Article reprinted from: FC Talk
The following text is organized from the series Twitter Space #DialogueTrader, hosted by FC, founding partner of SevenX Ventures, Twitter@FC_0X0
This episode's guest: Honest Mai, Twitter @Michael_Liu93
Mai's journey in MEME: After a five-minute investment yielding a hundred times return, he became addicted to MEME.
Before getting into crypto, Mai followed a very 'orthodox' financial path: studying finance in college, then working in sales as a banker, and later moving to the buy side. On the buy side, he was looking at the enterprise services track, where many blockchain founders wanted to do BAAS, which is Blockchain as a Service, and through this opportunity, he saw this new technology.
By the time of 2020 and 2021, Mai officially entered the crypto industry, managing some secondary positions for traditional finance industry bosses, primarily in Bitcoin. From that point on, he began spending a lot of time daily researching new things and looking for Alpha.
In this cycle, Mai firmly believes that the Alpha is MEME, so personally, he spends 60% to 70% of his time on MEME, also engaging with various CX traditional finance industry bosses to join in.
Addiction to MEME originates from a trade with a hundred times return in just five minutes.
At that time, the market was speculating on Musk's signature, and both Long Yi TROLL and Long Er ZUZALU took some positions, so which coin would become Long San? Mai and his friends felt that V God’s signature might have speculative space, so they bought TCATI (Green Tea), a cat-themed MEME, at a market cap of over 20,000.
About five minutes after buying, this coin suddenly surged to a market cap of about one to two million, turning a few hundred dollars into thirty to forty thousand dollars in an instant.
This can actually be considered Mai's true first encounter with MEME; although the hundred times return only recouped the principal, this trading experience made him feel, 'MEME is really fun.'
Then he started spending more time researching MEME, understanding MEME, trading MEME, and gradually developed his trading strategy.
Why are strong funded projects more fun?
PVP projects are a typical game of mutual non-achievement, where everyone is competing to discover a hotspot first or create one, gather bottom chips, and then cash out when they feel it's high.
In fact, funded projects are a game of mutual achievement between retail investors and funds. In the lifecycle of a MEME, if the fund wants to raise the market cap and get listed on Binance, it needs to use its funds to find Callers, accumulate chips, wash chips, push the price, create advertisements/news, and drive hotspots.
If a fund is very skilled at doing these things, it means they are good at storytelling, have a large amount of capital, and possess various relationships with Callers and exchanges, making it a win-win situation for both retail investors and the fund.
So how do you determine if a project is a funded project?
Mai provided a perspective: observe if there is intentional Wash behavior in the wallet, that is, rapidly buying and selling the same asset within a price range in a few seconds. The purpose of the fund washing wallets includes:
Can be marked as a new wallet by tools like GMGN
Distributing chips to prepare for a price surge
However, as the information revealed by tool vendors increases, the methods of funds managing projects are constantly changing, but this is good news for retail investors because funds need to collect chips, and they will have more time to prepare for price surges, allowing retail investors more time to find which funded projects are outstanding.
How does a fund operate a MEME on Solana?
Early stage: Accumulation in the inner market, launch on the pump
Due to the market's 'anti-fund' sentiment after the capitalization of NEIRO, in the early stages, funds would hide themselves, making MEME appear to be a project initiated by the community, and during this process, they would start accumulating chips.
In the process of inner market accumulation, the fund's biggest enemy is the Bot. Many Bots now check the Pump's inner market Volume, and once they detect a new wallet buying (5-10 SOL), they will immediately follow up.
When enough chips are accumulated, generally reaching over 75%, they will launch on the Pump.
Mid-stage: Pushing volume in batches
First wave: Launch. Find some Tier3 and Tier2 Callers, while coordinating with your market makers to push the market cap into the range of 5 to 20 million, then quickly crash.
Second wave: Explosive surge. Deploy the funds harvested from the first wave crash, usually all funds, market-making while finding Tier1 callers to shout orders, letting everyone miss out on cheaper chips.
Later stage: Getting listed on exchanges
Whether it can get listed on exchanges, like Binance, actually depends on luck, and the fund is also looking at fate. If it successfully gets listed, the liquidity valve opens, and subsequent operations will be consistent with the secondary market.
The market-making after listing is mostly operated by wintermute.
BAN and AI16Z are two very typical 'funded projects': in the early stages, they went through a long period of accumulation, made the first big surge, then crashed down to gather enough subsequent market-making funds, while also accumulating chips at the bottom, and the second wave took off directly.
How to get on a strong funded project?
There are two strategies:
First, after the end of the first wave, buy before the second wave rises.
