Editor | Wu Says Blockchain

This episode of the podcast discusses the investment hotspots of AI Memecoins and the recent surge of ACT. Guests defioasis, Cat Brother, and Chen Yiyi share their investment experiences and lessons learned in cryptocurrencies like ACT. Defioasis made a profit of 2 million RMB in just a week of building positions; Cat Brother, however, cut losses before it was listed on Binance, perfectly missing the opportunity to get rich. Additionally, this podcast includes a discussion on the market logic behind ACT's surge, analyzing community enthusiasm, chip structure, and how to assess the potential and risks of Memecoin projects. The guests also share their personal long-term optimism about ACT, low-position accumulation strategies, experiences of cutting losses on GOAT and ACT due to misjudgment, and in-depth insights into Memecoin investment from an on-chain data analysis perspective.

Please note: The views of the interviewees do not represent those of Wu Says, and Wu Says does not endorse any products or tokens. Readers are advised to strictly comply with the laws and regulations of their location. Investment is a personal action of the interviewees and is unrelated to Wu Says' work.

Reasons for Buying ACT and the Accumulation Process in Early October

Cat Brother: Let’s have defioasis, who made 2 million, introduce the entire event surrounding ACT.

defioasis: (The following is content I posted on my personal Twitter) The recent surge of ACT was largely a matter of luck and unexpected wealth for me. Until around 6 PM the day before yesterday, I was still placing orders on Bitget at 0.021-0.022 to buy ACT, and this was less than a week from my first purchase of ACT on November 5. I thought ACT would explode due to AI Meme, but I didn’t expect to see it so soon with the spot listing on Binance, which also triggered a general market rally. (Of course, Binance also listed PNUT at the same time, but that was completely outside my initial considerations.)

I reflected on why I ended up buying ACT.

First, I recognized the narrative of AI Meme. The earliest and largest AI Meme this year, in my opinion, are WLD and TURBO. After being listed on OKX, TURBO hovered around 3 million dollars for a long time, providing ample entry time, and eventually surged nearly 300 times in the secondary market. WLD's FDV, if I remember correctly, once exceeded the fourth largest market cap, as a meme narrative of OpenAI.

The logic of AI Meme is simple yet profound:

AI outside the crypto space is rapidly iterating and developing, riding a wave of technological and capital growth;

Meme is the hottest track within the crypto space. The hottest narrative from outside the crypto space combined with the hottest track inside has great potential. The narrative of AI Meme will continue to iterate with the development of AI technology and may have both lagging and leading characteristics. Additionally, from the example of TURBO, a good Meme will have enough time to lay out and enter, as the community also needs time to settle, which aligns with my long-term logic of trading altcoins.

Secondly, the opportunity presented by Binance's perpetual contract listing for the AI Meme leader GOAT. To be honest, I almost completely missed GOAT. However, the news of Binance listing the GOAT perpetual contract on October 24 made me pay attention to AI Meme again, as Binance has the ability to lead the track, and the logic of AI Meme is simple yet profound.

In the last two or three days of October and the first few days of November, I created a watchlist and added 7 tokens: ai16z, degenai, ACT, LUCE, BAN, Shoggoth, and CB. The overall focus was on AI Meme, with a few other popular narrative memes added. Although there were 7 tokens, my top choices at the time were actually ai16z, ACT, or LUCE, later adding BAN, while LUCE never reached my desired position, and I was a bit late to focus on BAN and missed the opportunity. The commonality among these choices was that the narratives were simple, clear, and unique, and most importantly, their market caps were around 2-3k, or I believed there was a chance for a pullback to 2-3k. ai16z is about AI agents doing fund DAOs and fund managers, with an a16z meme; ACT breaks the black box of AI agents; BAN is the Sotheby’s banana; LUCE is the Pope's pet. A side note here is that ai16z, LUCE, and BAN were all born around the same time, and their narratives were enough to provoke user emotions. Individually, they might not have been at the market cap level at that time, but unfortunately, their timing coincided.

I entered ai16z at 0.025 dollars. Initially, I prioritized ai16z over ACT, but later ai16z dropped below 0.01 and then quickly rebounded with significant volatility. Additionally, it had a relatively small liquidity pool on Raydium and a smaller number of holders (about 4-5 thousand holders), so I ultimately chose to heavily invest in the more stable ACT with a larger holder base.

The third point is how to choose specific coins within the defined market cap range and watchlist, which brings me to insights from Murad's speeches.

