Author: jez

Translation: Deep Tide TechFlow

Traditional finance (tardfi) has decades of experience and a well-established regulatory system. These "investor protection" mechanisms, although often ridiculed, can effectively reduce risks. In contrast, the cryptocurrency space resembles the Wild West, a relatively niche arena where lessons are learned through painful experiences of traditional financial rules. In this environment, competition is unequal, and some people understand the "unwritten rules" better than others.

The purpose of this guide is to share these hard-earned lessons. Unfortunately, those who need this advice the most may be watching funny videos on YouTube or following lilmoonlambo instead of reading my article here (this is what writers of guides often think). However, I hope you, as an insightful reader, can find some helpful content within.

I compare cryptocurrency to a large multiplayer online game (MMO) because it has many similarities: health points, levels, online friends, player versus player (PvP), player versus environment (PvE), a bustling town square, and an economic system—only here, the "gold coins" are worth more than those in World of Warcraft. This is the origin of the "monetized metaverse."

The following content is sorted by the potential impact on your investment results (if you haven't implemented or understood them yet).

Teamwork: Don't Be a Lone Wolf

Many people entering the crypto world are naturally contrarian thinkers or prefer to go it alone. After all, it takes a lot of courage to ignore the advice of family and friends (if they know about it). Moreover, once you taste a bit of success, it's even easier to feel like you are "the only one." "I just need to listen to the market!"—a typical lone wolf would say.

But I want to tell you to give up this "lone wolf mentality"! The market is lagging; it only tells you where you went wrong after you make a mistake, and the pace of change in the crypto industry is so fast that there is no time for you to learn slowly from your mistakes.

You need to find a group of excellent teammates to strive together. These teammates should be moral, hardworking, and like-minded "workers." The most important quality is resilience—make friends with those who are frustrated by their mistakes and take swift action, and stay away from those who only "self-soothe." A high-trust chat group covers a wider range than you can alone and can quickly tell you what is right and what is wrong. The most helpful feedback is often straightforward and may even be harsh—but even indifference is a form of feedback.

If you can't find a team, reflect on your "value proposition." Generally speaking, unless you know and make friends offline, invitations to join a team are usually based on "what value you can bring" and "whether you fit in." The best teams are made up of strong individuals—improve your skills and reputation until you can join the team you want on equal terms, rather than being "charitably" included.

Here are some types of "great teammates" I have around me:

• Mentor: Someone who provides valuable experience early on, like me writing this guide now.
• Partner: Someone who invests 10 hours a day with you at critical moments, chatting about 2000 messages and making plans.
• Signal Caller: A perceptive partner who helps you distinguish which ideas are reliable and which are just "wild ideas."
• Explorer: Bolder partners responsible for discovering new opportunities for everyone to sift through.
• Guide: Technical experts who solve various technical problems.
• Expert: Advisors who provide professional advice in specific situations.

Many people think that so-called "secret organizations" are mysterious conspiracy groups, but they are often just chat groups made up of friends. They grow together and now have a certain influence.

The Importance of a "Home Base"

Not all group chats are the same. There is a special type of group chat called a "home base," which is the first place you log in to each day, the first place you reply to messages, and most importantly, the first place you share information.

When deciding whether to invite someone to join your high-trust group chat (to improve team efficiency), there is a counterintuitive suggestion: try to avoid inviting high-profile accounts, as they often already have their own "home base." Instead, those who are still energetic and do not have a fixed team, the "newbies," are the ones worth considering.

The Risk of Complacency

Every group chat has its lifecycle.

At its peak, most people in the group chat are full of passion and desire. This motivation often comes from those smart newcomers who have not yet achieved success but seem to have a bright future.

However, over time, group chats inevitably become complacent. Members gradually reach a higher level, and the "game" pace becomes slower and more organized. Daily discussions decrease, and topics begin to shift to life, politics, and other areas.

If you want to stay at the forefront of the industry, consider making friends with emerging, potential individuals and joining those group chats that are still in a "thirsty" state. Think about the passion and desire you had when you first entered the field, and immerse yourself in that atmosphere again.