At this stage, the fund is continuously accumulating at the bottom. If you find traces of their accumulation (mainly by observing wallets), you can follow in and buy.
Secondly, once the second wave starts, decisively chase it.
At this stage, the fund is likely to find Tier1 Callers to cooperate with the funds accumulated from the first wave crash, quickly pushing up the market cap, seeking to go public. Generally, once the second wave starts, strong funds rarely allow coin prices to pull back even slightly to let retail investors in. So if you observe that the second wave has started and has surpassed the first wave, you can chase high.
Understanding MEME through the logic of short videos
In May, when I talked about MEME with Zepump during the #DialogueTrader session, he mentioned a viewpoint: MEME to VC coins is like short videos to long videos, which Mai also fully agrees with, and explained the 'commonalities' between short videos and MEMEs from the aspects of 'hierarchy of demand' and 'evolution path'.
First, let's talk about the hierarchy of demand.
Why are people, especially post-00s, willing to tirelessly scroll through short videos and MEMEs every day? Because they satisfy the deepest desires in their hearts:
Short videos satisfy lust and the so-called 'laziness.' Because young people's time is fragmented, and they have very little entertainment time, they can only obtain very brief happiness by scrolling through Douyin.
MEME satisfies greed. Nowadays, young people generally feel that the threshold for wealth leaps is too high, so they are eager to take a gamble (for wealth).
Let's talk about the evolution path.
Short videos initially focused on UGC, user-generated content, but later you will find that few people watch UGC anymore; everyone is watching PGC because PGC has better production quality.
In MEME, everyone started as very naive CTOs, but later realized that funded projects were more fun and that they were pushed higher due to their fundamentally strong operations and substantial financial power.
Ultimately, both short videos and MEMEs are part of a very attention-driven economy.
In the super cycle of MEME, which coin will become the 'new king'?
Mai firmly believes that MEME has established itself as a long-term phenomenon. Looking back at today two years later, most of the MEMEs in this market may have disappeared, but those that can persist will certainly be more numerous, and there will definitely be a MEME that surpasses SHIB, which is likely already in this market.
Which coin is likely to become the 'new king'?
First: $DOGE
The true leader in the MEME track, the 'BTC' in MEME, is likely to see DOGE go ETF after Trump took office.
Second: $PEPE
The strength of PEPE lies partly in its early emergence, and partly in its logic, which many Chinese cannot comprehend. Most of the projects emerging on Ethereum are basically derivatives of PEPE, which has already become a consensus. Currently, it is difficult to find a MEME in this cycle with a consensus as strong as PEPE.
Third: $WIF
Fourth: $POPCAT
$WIF VS $POPCAT, Mai is more optimistic about the latter. There is actually a particularly interesting point about WIF and POPCAT: although WIF has a market cap double that of POPCAT, their pools are the same.
Currently, fewer people in overseas communities and conspiracy groups are discussing WIF, as attention has shifted to POPCAT, which may also indicate a shift in capital preferences.
What Callers should one focus on to play MEME well?
Abroad:
Murad @MustStopMurad, Crash @CrashiusClay69, Mitch @idrawline, OverDose@Overdose_AI, Moneylord @moneyl0rd, Ansem @blknoiz06, Spidercrypto@SpiderCrypto0x
Chinese district:
First: Wizard @0xcryptowizard
The wizard is a builder, and following his lead feels relatively secure because he keeps building, and the projects he builds are from very good perspectives.
Second: magnolia @0xmagnolia
Sister Hat has written a lot of practical content, teaching everyone how to find MEMEs and how to win in this game. She often has a strong ability to catch hotspots, so she can serve as a good reference for where a hotspot might be and its sustainability.
Third: Timo @timotimoqi
Timo is a friend of Mai in real life, originally both being investors, so their trading perspectives may be quite similar. The tweet about the eight questions to ask yourself before buying MEME came from Timo ?https://x.com/timotimoqi/status/1847147614963486730
Recently, Timo may have called five or six projects, with three having over a hundred times returns.
Lastly, I want to say that Caller has a problem: what may be good a month ago might be bad a month later. For example, POE, who previously posted great content, went viral over a month ago and then started calling various Rug pulls to scam investors.
Although you may not know what is happening behind the scenes, the lesson is: when looking at Callers, you must look at the overall situation comprehensively. It’s still similar to short videos; they are just the ones recommending videos to you, not the ones who should control your likes—your right to like should still be in your own hands.
Written at the end
I think the core of playing MEME is to find the stage and trading methods within your ability. In fact, no matter when you enter the market, you can always find your opportunity in MEME, which is one of the most interesting aspects of MEME in this cycle.