I have watched some of Murad's speech videos three or four times, and we even did a podcast with him. There are a few points I find very important, of course, with some of my own observations and understanding added: a pullback of 70%-80% in the 2-3k market cap;

A large holder base; the number of holders is increasing;

There are influential figures on the timeline spreading the word, like wizards.

Especially regarding the number of holders, I used to not understand this metric well and thought it had a lot of false elements, but until I saw the data analysis from Scopescan at the end of October: the signal of increasing holders has an average win rate of 65% in Memecoins, and for some tokens, this number even reached 90%. Because of this metric, I ultimately chose ACT over ai16z for my heavy investment.

Additionally, there are some bonus points, such as whether the Memecoin has been listed on secondary exchanges. For example, ACT was listed on Bitget, while ai16z was not yet. Being listed on a secondary exchange means a huge possibility of market maker involvement, which is very important for Memes. As personnel flow between first and second-tier exchanges, their listing logic tends to be similar.

Finally, I seek a personal investment strategy that aligns with Memecoins. My core investment philosophy is to focus on alpha track leaders and beta, favoring buying and holding, reaching targets, and reducing the frequency of purchases. Friends who know me are aware that my largest core positions are ORDI and PENDLE Eco, which I have held since the second half of last year without selling. Throughout the first half of this year, I hardly made any large trades. Of course, during this time, I was playing with small amounts in memecoins, but it didn’t really earn me much, more so keeping my sensitivity to the track and narrative. I gradually explored my own approach to Memecoins, focusing more on tokens with market caps around 2-3k compared to earlier PvP strategies.

Of course, luck is still very important, and I never expected the sudden listing on Binance; I was actually prepared to hold for months. However, I believe some of my experiences are worth referencing: a good Meme will have enough time to lay out, go through ups and downs, and a 2-3k market cap is optimal for me, with the number of holders continuously increasing, and patience in holding. An interesting fact is that Murad is also not a PvP player. Although this logic has caused me to miss out on coins that almost never experience significant pullbacks, like GOAT, I still have to stick to what I’m good at.

One detail: when Binance announced the price surge to 0.2-0.25, group members asked if they could still chase. At that time, I noticed a price difference of about 10% between Bitget and the chain, so I boldly told the group members to go ahead, even if it meant buying above 0.3. I also chased the price in that range, but I was actually quite anxious inside. Even though I had reached my 10x profit target, my style is indeed to ambush rather than chase. A few minutes later, I felt I had FOMOed and sold most of my chasing position at market price. Looking back, this chase, although logical and seemingly lucky in hindsight, made me very anxious during the downturn, leading to strange operations. When operating in a way I’m not good at, it’s hard to stay calm.

Chen Yiyi: Actually, I was also selecting targets for AI Memecoins. At that time, the top one was GOAT, and the second one, based on core narrative, community, and trading enthusiasm, was ACT. However, there were indeed some issues with the public sentiment around ACT at that time, mainly due to AMP's actions leading to community dissatisfaction. I remember Cat Brother bought ACT early on and said in the group, "I bought it!" but then cut losses only to see it soar. Later, I asked Cat Brother in the group how it was going, and he said there was a lot of division in the ACT community, mainly dissatisfaction with AMP's actions. At that time, I felt there was a significant market divide, but the enthusiasm remained high, and the FDV wasn’t too high, so I thought this timing was still appropriate.

In fact, the entire market's attention was also focused on AI Memecoins at that time. If ai16z allocated some funds to ACT, it might have been a good start. My entry timing was when AMP announced a pause on selling coins to the community, but AMP didn’t clarify how much they held or how they would handle it in the future. So, during that chaotic phase, I built my position. After they sold out, the community was relatively confused, and everyone was discussing whether the project team would continue development after clearing out. Throughout the process, I gradually increased my holdings, somewhat similar to defioasis's strategy, haha.

Developer Sell-off of ACT Triggers Community Trust Crisis and Loss-Cutting Experiences

Cat Brother: I happen to be the opposite, becoming a reverse observation sample, haha. Chen Yiyi said that when developers cannot guarantee how much they will sell in the future, he started building positions during that chaotic phase. I, on the other hand, started my first sell-off at that time.

