Author: Based Money Lich King
Translation: Shenchao TechFlow
During the last market cycle, whether in a bear market or a bull market, I made many mistakes due to a lack of experience. However, these mistakes have been valuable lessons for me. I paid an expensive 'tuition fee' in the market but avoided many traps that could have cost me nearly all my gains. I have summarized these lessons into a set of rules that I strictly adhere to. Today, I want to share these rules with you. The purpose of these rules is not to make you rich; that is your own business. The true meaning of these rules is to help you survive in this high-risk market. Even in a bull market, risks still exist, and you could 'liquidate' due to operational errors.
Of course, the following rules are not absolute, but they can help you reduce risks in this uncertain market.
Rule 1: Never be among the first participants in a highly anticipated blockchain event
If a blockchain event generates widespread attention, the first participants usually suffer the consequences. For example, early investors in Sushiswap faced losses, and the Otherside deeds project had similar issues, with many more examples. Those who bought into Sushi too early ultimately paid a painful price. The correct strategy is to patiently wait for market sentiment to stabilize, for panic selling (FUD) or excessive hype to gradually subside, and then reassess whether the risks and rewards are worthwhile. If the entire crypto community (Crypto Twitter, CT) is hotly discussing something, early participation is often a failure.
Rule 2: Never recklessly use perpetual contracts (Perps)
Perpetual contracts are designed for 'giga whales', not ordinary retail investors. Most people are not GCR, Hsaka, Andrew Kang, or Nexus. You should not trade perpetual contracts. This tool is usually used by whales to supplement positions or make small bets at low leverage. A leverage of 10 times or more is like falling into the devil's grasp; don't even try it. Perpetual contracts are the fastest way to wipe out funds, bar none.
Rule 3: Always assume others have malicious intent
You are in the 'Wild West' of finance. There are no real friends here, and even if someone behaves like your friend, they are not exempt. There are countless stories of people being deceived in the market, many of whom were betrayed, attacked, or scammed by those they trusted. You should assume these people may be malicious strangers, or even potential scammers. Do not easily trust anyone; assume everyone will sell your assets in the market.
Rule 4: Do not blindly worship founders
In this market, founders are the people you need to be most wary of. They often cause losses for investors and token holders. For example, Do Kwon, Dani Sesta, Andre Cronje, etc., have repeatedly disappointed investors, as well as Chef Nomi, the Starknet team, the founders of Celsius, and others. Do not treat founders as heroes; assume they will deceive you, because they likely will.
Rule 5: If team behavior is suspicious, you must 'create panic' and 'pretend to care'
This rule is a supplement to Rule 4. If you notice that a certain founder or team's behavior is problematic, you should actively create 'panic' (FUD) for your assets and 'pretend to care' (concern troll). By questioning the project's actions, you encourage more people to join the questioning until the team abandons its suspicious behavior. Those who blindly support the team may lose everything, and you need to protect your own interests.
Rule 6: Never lock up your tokens
Locking up tokens for months was one of the biggest mistakes I ever made. Remember, never do this! Locked tokens may face the risk of smart contracts being hacked. Moreover, when the team knows that investors' tokens are locked, they often engage in some disreputable behaviors. For example, the Opening Ceremony incident of TempleDAO is a typical case. Do not lock up your tokens to avoid being passive.
Rule 7: Stay away from Sisyphus
Sisyphus once conducted a rug pull worth $60 million and remains at large to this day. If possible, try to avoid him and the projects he participates in as an 'angel investor'. In this circle, Sisyphus is the most notorious seller. His actions can be described as on-chain 'predation' and 'destruction'. Stay vigilant and take responsibility for your assets.
Rule 8: Do not buy assets that are surging
Do not chase assets that are experiencing parabolic surges. While it may occasionally succeed, the probability of failure far outweighs that of success. Instead of taking risks, patiently wait for the market to adjust.
Rule 9: Focus on market cap, not unit price
Many people fall into the trap of unit price thinking, especially supporters of XRP who believe XRP can rise to $10,000, or that Shib can rise to $0.01. But in reality, these goals are not achievable. We should base our judgments on whether the market cap is feasible, rather than focusing solely on price. However, if others are willing to believe in those unrealistic price targets, you can let them be.
Rule 10: Remember to take profits
If you are currently facing financial difficulties, it is perfectly reasonable to sell part of your assets to resolve these issues. This market will always exist, and opportunities will continue to arise. Many people have experienced profit loss because they pursued an ideal target number (such as 50,000, 100,000, 200,000). If these numbers can change your life, then decisively take profits. As Foo said, the goal is to earn a profit equivalent to two years' salary from the market. This sense of financial security will make you a better trader and allow you to live more easily. In the long run, this adjustment of mindset will greatly benefit you.
Rule 11: Do not casually connect to unfamiliar applications
Be cautious when using any new application, as it may lead to your assets being stolen. It is advisable to first test with a smaller wallet to ensure safety before using your main wallet.
Rule 12: Do not believe in the concept of a 'super cycle'
The so-called 'super cycle' refers to the view that the market will continue to rise. Is this really a super cycle? I cannot be certain. But if it isn't, I do not want to make mistakes again because I believed in this concept.
Rule 13: Do not give up during a bear market
When we enter a bear market again, I hope you have followed Rule 10 and taken profits in a timely manner. Bear markets are not scary; do not give up because of them. In fact, the greatest gains often come at the end of a bear market. I am a living example. During a bear market, you should focus on improving your skills, honing your trading techniques, and preparing for the next bull market.
Rule 14: Do not buy tokens related to 'mysticism'
Buying such tokens may lead to unforeseen consequences. If you are a materialist and do not believe in these, at least know that the founders of these tokens are often morally questionable and have ulterior motives. Choose your investment targets carefully.
Rule 15: Wholeheartedly stick to your beliefs
This is the most important rule and the only way to stay grounded and humble. While we may not be able to fully achieve this, the effort to practice is a form of growth.