I have traversed four cycles of bull and bear markets, losing an entire galaxy's worth of experience, and I share these valuable lessons with everyone 🖊️:
1/ In the early to mid-stage, trade the secondary market; whatever is hot, just follow the sentiment. The bold thrive, the timid starve. Don’t engage in project research; just trade coins, just trade coins, just trade coins.
2/ In the mid to late stage, the time of buying whatever rises has passed; it’s time to start playing various new projects, and the cost-effectiveness of harvesting will improve.
3/ Projects that emerge in the mid to late stage typically fall into two categories.
A) New entrepreneurs, graduates from various prestigious American universities, with halos around them and a lot of VC funding. These types of projects generally fail, but the wealth effect after the coin is listed can still be significant.
B) Major cash grab rebranding; knowing the bull market is about to end, they are on a fast-cutting path. The resources of major cash grab exchanges are quite solid, and their listing capabilities are astounding.
4/ Senior VCs know that every cycle produces two DePIN god-tier projects and two GameFi god-tier projects.
The characteristic of a god-tier project is: prolonged consolidation, followed by a powerful surge, which also follows the three-wave theory.
The founders of the recent two cycles of god-tier projects are almost all Asian with long-term Western residency/study backgrounds.
5/ Every cycle has a very malicious harvesting event, usually initiated by a super large project, with a broad audience and many believers.
6/ Projects that survive more than two cycle rounds are opportunities to watch; abnormal fluctuations often indicate something unusual.
7/ Ponzi coins perform in every round; currently, several Ponzi coins listed on BN have been shining brightly in two consecutive rounds, with contract performances also experiencing wild swings, making retail investors love and hate them.
8/ Once a public chain project launches its product and the ecosystem fails to grow, it cannot recover; there is no such thing as a comeback.
9/ DeFi projects are evergreen, with the possibility of a comeback.
10/ Don’t be afraid of a rising Ponzi; if you’re preparing to buy the dip, don’t hesitate, just go in with 20% first.
11/ About running away
Many people are always worried about some high deposit volume protocols/exchanges running away; this is something to consider at the end of a bull market. Think from a human nature perspective: if the project party really wants to run away, why not cheat more before running?
Today, someone said HyperLiquid would run away; I believe that at this stage, the probability is zero. Their TVL on arb is indeed a solid 2 billion; such a level of capital will not run away, but may collapse due to operational issues.
12/ About liquidation
In the medium term, you can bear some floating losses; in the later stages, you need to increase your frequency of liquidation and cutting losses. These are all painful lessons.
13/ About the self-discipline of the project party
Don’t play with project parties who go to the gym daily and have bulging muscles; when watching project party videos, observe their age and physical condition. The best condition is that they are slightly overweight for their age, indicating they often binge eat, have irregular sleep, and lack self-discipline.
This logic has underlying principles, and some senior VCs also consider this when making primary investments.
14/ How to assess whether there are skilled advisors behind the project party or if they have a good market sense.
(This point is worth expanding on a lot)
First, look at the timing of their coin launch.
Coins launched in the mid to late bull market are relatively better.
Logic: Go with the flow; Duan Yongping once said: Dare to be behind others, and eventually surpass them.
Coins launched at the end of a bull market are not viable.
Logic: If the team's product or resources are not ready, hastily launching a coin is a recipe for disaster.
Launching coins in a bear market is quite foolish.
Logic: If you don't know how to utilize the right timing, usually there are no smart Chinese or founders in the team; it's a first-time coin launch in the crypto space.
15/ Founders launching their coin for the third time, with not much voice for rights protection in the previous two times, have relatively the highest success rate.
16/
The Web3 industry is a sufficiently magical market that can reshape many people's worldviews.
Reflecting on the missed opportunities in the previous two bull market cycles, I have an important experience. I underwent self-brainwashing and correction this cycle, so I didn’t miss out on ZKF's 20-fold returns.
This experience is called: A product model that appears extremely clumsy and ridiculous, even insulting to your intelligence, must be checked. If the product and team are decent and not those pure idiots or scammers from lower-tier cities targeting naive investors, congratulations, you’ve struck gold.
The major opportunities I missed in previous cycles were ones I didn't take seriously, thinking they were insulting to my intelligence; instead, some friends foolishly invested and gained freedom.