Choose a Profession, Find Your Strengths

To achieve long-term success in this field, you must cultivate a real advantage. Simply buying tokens that are rising in a bull market does not count as an advantage—but being able to identify the signals of a bull market is key. Joining a group chat that teaches you how to operate step by step may benefit you in the short term, but this advantage often fades quickly. The real advantage lies in being able to earn money consistently and stably in a specific professional field.

Different strategies suit different personalities. If you are a patient and risk-averse player, you should not enter the high-risk arena of "pump.fun"; similarly, if you are naturally adventurous, it may be hard to stick around in liquidity mining because you may quickly get distracted by other things.

Here are some successful skill categories sorted by different risk preferences.

DPS - Traders

These players focus on directional trading, seeking high-risk, high-reward opportunities. Successful stories often overshadow the losses of most people. To become a DPS mainstay, you need to have a high risk tolerance, excellent risk management skills, strong psychological resilience, and the ability to maintain fighting spirit in the face of failure.

Trench Warriors

Shitcoin traders are a class with a wide disparity in abilities—those who perform poorly (or even at an average level) do very badly, while the top performers excel. Players like req and nbs can fully utilize on-chain information resources. If you consider yourself a "shitcoin trader" but have not yet mastered your on-chain analysis tools, you have a lot of room for improvement. In my view, this is the only true alpha in this field.

Although shitcoin trading is a popular entry choice due to its low capital threshold and high potential returns, this style is difficult to scale to higher levels. The problem lies in liquidity—newly issued coins often have poor liquidity, and attempting to trade with larger capital can lead to increased slippage. In fact, buying too many coins can even cause the price to crash because you have to bear greater distribution pressure. Shitcoin trading cannot be horizontally scaled by increasing trading volume or frequency because the failure rate is simply too high.

Those who successfully stand out from the shitcoin market advise not to look back easily unless in special circumstances or if you have a real advantage in it.

Hunters of Quality New Things

The strategy of "hunting for quality new things" focuses on finding a new token with strong fundamental logic, entering early, and enjoying the subsequent appreciation process. Unlike trench warriors, who hold positions for days or even hours, this strategy is based on fundamental logic and usually takes weeks to months to see results. Ideally, the market will quickly recognize this logic. This is also my personal favorite style because it does not rely on "luck" and is more repeatable. The ideal operating range is to buy when the token's market cap is between $50 million and $100 million and exit when the market cap is around $1 billion. This strategy can easily scale to higher investment sizes.

Why Choose New Things?

The core logic here is "the market has not yet correctly priced this thing; it should be worth more." New things are more likely to achieve this compared to old things for two main reasons:

Time factor: The market's pricing time for new things is shorter, so it has not fully reflected their value.

Capital flow: There are fewer existing holders of new things, while there are more potential buyers, creating more room for capital inflow.

Of course, this does not mean it must be a brand new token. Some old tokens may also become opportunities if they have a clear transformation direction, but they may struggle to develop due to existing supply resistance.

How to find quality new things? The answer is "you'll know when you see it." But if you don't know where to start, you can refer to the following points:

Is it novel enough?

This is the most important criterion. First movers often gain momentum beyond expectations, and their risk/reward ratio is very high. A completely new trend can spark new discussions about the industry, and all attention will ultimately return to the original thing.

Does it have a flywheel effect?

The flywheel effect refers to a self-reinforcing cycle. For example, shitcoins naturally have a flywheel effect—as prices rise, holders become wealthier and more excited, telling more friends, thus forming a positive feedback loop. Other flywheel effects may be more complex, such as bonding curves, which can effectively kickstart project activity through deterministic early participation and guaranteed yield incentives.

Is there an entry barrier?

Onboarding friction is an important link in validating investment logic. If there is no entry barrier at all, you need to ask yourself: why am I so lucky to buy in at a low price? Perhaps the current price is already reasonable. At the same time, the existence of an entry barrier also means there may be opportunities to lower the barrier in the future. For example, Rollbit migrating from Solana to Ethereum, the expansion of the ultra-liquid spot ecosystem, and even the launch of Bitcoin ETFs are typical cases of lowering entry barriers. The reduction of barriers often attracts more capital into the market, and those who invested early usually benefit from this.