Let me briefly talk about my recent experience participating in the Memecoin craze. Initially, I bought GOAT when its market cap was around 300 million. Although that’s not low, I found the related reports interesting, and this meme seemed fresher compared to the various "cat and dog" zoo projects from before. In fact, my approach to choosing memes isn’t based on on-chain data, which seems easier to analyze, like the number of holding addresses. While data serves as a reference, I rely more on intuition when selecting Memecoins, similar to the "gut feeling" judgment that Chen Yiyi mentioned. At that time, I found the "AI + Meme" combination of GOAT quite appealing, so I started to enter the market. However, after I entered, its price began to drop, but I kept buying more as it fell. Later, it rose to 600-700 million, and then Binance listed its contracts. On the day the contracts were listed, the price peaked at around 800-900 million.

For a meme, I felt that 1 billion might be a tough barrier to break. So, I started thinking about how to choose the next meme, which led me to notice ACT. In fact, I believe the rise of the entire ACT community owes a lot to the role of the wizard.

At that time, I learned that ACT was one of the two AI projects funded by a16z. After looking into it, I felt the story was quite good, considering it a potential "dragon two." At that time, ACT was priced around 0.03, while GOAT was about 0.07 to 0.08. Personally, I thought GOAT was the first dragon, and ACT could be the second. Logically, ACT's market cap should reach at least 1/10 of GOAT's, but it hadn’t yet, so I started to accumulate more, buying more as it fell. However, something absurd happened later: the developers started selling tokens. The community communicated with him, asking if he could refrain from selling and lock up the tokens for future sales, but they couldn’t get in touch with him. Later, he explained that he was attending his grandmother's funeral, not a wedding, but a funeral.

This was truly ridiculous, and the developer insisted on selling. The community urged him not to sell, but he disagreed, even saying, "I’ve already sold 2%, whether I continue to sell depends on the community's performance." People in the community, including the wizard and some core members, found this situation absurd. That night, I felt it was too much, so I sold all my ACT. At that point, Yiyi started to enter the market, picking up my shares at a super low price, and from an on-chain data perspective, he thought the project was still decent.

Later, I couldn’t help but start re-entering ACT and building my position again. I remember my first re-entry was around October 23, when the market cap was about 30 million dollars. I thought the project was still good, so I bought some at around a 20 million dollar market cap. By November 8, just three days ago, I suddenly felt that the AI and Meme craze might be coming to an end, and I thought a new trend in the VC field might be coming, so I decided to shift some funds. I didn’t expect that today Binance would actually list ACT. So, although I was an early participant, I not only didn’t make a profit but also cut losses on ACT twice.

The Logic of Long-Term Holding ACT: Opportunities in Low Market Cap Memecoins

Cat Brother: I have another question for the two seniors who have already made money. From my perspective, many Memecoins eventually die, especially before ACT was listed on Binance. Why did you still dare to keep accumulating and increasing your holdings in ACT?

defioasis: First of all, I have always paid attention to Memecoins with a market cap around 30 million dollars. I believe that Memecoins in this market cap range are the most suitable for holding because if they can maintain this range for a longer period, it usually indicates relative safety.

Regarding the AMP incident that Cat Brother mentioned, I believe the selling event of AMP actually provided a great opportunity for ACT. At that time, I watched Murad's video, where he mentioned a point: a good Memecoin can survive even after experiencing severe fluctuations, such as multiple drops of 70-80%. So why does it have such large fluctuations? Usually, it’s due to special events happening within the community. For ACT, the AMP selling incident was an absurd situation, but it also became an opportunity for the development of the ACT community. People like the wizard organized themselves and launched a counterattack against AMP on social media.

Additionally, when Cat Brother said that the AI Memecoin track might be coming to an end, I thought the opposite. I believe it is precisely because of this differing viewpoint that I remain optimistic about ACT.

defioasis: My logic is that with Binance listing GOAT futures, I believe Binance has the ability to open a new track. Moreover, I am very optimistic about the potential of AI in the crypto field because AI technology is continuously iterating and updating outside the crypto space. The reason why a market like Memecoins can persist is that, apart from Memecoins, there are basically no other profitable opportunities in this space, so it won’t easily fade away in the short term.

At the same time, the outside capital's favor towards AI, the investment in AI technology and capital, combined with the narrative of Memecoins within the crypto space, I believe will bring significant development opportunities. Especially after Binance listed GOAT futures, I refocused on the AI Memecoin track, thinking this was an important opportunity.

