The following text is organized from a series of Twitter Spaces #DialogueTraders, hosted by FC, founding partner of SevenX Ventures, Twitter @FC_0X0.
This episode's guest: the honest Mr. Mai, Twitter @Michael_Liu93.
Mr. Mai's MEME Journey: Addicted to MEME After a 100x Profit in 5 Minutes
Before getting into Crypto, Mr. Mai followed a very "orthodox" financial path: studying finance in college, working as a banker on the sell-side after graduation, and then moving to the buy-side. In the buy-side, he focused on the enterprise services sector, where many blockchain founders were looking to create BAAS, or Blockchain as a Service, which allowed him to see this new technology.
By 2020-2021, Mr. Mai officially entered the Crypto industry, managing some secondary positions for traditional finance industry bosses, mainly in Bitcoin. From that time on, he began spending a lot of time every day researching new things and looking for Alpha.
In this cycle, Mr. Mai firmly believes that the Alpha is MEME, so he now spends 60% to 70% of his time on MEME, also engaging various traditional finance industry bosses to play together.
His addiction to MEME originated from a trade that yielded a 100x profit in just five minutes.
At that time, the market was speculating on Elon Musk's signature, and Mr. Mai took some positions in Dragon One TROLL and Dragon Two ZUZALU. The question was, which coin would become Dragon Three? Mr. Mai and his friends thought that Vitalik Buterin's signature might have speculative potential, so they bought TCATI (Green Tea), a cat-themed MEME, for a market cap of around 20,000.
About five minutes after buying, this coin suddenly surged to a market cap of around one to two million, turning a few hundred dollars into thirty to forty thousand dollars in an instant.
This was actually Mr. Mai's first real encounter with MEME. Although the 100x profit only recouped his initial investment, this trading experience made him feel, "MEME is really fun."
He then began to spend more time studying MEME, understanding MEME, and trading MEME, gradually developing his own trading strategy.
Why Are Strong Whale Markets More Fun?
PVP markets are a typical zero-sum game where everyone competes to discover a hot trend first or create one, acquiring bottom positions and then selling off everyone else when they feel it's a high point, making a profit.
In contrast, whale markets are a game where retail investors and whales mutually benefit. During a MEME's lifecycle, if a whale wants to push the market cap higher and get listed on Binance, they need to use their funds to find callers, accumulate and wash positions, pump the price, create advertisements/news, and drive the hype.
If a whale is skilled at doing these things, it means they are good at storytelling, have substantial capital, and possess various relationships with callers and exchanges, making it a win-win situation for both retail investors and whales.
So how can one determine if a market is a whale market?
Mr. Mai provided a perspective: observe if there are deliberate wash trading behaviors in wallets, i.e., rapidly buying and selling the same asset within a price range in a matter of seconds. The purposes of whale wash wallets include:
- To be marked as new wallets by tools like GMGN.
- To disperse positions in preparation for pumping.
However, as more information is revealed by tool providers, the methods used by whales are constantly changing. This is good news for retail investors because whales will need more time to collect positions and prepare for pumping, giving retail investors more time to identify which whale markets are strong.
How Do Whales Operate a MEME on Solana?
Early Stage: Accumulating Positions Internally, Launching on Pump
- Due to the "anti-whale" sentiment in the market after the NEIRO case, whales will initially hide themselves, allowing the MEME to appear as a community-driven project while they start accumulating positions.
- During the internal accumulation, the biggest enemy of the whale is bots. There are many bots that check the volume of internal pumps, and once they detect new wallet purchases (5-10 SOL), they will immediately follow suit.
- Once enough positions are accumulated, usually over 75%, they will launch on the pump.
Mid Stage: Pushing Volume in Rounds
- First Wave: Launch. They find some Tier 3 and Tier 2 callers while coordinating with their market makers, pushing the market cap to the range of 5 million to 20 million, then quickly dumping.
- Second Wave: Explosive Surge. Deploy the funds gained from the first wave dump, usually all funds, market making while finding Tier 1 callers to shout out, creating a surge that prevents anyone from acquiring cheaper positions.
Late Stage: Listing on Exchanges
- Whether they can get listed on exchanges, including Binance, is largely a matter of luck, and whales are also watching for this. If the listing goes smoothly, the liquidity faucet opens, and subsequent operations align with the secondary market.
- After listing, market making is usually handled by wintermute.
The MEMEs BAN and AI16Z are typical examples of "whale markets": the whale spent a long time accumulating positions early on, made a significant first surge, then dumped to gather enough funds for subsequent market making while also accumulating at the bottom for a direct second surge.
