

Six-Digit Hell - Seeking 10x Returns

Seize the best timing. When your capital reaches a certain scale, you can easily grab a 10x return opportunity without worrying too much about the size of your capital or slippage issues. As mentioned in the "New Opportunity Hunter" section, the ideal investment opportunities are usually those that grow from a $50 million or $100 million market cap to a $1 billion scale.

Personally, I've escaped the six-digit hell four times, and I've never fallen back in. The strategy is always the same:

• Keep a close eye on new opportunities: Always be on the lookout for promising new projects or trends in the market.
• Validate the hypothesis with a small trial: Invest a small amount of capital first to test if your investment hypothesis holds true.
• Concentrate and hold firmly: After confirming the hypothesis, allocate the majority of your capital and patiently wait for the strategy to be validated.
• Realize profits when the market is buzzing: When you find that everyone is talking about the project, it's a good time to take profits and exit.

Reviewing each successful experience, there is one common point: I bet on exchange tokens. After all, speculation has always been the most powerful product-market fit in the cryptocurrency market.

Seven-Digit Hell - Seeking a Few 2-3x Returns

When your capital reaches the seven-digit level, finding some 2-3x opportunities is the key to breaking out of the predicament. The overall strategy is similar to the six-digit stage, but it requires more patience and repeated operations. However, as the capital scale increases, the difficulty of operations also increases, especially in maintaining flexibility during market fluctuations.

The biggest challenge at this stage is how to allocate capital. You may find that the liquidity of certain projects is insufficient to support the investment scale you want. This forces you to diversify your investments. In the six-digit stage, you could concentrate all your capital on the best ideas; but in the seven-digit stage, this approach is often no longer realistic.

When there are not enough attractive new opportunities in the market, temporarily parking your capital in stablecoin liquidity mining (Stable Farms) is a good choice. This provides stable returns while giving you time to wait for better investment opportunities. Patience becomes particularly important at this stage.

In addition, parking capital in stablecoin farming has also become more attractive among the different "good new things". At this stage, patience is particularly important.

Eight digits and above

At this stage, what else is there to say? For those who have reached this level, the only thing to remember is: "Don't mess it up."

Don't stand in the pit of fire

Avoid the following common mistakes.

Avoid trading when emotions are out of control

Learn to recognize your own emotional changes. When you feel that you are starting to lose control, decisively sell your positions and temporarily leave the market. Chasing losses will never lead to good results, and staying calm is the wise choice.

Avoid reckless bets after big wins

After a big win, it is often easy to suffer stupid losses due to overconfidence. I call this situation "euphoria trades". No matter what kind of victory you have just experienced, you must always maintain the rigor of the trading process and avoid being influenced by emotions.

Avoid the cash-out loop

When trading, always ask yourself a question: "Who's left to buy?" The essence of the market is the flow of funds, not stagnation. Sometimes, some assets may appear safe, just because everyone is holding them, but this does not mean that they are truly risk-free.

Forget about floating profits and losses and historical highs

Dwelling on past mistakes will only waste your energy. Obsessing over these things will make your thinking confused and affect your next decision. Let go of the past and focus on future opportunities.

"Insider information often makes people suffer the most losses" -cl207

When you hear the so-called "insider information", carefully evaluate your position in the information chain. The further you are from the source of the information, the more likely you are to become the "bag holder" who provides liquidity for those who need to exit.

Don't add positions when you're losing

"Losers only add to losing investments" is a common mistake in the market. If the market has clearly told you that your judgment is wrong, then don't continue to add positions without sufficient reason.

Old coins don't work, new coins are more attractive

New projects often have greater growth potential, while old projects may have lost their appeal. Regarding this point, you can refer to my previous detailed analysis on capital flows.

Characteristics of the best players in the game - David Sirlin

David Sirlin is a competitive fighting game champion who wrote a book called "Playing to Win" and shared his strategies and insights. For anyone who has participated in high-level competitions, these contents may not be unfamiliar. But the characteristics of successful players he summarized are also applicable to investors in the crypto field. These characteristics include:

• Profound understanding of the market: Understanding historical trends and precedents helps you predict future market changes.
• Love for the market: You must love this "game" in order to be willing to invest enough time and effort to win.
• Psychological resilience: This market will make you experience countless crashes, but you need to persevere.
• Correct mindset: When faced with losses or misfortunes, do you choose to calmly face them or angrily complain?
• Technical capabilities: Do you have unique skills or advantages?
• Adaptability: Can you flexibly apply your advantages to new environments or rules?
• Yomi (predictive ability): Can you accurately predict the behavior of other market participants?
• Evaluation ability: Can you relatively judge the value and potential of things?