The Role of Community Activity and Chip Structure in Supporting ACT

Chen Yiyi: I find some of Cat Brother's ideas quite interesting; you could almost be studied as a sample. I have always thought Cat Brother is the biggest alpha in this round. You know, when GOAT's market cap was 300 million or 350 million, he asked me if he could buy. I told him that it had just come out a few days ago, and there was a chance it could reach 500 million FDV on Bybit. If it got listed on Binance, it might rise to 600-700 million, around 1 billion. The odds were quite average, with only about a 50% chance of going up, while there could be a huge pullback. At that time, it was still uncertain whether the AI MEME sub-track would be established, and GOAT might just be a short-term speculation. Since GOAT had only been out for a few days, I told Cat Brother that the odds weren’t great and I wouldn’t recommend it. But Cat Brother still bought it, and I think he really has some insight.

Cat Brother: Not only did I buy it, but I also kept buying more as it fell.

Chen Yiyi: So I said Cat Brother has something, haha. From my perspective, regarding the AI Meme topic, many friends are focusing on two major directions: one is AI, and the other is PayFi. In the AI field, AI agents are currently one of the hottest narratives, right? Many VCs and large institutions are participating in this area, and the market attention is very high, especially among influential people in the crypto space who are looking in this direction.

I think the core of the narrative is very important. The current first and second dragons have basically been determined as GOAT and ACT. From the community atmosphere, whether the discussions are positive or negative, the heat is very high, and there are always people pushing and taking action. Therefore, I believe AI Memecoins represent a very segmented and worthy track to pay attention to, especially with the emergence of new concepts like AI agents, which everyone is eager to speculate on.

Additionally, one point I have been paying attention to is the chip structure. Regarding the chip structure, I don’t just look at the on-chain address data on Solana because it’s easy to manipulate. Many exchanges check the project's decentralization and control level before listing. If a project is highly controlled, with one-sided rises or falls, exchanges generally won’t accept it because they prefer a relatively dispersed chip structure to avoid easy market manipulation by the project team.

So I pay close attention to the selling data of AMP and the situation of related addresses, including some subsequent inflow of funds. I admit there is indeed some speculation involved, but overall, I believe AI Meme is a segmented and promising track that deserves priority attention and selection of targets.

Another interesting point is the CultDAO project we mentioned earlier. I think that funding could be used to promote some small projects. If ai16z invested in ACT, it would be a great breakout point.

defioasis: Yes, I’d like to add a bit more; I forgot to mention the growth in the number of holders. I used to think that the growth in the number of holders was not useful because it could be faked by creating a bunch of low-value addresses to inflate the numbers. But later I found that, as Murad mentioned, for Memecoins, the number of holders needs to be in a state of continuous growth to have a higher probability of success.

Actually, when I looked at ACT's position in the AI Memecoin space, the first thing I noticed was that it had a relatively large number of holding addresses. The second point is that after the AMP incident, the number of ACT holding addresses continued to grow. So from this perspective, I think it reflects the community's activity, indicating that the community is pushing and making efforts, which can also be seen from the growth in the number of holders.

Cat Brother: Oh, it seems you both have a consensus that ACT can indeed be considered "dragon two" before it was listed on Binance. However, the reason I cut losses might have created a divergence here. I also looked at some on-chain data at that time, but I found that not only were GOAT and ACT growing, but other projects like Octopus and GNON were also. Looking at the growth of on-chain addresses and the community's voice, I felt that ACT might not qualify as "dragon two," as there were many competitors with similar market caps and address numbers.

Chen Yiyi: You know ACT has the narrative of a16z, right?

Cat Brother: Yes, from the current perspective, that is indeed the case. You mentioned that defioasis also bought the ai16z project. During that time, there were indeed many AI Meme projects, including ai16z. So do you think it really has a connection with a16z? Looking at it as "dragon two," it doesn’t seem to have such a strong reason. What do you think about this situation?

Cat Brother: The reason I cut losses was that I felt ACT might not necessarily be the so-called "dragon two." At that time, it had many competitors, and I couldn’t determine who the second dragon was, so I simply gave up. I even considered waiting for GOAT's price to drop before buying because GOAT was still relatively certain as the first dragon. Looking back now, it might be because of the a16z background that led everyone to have the impression of it being the second dragon. How significant do you think a16z's role has been in the development of AI Memes?

Chen Yiyi: I think it’s because Marc has been consistently promoting GOAT, and this binding relationship is very clear, so the connection between GOAT and a16z is relatively close.