Meme Priest

If the "Gem Hunter" relies on fundamentals for support, then the Meme Priest completely discards these boring things. The Meme Priest is the NFT trader in this cycle, intuitively capturing market sentiment to seek Alpha. Just like NFT investments, buying and then "lying flat" is often the best strategy—until this strategy no longer works.

However, this path requires immense faith. You must be able to withstand the pressure of market pullbacks while also accepting the negative emotions that may come with such pullbacks. The best meme priests can even change the odds of success through their actions. For example, baproll and spx6900, or dbl and fartcoin, are typical cases.

From another perspective, Bitcoin can also be seen as a huge meme on a larger scale. When I look back at my investment experiences, I find that if I had "laid flat" and done nothing every time I bought a meme, my returns would often exceed those from "active investing." I wonder if this strategy applies to you as well? Perhaps this is a question worth pondering.

Leverage Wizard

Among all trading categories, leveraged traders face the highest risk of failure. Their behavior sometimes resembles that of "problem gamblers." In my experience, most leveraged traders' issues stem from using excessive leverage, holding losing positions for too long, and trading too frequently. I often joke, "There are no successful leveraged traders in this world, only those who haven't been liquidated yet."

Leveraged trading seems simple, and there are a few opportunities each year that make you feel it's "easy." For example, the approval of a Bitcoin ETF or certain major events. However, at other times, leveraged trading resembles a brutal PvP battlefield. Even when profitable, the returns from leveraged trading often pale in comparison to straightforward asymmetric spot investment opportunities.

If you are considering choosing this category, I strongly advise you to abandon it.

Farmers - Tanky Shields

Tank-type players are nearly indestructible (unless faced with smart contract risks). Their losses are minimal, but their upside is also relatively fixed. Tank-type gameplay is particularly suitable for those who are very patient, risk-averse, or have limited time for investing.

Stablecoin Staking Players

By providing liquidity for users or projects, they can earn stable returns. Currently, there are several main sources of income:

Funding Rate Trading

When market demand is high (such as Bitcoin reaching an all-time high), the demand for margin trading surges, pushing up the funding rate (the annualized interest rate paid by longs to shorts). For major cryptocurrencies (like Bitcoin and Ethereum), this rate can sometimes exceed 20% and permeate the on-chain stablecoin market.

RWA Returns

Government bonds are currently the most common and liquid RWAs successfully introduced into the crypto space. In contrast, returns from real estate and other forms of real-world assets are not recommended due to poor liquidity and high risks.

Token Incentive Returns

Issuing token rewards to users providing liquidity is a significant innovation in the DeFi space. Although incentive mechanisms have become more complex today, there are still opportunities for unexpected surprises. This is a true "Player versus Environment" (PvE) model, as project teams are eager to exchange their printed tokens for liquidity.

Additionally, "market-making liquidity providers" are an emerging role in this cycle, offering high and stable returns. For example, GMX liquidity pools, as well as projects like Jupiter and Hyperliquid, are good choices.

Sybil/Wash Strategies

For those deeply involved in crypto projects, this strategy currently offers the best risk/reward ratio, as it typically requires minimal capital investment. The core idea is to participate in a new protocol (either as a user or by contributing trading volume) as long as the expected rewards exceed the costs incurred. However, this approach is gradually losing effectiveness as more projects have become aware of these "farmers" and have begun adopting linear reward mechanisms to curb such behavior.

The essence of this approach lies in an implicit consensus—projects need certain key metrics (such as user count, total locked value TVL, and trading volume) to enhance their valuation and attract new users. Unlike users who provide actual liquidity support, Sybil/Wash (i.e., users who fake identities or engage in false trading) only create a false sense of prosperity. Even so, many projects are still willing to pay with their issued tokens just to showcase a beautiful data dashboard on Dune Analytics.