How to Get Involved with Strong Whale Markets?
There are two strategies:
First, buy in after the first wave ends and before the second wave begins.
During this phase, the whale is continuously accumulating at the bottom. If you can find traces of their accumulation (mainly by observing wallets), you can follow in and buy.
Second, decisively chase after the second wave starts.
At this stage, the whale will likely collaborate with Tier 1 callers to quickly push the market cap higher with the funds accumulated from the first wave dump, seeking a listing. Generally, once the second wave starts, true strong whales rarely allow the coin price to retrace even slightly for retail investors to get in. So if you observe that the second wave has started and has surpassed the first wave, you can buy in at a higher price.
Understanding MEME Through the Logic of Short Videos
In May, when I talked about MEME with Zepump during #DialogueTraders, he mentioned a viewpoint that MEME is to VC coins what short videos are to long videos. Mr. Mai also strongly agrees with this logic and explains the "commonalities" between short videos and MEME from the perspectives of "demand hierarchy" and "evolutionary path."
First, let's talk about demand hierarchy.
Why do people, especially those born after 2000, enjoy scrolling through short videos and MEME every day? Because they satisfy the most basic desires within:
- Short videos satisfy lust and the so-called "laziness." Young people's time is fragmented, and they have little entertainment time, so they can only gain very brief happiness by scrolling through Douyin.
- MEME satisfies greed. Young people generally feel that the threshold for wealth elevation is too high, so they are eager to take a gamble (to get rich quickly).
Next, let's discuss the evolutionary path.
- Short videos initially focused on UGC, user-generated content, but later you 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 whale markets are more fun, as they push prices higher due to their strong operations and substantial capital.
Ultimately, both short videos and MEME are part of a very attention-driven economy.
In the MEME Super Cycle, Which Coin Will Become the "New King"?
Mr. Mai firmly believes that MEME has already been established as a long-cycle phenomenon. Looking back two years from now, most of the MEMEs in the market today may have disappeared, but those that can persist will certainly be more, and there will definitely be a MEME that is more powerful than SHIB, and this MEME is likely already in the market.
Which coin could potentially become this "new king"?
First: $DOGE
The true leader in the MEME space, the "BTC" of MEME. After Trump took office, DOGE is likely to be listed on an ETF.
Second: $PEPE
The strength of PEPE lies in its early entry and the fact that its logic is difficult for many Chinese to understand. In fact, most coins that emerged on Ethereum are derivatives of PEPE, which has already become a consensus. In this cycle of MEME, it is hard to find a consensus as strong as PEPE's.
Third: $WIF
Fourth: $POPCAT
Between $WIF and $POPCAT, Mr. Mai is more optimistic about the latter. Interestingly, WIF has a market cap double that of POPCAT, but their pools are the same.
Currently, fewer people in foreign communities and conspiracy groups are discussing WIF; attention has shifted to POPCAT, which may also indicate a choice of capital.
What Callers Should You Pay Attention to for Playing MEME Well?
Internationally:
Murad @MustStopMurad, Crash @CrashiusClay69, Mitch @idrawline, OverDose @Overdose_AI, Moneylord @moneyl0rd, Ansem @blknoiz06, Spidercrypto @SpiderCrypto0x
In the Chinese community:
First: Wizard @0xcryptowizard
The Wizard is a builder, and following his trades feels relatively stable because he is continuously building, and the projects he builds have very good angles.
Second: Magnolia @0xmagnolia
Sister Hat has written a lot of valuable content, teaching everyone how to find MEME and how to win in this game. Moreover, Sister Hat often has a strong ability to catch trends, so she can serve as a good reference for where the hotspots might be.
Third: Timo @timotimoqi
Timo is a friend of Mr. Mai in real life, and they were both 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, three of which have gone up over a hundred times.
Finally, it's worth noting that a caller can be good one month but not the next. For example, the person POE previously had a great track record, but after becoming popular over a month ago, he started calling various rug pulls to exploit retail investors.
While you may not know what exactly happened behind the scenes, the lesson is: when looking at callers, you must take a comprehensive view. It's similar to short videos; they are just the ones recommending videos to you, not the ones you should be liking. The power to like should remain in your hands.
In Conclusion
I believe the core of playing MEME is to find a stage and trading method within your capability. In fact, no matter when you enter the market, you can always find your opportunities within MEME, which is the most interesting aspect of MEME in this cycle.
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