Cat Brother: But he hasn’t promoted ACT.

Chen Yiyi: Indeed, he hasn’t promoted ACT, but they have indeed invested in ACT.

Cat Brother: Right, in that case, a16z has indeed sparked a lot of discussion and emotions within the entire community.

defioasis: This is a consideration of multiple factors. First of all, a16z has only invested in two or three AI projects, and only two of them are directly related to ACT. Additionally, under the premise of the growth in the number of holders, I believe the scale of the holders should be the first focus. In the AI Memecoin track, ACT's holder scale is its base, and the scale itself is relatively large.

Cat Brother: I remember there are about over 10,000 holders.

defioasis: Yes, the number of ACT holders is still continuously growing. In contrast, I have looked at some other AI Memecoins, such as the Shoggoth project, which has a significantly lower holder base compared to ACT. Additionally, other AI Meme projects have not received investment support like a16z. Look at ai16z; why is it called that instead of something else? It’s because this track has the backing of a16z, which is also a kind of meme.

Cat Brother: From another perspective, why not refer to ai16z as "dragon two"? How should we understand this question?

defioasis: Actually, I haven't been fixated on the "dragon two" issue, but I can explain. I mentioned earlier why I chose ACT over ai16z. I also bought ai16z at a price of 0.025, but its volatility was very severe, rising from 0.025 to 0.03, then dropping to 0.01 or even lower, before quickly rebounding. In comparison, ACT's volatility is smaller and more stable. The ai16z project has a smaller pool, which contributes to its greater volatility.

Moreover, in terms of the number of holders, among projects in the 20 to 30 million dollar range, ai16z has a relatively low number of holders, only around four to five thousand, while ACT has at least two to three times that number. This is also one of the reasons I decided to heavily invest in ACT.

Chen Yiyi: After AMP's sell-off, the community released a chart showing the changes in the number of holders, comparing ACT's holders to those of other popular projects at the time. This actually reflects the community's responsiveness and energy.

Cat Brother: Right, I saw that too; that chart is indeed a good reference.

Chen Yiyi: After the AMP sell-off, the community quickly reacted and turned the situation around. At that time, the price briefly dropped over 30% on-chain, but the community stabilized itself quickly by comparing the trend of ACT holders with other popular projects like BAN, turning AMP's sell-off into a somewhat positive outcome to mitigate the panic and dissipating consensus caused by ACT's price drop. This shows that the community really has the capability and strength to take action.

defioasis: Yes, this aligns with Murad's viewpoint that a good Memecoin can still rebound even after experiencing a drop of 70-80%. ACT is a great example, demonstrating the project's strong resilience.

Cat Brother: I completely agree.

Market Positioning and Controversy of ACT as "Dragon Two"

Chen Yiyi: The projects you mentioned, like Octopus or GNON, are actually not as frequently heard in the community compared to the voices of ACT and GOAT. So I think these are the real leaders.

Cat Brother: That’s true, but I also fall into a kind of "information cocoon" skepticism. Because at that time I held ACT, I would search for related content on Twitter, and the algorithm would push a lot of ACT information to me. I think this is an effect of the information cocoon. If I held other tokens and searched for related content, the algorithm might similarly push positive information about that token to me. So sometimes, the growth in data and community unity doesn’t necessarily mean success. I can give a counterexample, like the ARC-20 or Atomicals projects; not all projects with increased community heat and address numbers achieve good results.

Chen Yiyi: Yes, purely looking at some superficial data can indeed lead to biases. To be more accurate, one should delve into the community to understand what they are actually doing, or even maintain close contact with the core builders to see what they are up to.

In fact, before ACT was listed on Binance, many people were still in a wait-and-see state and hadn’t deeply understood the community's progress. Now that ACT has skyrocketed 20 times, it can be said to have broken out. Just yesterday, I was complaining to a friend that the whole market was rising, but ACT was falling… Cat Brother: I was actually relieved that I cut my losses.

Chen Yiyi: Some things can indeed only be judged by vague feelings. You know they are doing things, and you see on-chain data reflecting that the project is improving, but the consensus of funds isn’t as strong as that of other larger conspiracy group projects. I think by observing the core builders and their ability to solve problems or pull resources, one can better assess the project. Just like PEPE and PEPE 2.0, I remember when PEPE 2.0 was opening a Space, there were thousands of listeners, and many people were urging for a PEPE 2.0 dashboard.