I've heard that the most aggressive operations are often automated and constantly engage in a cat-and-mouse game with detection mechanisms. For instance, once I heard about an automated operating system consisting of 12,000 bots in a certain project, I decided never to touch zkSync again.

If you want to try this method practically, a feasible approach is to interact with a promising new project using a few accounts you normally use.

Support Players - Other Categories

These styles are neither trading nor staking mining, but they are unique enough to be classified as a separate category.

Insiders

There are many types of insiders; some are helpful for project development, while others may have malicious intent. Regardless, being an insider is a privilege, and their risks are much lower compared to ordinary investors.

So, what is the difference between investing in insiders and seed round insiders? Typically, it is the difference in project quality—previously, venture capital could serve as a signal for project quality, but this standard is changing.

In reality, most project founders are more willing to accept direct messages (DMs) than you might think, especially in the early stages of a project. For example, NBS's presale strategy: participating just before the presale ends while DMing the developers is also a reflection of insider strategy.

Builders

If you are a builder, my only advice is: stop reading this article and go back to building! Perhaps this article can help you better understand user personas, but nothing is more important than continuously iterating and seeking product-market fit (PMF). Think about the best builders you know—would they be reading this content?

Onchain Rogues

There are many untapped opportunities in the blockchain space, and those with technical skills, curiosity, and energy can explore deeply and profit from it. For example, sniping, sandwiching, randomness exploits, and other edge cases are waiting for those with insight to discover and utilize.

Leveling Guide

In the process of trying to level up, you need to clarify whether you are in "speed run mode" or "hardcore mode."

Speed Run Mode: This mode allows for restarts after failures. It is similar to "hypergambling" and is suitable for those with other sources of income or students with high future income potential. Because there is less fear of failure, speed run mode can take on more risks.

Hardcore Run Mode: This mode has a low tolerance for failure. For example, if your funds are life savings, or if you live in an economically disadvantaged area and even need to support dependents, then you cannot afford the risk of losing all your funds, which falls under hardcore mode.

Four-Digit and Below Asset Stage

If you already have a job or are in school, you can skip to the next section.

At this stage, your time should be spent earning fiat currency—a minimum wage job equates to a 150% annualized return (APR). And I believe you, dear reader, can do more.

In fact, for an investment portfolio of this scale, you cannot achieve sufficient returns to justify spending a lot of time. The only exception is Sybil farming for airdrops, but this does not require full-time commitment. Opportunities for 10x returns are rare and should be pursued at higher asset stages.

If you live in an area with scarce job opportunities, consider joining a protocol as a community manager or another role they need. The simplest way is to become part of the community as the protocol develops, so when they need to hire, you are already a core member of the community.

Five-Digit Hell - Focus on Increasing Fiat Income

Welcome to the trench stage. At this stage, every dollar is as precious as ammunition on the battlefield—they are prepared to help you find that 10x return opportunity.

Many people try to become "trench warriors" without truly mastering the necessary skills or daring to attempt becoming "leverage guides." These individuals often find themselves trapped in five-digit hell until a bull market pulls them out—but they quickly fall back in.

However, I find that those who hold MemeCoins for the long term or are adept at discovering "good new things" often succeed in breaking through. Their strategy is simple: buy and hold spot assets firmly.

Whether you choose hardcore mode or not, Sybil farming for airdrops is a low-cost way to participate. Just one significant, non-linear airdrop opportunity is enough to graduate you from this stage.

Six-Digit Hell - Seeking 10x Returns

Seize the best opportunities. When your capital reaches a certain scale, you can easily capture a 10x return opportunity without worrying too much about the size of your capital or slippage issues. As mentioned in the "New Opportunity Hunter" section, ideal investment opportunities typically grow from a market cap of $50 million or $100 million to $1 billion.

I have personally escaped from six-digit hell four times and have been fortunate never to fall back. Each time, the strategy was the same:

• Closely monitor new opportunities: Always keep an eye on potential new projects or trends in the market.
• Test hypotheses with small investments: Start with a small amount of capital to test whether your investment hypothesis holds true.
• Go all in and hold firmly: Once the hypothesis is confirmed, invest the majority of your capital and patiently wait for the strategy to validate.
• Take profits when the market is buzzing: When you notice that everyone in the market is talking about a project, it's a good time to exit and take profits.

Looking back at each successful experience, there is a common point: I bet on exchange tokens. After all, speculation has always been the most lethal product-market fit in the cryptocurrency market.

Seven-Digit Hell - Seeking a Few 2-3x Returns

When your capital reaches seven digits, seeking some 2-3x opportunities is key to breaking free from difficulties. The overall strategy is similar to the six-digit stage, but it requires more patience and repeated actions. However, as the capital scale increases, the difficulty of operations also rises, especially in maintaining flexibility during market fluctuations.

At this point, the biggest challenge is how to allocate funds. You may find that certain projects lack liquidity to support the investment scale you desire. This forces you to diversify your investments. In the six-digit stage, you could concentrate all your funds on the best ideas; but in the seven-digit stage, this approach often becomes unrealistic.

When there are not enough attractive new opportunities in the market, temporarily parking funds in stablecoin liquidity mining (Stable Farms) is a good choice. This method provides stable returns while giving you time to wait for better investment opportunities. Patience is particularly important at this stage.

Additionally, parking capital in stablecoin farming between different "good new things" becomes more appealing. Patience is especially crucial at this stage.

Eight Digits and Above

At this stage, what more is there to say? For those who reach this level, the only thing to remember is: "Don't mess it up."

Don't Stand in the Fire Pit

Avoid the following common mistakes.

Avoid trading when emotions are out of control

Learn to recognize your emotional changes. When you feel yourself starting to lose control, decisively sell your positions and temporarily leave the market. Chasing losses never leads to good outcomes; calming down is the wise choice.

Avoid making random bets after big wins

After a big win, it's easy to become overconfident and incur foolish losses. I refer to this situation as "euphoria trades." Regardless of the victories you've just experienced, always maintain rigor in the trading process and avoid being swayed by emotions.

Avoid circular cashing out

When trading, always ask yourself one question: "Who else will buy?" The essence of the market is the flow of capital, not stagnation. Sometimes, certain assets may seem safe simply because everyone is holding them, but that doesn't mean they are truly risk-free.

Forget about floating profits and historical highs

Obsessing over past mistakes will only waste your energy. Dwelling on these matters can cloud your thinking and affect your next decisions. Let go of the past and focus on future opportunities.

"Insider information often leads to the worst losses" -cl207

When you hear about so-called "insider information," carefully assess your position in the information chain. The further you are from the source of the information, the more likely you are to become the liquidity "bag holder" for those needing to exit.

Don't add to losing positions

"Losers only add to failing investments" is a common mistake in the market. If the market has clearly told you that your judgment is wrong, do not continue to add to your position without sufficient reason.

Old coins are not good, new coins are more appealing

New projects often have greater growth potential, while old projects may have lost their allure. You can refer to my previous detailed analysis on capital flow regarding this point.

Traits of the Best Players in the Game - David Sirlin

David Sirlin is a champion of competitive fighting games who wrote a book called "Playing to Win," sharing his strategies and insights. For anyone who has participated in high-level competitions, this content may not be unfamiliar. However, the traits he summarizes that successful players need are equally applicable to investors in the crypto space. These traits include:

• Deep understanding of the market: Understanding historical trends and precedents helps you predict future market changes.
• Love for the market: You must love this "game" to be willing to invest enough time and energy to achieve victory.
• Psychological resilience: This market will put you through countless breakdowns, but you need to persevere.
• Correct mindset: When facing losses or misfortunes, do you choose to face them calmly or complain in anger?
• Technical skills: Do you possess unique skills or advantages?
• Adaptability: Can you flexibly apply your strengths to new environments or rules?
• Yomi (predictive ability): Can you accurately predict the actions of other market participants?
• Evaluation ability: Can you relatively judge the value and potential of things?

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