At that time, I felt that there was a market demand for projects with new narratives, and since I missed the GOAT trend, people were still looking forward to the next GOAT 2.0. In this case, ACT, with a16z backing and a narrative similar to GOAT, becomes very attractive, especially with a lower market cap. There are also capable members in the community pushing for it, and with the potential funding from ai16z, I believe ACT has a great market position.

defioasis: Overall, that’s the case.

Cat Brother: You also mentioned the PEPE 2.0 situation earlier. Do you think ACT's subsequent trend will follow a similar path to PEPE 2.0?

Chen Yiyi: I think now that Binance has listed ACT, it has basically started to trend in that direction, and many people have made money.

Cat Brother: Do you think it has the potential to reach a market cap of 6-7 billion? Or does it need time?

Chen Yiyi: It definitely needs time; there has to be a lot of turnover. I think in the short term, some mainstream exchanges might still have some upward space, but how to say, at least it can push towards GOAT's previous high.

defioasis: Yes, let’s observe for now. I think it’s still a bit early to compare with PEPE; it’s better to benchmark against Neiro. In fact, looking at this wave, PEPE and Neiro are representative, and Neiro currently only has a market cap of 1 billion. In comparison, I feel that ACT's price might already be a bit high in the short term.

Cat Brother: In the short term, the price does seem a bit high, even though it’s only around 500 million in market cap now.

defioasis: Yes, I added to my position when it was at 0.25. I was indeed a bit hesitant. When I checked the on-chain data, I found that there was a 10% price difference between the exchange and on-chain, so I thought it wasn’t a big issue, even if I took a 15% hit. However, after buying, I sold off more than half. I initially invested 100,000 USDT, but felt my position was a bit heavy, so I quickly sold 70,000 USDT, which made me feel much more at ease.

Cat Brother: I understand now; I also want to share my reasons for choosing to cut losses the second time. Although Chen Yiyi recommended that I hold ACT, I also know that situations where Memecoins come back to life are rare, indicating that the project quality is good. However, I chose to cut losses because my position was too heavy, which posed too much risk for me.

defioasis: Yes, sometimes having too heavy a position can indeed make one uneasy.

Chen Yiyi: Exactly.

Cat Brother: Statistically speaking, among projects with a market cap of 10 to 20 million, only a few will ultimately succeed. Statistically, a few out of ten projects may also perish. I also invested in dozens on Solana, and if those all lost, the losses would be significant. Moreover, I’m not exactly wealthy, so I ultimately chose to cut losses, haha. At such times, it’s very hard to hold on.

defioasis: This indeed involves a matter of faith. The information cocoon effect you mentioned is actually because you keep searching for related content, and the algorithm keeps pushing relevant information to you. Why do you keep searching for it? It’s because you have doubts about the project and want to track developments at all times, needing someone to call the shots, which indicates that you are still somewhat uncertain inside.

Cat Brother: Yes, I do feel a bit uncertain.

defioasis: This indicates that there is still uncertainty in your mind. My personal strategy is to buy and then hold firmly. Of course, I didn’t expect ACT to rise so quickly by 10 times, or even 20 times. Even if it hadn’t risen that much, I would still be willing to hold for three to four months because I am optimistic about it.

Chen Yiyi: I want to counter this. Actually, I’m not countering this viewpoint, but saying that you might not have put in such a heavy position. You see, defioasis added 100,000 USDT yesterday, but later felt it was a bit too much, so he sold 70,000, keeping 30,000; Cat Brother heavily invested and then cut losses to clear out. What I want to say is that having too heavy a position can lead to operational distortions.

Cat Brother: Yes, ACT is undoubtedly a unique case.

defioasis: Although I had already made some profits before, I still hesitated when adding to my position later.

The High Risks of Memecoins and Target Selection Strategies

Cat Brother: Actually, the reason for inviting you here is not to promote ACT, but to make everyone aware of the high risks of Memecoins. My case of ACT rising 20 times yet cutting losses illustrates the investment risks of Memecoins. Especially in the AI Meme track, the PVP situation is severe; it might double one second and drop to zero the next. This situation is quite common. So, if you were to look for another project similar to ACT, what angles would you consider for selection? Let’s have defioasis share first.

defioasis: First of all, I would still choose from projects with a market cap of 2 to 30 million dollars, mainly based on several criteria. First, if a project has previously risen and then dropped by 70-80% but can still survive and maintain a market cap in the 20 to 30 million range for a while, such projects are relatively stable. Second, I also pay attention to the movements of exchanges. For example, the reason I refocused on the AI Memecoin track is that I saw Binance listed GOAT futures. I believe Binance has the ability to lead a new track, so I will pay close attention to its choices.

Additionally, when second-tier exchanges list similar Memecoin projects, that is also an important signal. Second-tier exchanges can provide a great exposure platform for projects, and the personnel flow between second-tier and first-tier exchanges is also very close. Someone might stay at a second-tier exchange for a while and then jump to a first-tier exchange, bringing the experience accumulated at the second-tier along with them. Finally, it’s essential to look at the trend of the track itself; currently, the hottest area is still AI.

I believe AI is a sunrise industry that is continuously developing and iterating. AI Memecoins have also gone through several waves of development, starting with OpenAI's Worldcoin, then the Turbo project triggered by GPT-4, and later the emergence of more AI agent trends. These projects are constantly evolving, reflecting the rapid iteration of the industry. So this is my main thought process for selecting projects.

Chen Yiyi: Haha, defioasis shared his experience in selecting coins and his views on the future development of the AI Memecoin track, which is great. But back to Cat Brother's question, I often joke with Cat Brother that good things are easily recognizable by everyone. For example, if we see a beautiful girl on the street and all three of us think she’s beautiful, she probably is; but if only two of us think she’s beautiful and defioasis doesn’t, then there might be a disagreement, haha.

This is actually a real issue. When a project narrative comes out, what is everyone’s first reaction? For instance, previously, people might have thought that the narrative of the BAN—"Banana" project was quite good.

Chen Yiyi: Back to the point, I personally believe that, as you said, "the feeling has come" is very important, or in other words, having a general understanding of the narrative trends by observing many Meme projects. Meme projects are actually divided into many tracks, such as the zoo series, mascots, artworks, and now AI Memes; these are all different subfields. The first step is to find leading projects in these subfields, that is, to identify projects with strong narratives. The second point is to recognize some key nodes for traffic distribution, which I think is very important.

Why do people want to build good relationships with KOLs? Attending offline meetings and social interactions is actually aimed at establishing connections with these influential people, as traffic is often distributed from them. Various communities and token holders are influenced by these influential figures. For example, today many people are paying attention to Formula news and preparing to snipe Binance announcements because of the importance of these traffic distribution nodes. Just like when the Formula releases news, buying in two seconds can yield millions of dollars in profit; today, my friend was operating next to me, buying in four or five seconds after the news was released, and it doubled.

Therefore, to acquire these traffic distribution resources, one needs to get closer to the community and influential KOLs.

Of course, like defioasis, seeing the price pull back but the project is still alive, choosing to enter during the second wave is also a good logic, provided that you determine that this project has potential in the track, even if the first wave of people exits, new players will still be interested in its narrative. For such new early projects, I personally would choose projects with a market cap around 3 million FDV, ride the wave, and then exit. If I want to select some more certain targets, I might not have enough time and energy to pay attention to all early projects, so I would pick projects with FDV between 10 million and 20 million like defioasis, gradually buying in when building a position rather than investing all at once.

I generally try to avoid chasing highs. There are always opportunities in the market, with projects like GOAT, BAN, LUCE, ACT, etc., constantly emerging. For example, there were also Moondeng and NEIRO earlier, with new projects popping up basically every few days. The current market is overall rising, which raises a question: Does the market really have enough funds to support the growth of these projects?

Additionally, there are still many small-cap projects in the market, such as those with a market cap around 20 million, which everyone can pay more attention to. The community might also speculate on Binance's recent listing strategy through the timing of small-cap projects like Nerio and ACT, possibly using projects within this valuation range to create a wealth effect.

defioasis: This is also why I believe that Memecoins with a market cap of 20 to 30 million have particularly great potential. Projects that have survived multiple significant downturns may have greater speculative space in the future, and exchanges usually favor projects that have experienced multiple rounds of chip turnover.

Cat Brother: Alright, that wraps up this episode of the podcast. Lastly, I want to remind everyone that the content shared today does not constitute investment advice. This episode was mainly due to ACT's sudden massive increase, reaching 20 times, so we did a light-hearted sharing based on personal experiences. Everyone should still invest cautiously, especially when participating in high-risk tracks like Memecoins. Thank you for listening.

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