All the people playing with Memes are mainly driven by speculation.

Host: Alex, Research Partner at Mint Ventures

Guest: Dayu, Well-known Chinese Crypto KOL

Hello everyone, welcome to WEB3 Mint To Be initiated by Mint Ventures. Here, we clarify facts, explore realities, and seek consensus in the WEB3 world through continuous questioning and deep thinking. We aim to elucidate the logic behind hot topics, provide insights that penetrate the events themselves, and introduce diverse perspectives.

Alex: Today, we have invited an old friend who has participated in our program before, Teacher Dayu. Please introduce yourself, Teacher Dayu.

Dayu: I mainly do some research in the crypto space, trade coins, and also pay attention to stocks. I've known Alex for several years and have always admired his investment style and character. So when Alex invited me to discuss Memes, although I can't claim to have much experience, I'm happy to come and exchange ideas and learn from each other.

The Timing and Specific Targets for Meme Investment

Alex: Thank you, Dayu. Dayu is very humble; he is a top-tier KOL in the Chinese crypto community. I have been following Dayu's investment philosophy, including his insights on Meme trading, and I think there is a lot to learn from him. Given the current market situation, from a business perspective, the entire Web3 industry doesn't have many hardcore commercial trends, but there are quite a few trading opportunities in Memes. So today, we chose this topic and invited Dayu to share with us.

Now, let's officially enter today's podcast content. Could you please start by telling us when you began trading Memes? Do you remember the reasons at that time and which project you participated in?

Dayu: The first Meme I officially participated in was called People. The reason I got involved was probably because I was moved by the uniqueness of People; it resonated with me as someone with a liberal arts background, and I brainwashed myself into it. However, I haven't mentioned the People project much in the following years. At that time, I didn't understand Memes and had no investment experience in them; I just genuinely liked it and thought it had great viral potential. I was promoting it every day in Telegram groups, which led me into a big pit. Looking back, Memes rise during FOMO and will definitely fall when FOMO ends. At that time, I was somewhat of a star in the community; everyone who played People knew that Dayu was always shouting, building, and optimistic about it. I was genuinely optimistic, but my holdings were actually very small because my initial capital was limited; I remember my holdings were around several hundred thousand RMB. Looking back now, that was actually a ridiculous position. But on the other hand, it shows that I am quite honest and passionate; I say what I think. Later, I discovered some things that made me uncomfortable. For example, when it was listed on Binance, I always hoped everyone would join me in building it. I said it was going to Binance, and everyone got very FOMO, and the price went up. I posted to remind everyone to build more and like various posts, but I found that no one was interested at all. That voice was drowned out; everyone only cared about the price. At that time, I felt something was off, wondering why everyone thought differently from me. I was full of passion, thinking this Meme was fun and had great potential, but I realized others did not feel the same. I grew from this experience and realized that the crypto space is really a speculative arena, and many people are very bad, evil, and dark. They play with you, buy, and are part of the market. But some people, when faced with builders like me, would say after the price dropped, "Why haven't you posted? Why aren't you building? Are you selling? Are you cutting the leeks?" At that time, I was too naive and felt very indignant, thinking I would never engage in such things again. The experience and lesson I learned was that after People, I no longer participated in any Meme projects. For example, if a project team approached me, gave me tokens, or friends asked me to buy, I would not say yes. I only look and decide for myself. Everything I share with everyone is something I believe in and have invested my own money in before I share it. I just want to make money while standing, because the previous shadows were too great. But from the perspective of Memes, People brought me significant gains. For instance, after People, I started to think that all these Meme communities are actually a false proposition; they are just a group of fervent speculators, even gamblers playing. Everyone is extremely enthusiastic; this is not a community; it’s a toxic atmosphere.

Later, because of this, when NFTs just started to rise, I thought this seemed like a community, so I invested in Jaylen Bear, buying it for 0.25 ETH, which later peaked at 8 ETH, but then I found out that the project team was also there to cut leeks. I thought everyone was good people; you might be the same. People like us tend to think positively about things, believing they also want to grow and empower, and we imagine a lot for them. In the end, of course, it fell hard, and I didn’t sell much. Later, projects like BAYC and Goblin NFTs were actually very similar to today’s Meme play. For example, Goblin is a very unique original thing, ugly to the extreme. The Goblin project also gave me my first bucket of gold. I bought it for 0.25 ETH, and when I sold it, the average price was about 5 ETH, peaking at 8 ETH. At that time, ETH was several thousand dollars each, and I gained thousands of ETH, which can be considered my first bucket of gold. However, looking back from my current understanding, from the perspective of Memes, I feel I could not miss BAYC. At that time, I indeed missed BAYC for objective reasons, such as the group of people playing BAYC had their own circle in North America, playing offline very enthusiastically. People like me, who are more introverted and do not mix in circles, find it very difficult to understand and integrate into that.

This is roughly the process. Later, my level improved. The so-called higher level actually has a bottom line, a hidden rule. I began to realize that all Memes are products of emotion, consensus, and narrative, and all the people playing Memes are mainly driven by speculation. In these processes, my level of playing Memes began to grow. The specific parts will be discussed later.

Changes in Views on Memes and the Reasons Behind Them

Alex: Just now, Dayu mentioned that when you first got involved, it wasn't just about buying and selling; you were also helping to build the first Meme community you encountered, which was People, hoping to expand its influence and get more people involved, which is what we call Build. It has been about four or five years since you first encountered this project, as People was a representative Meme of the last cycle. Later, you also mentioned participating in NFTs, many of which are similar to Meme assets. So from the beginning until now, how have your views and investment methods regarding Memes changed? What key events or underlying reasons contributed to this change? Could you help us summarize?

Dayu: Okay. I think the perspective on the changes in Memes is very well thought out. Because the Memes in the crypto space have gone through several distinct stages of change. The first is the wilderness period, when no one knew about it. At that time, Doge was called out by Musk; I think he was the first big figure to understand this kind of thing, and he personally facilitated it all. Musk once said, "Whoever masters the Meme, masters the world." At that time, Doge went from a tipping payment coin to a bull market, and I heard that a big shot bought Doge at a high price with 100 Bitcoins, then it rose tenfold, and he sold it for 800 Bitcoins. I was shocked at that time, not understanding how they knew these things. Looking back now, it’s actually easy to interpret. People like Musk know that narrative and consensus can be combined with tokens to become an economy. This is something new that Buffett and traditional investment logic have not touched upon. But just because it hasn't been touched doesn't mean it doesn't exist. It indeed exists, and you can feel it with a little reasoning. This was the wilderness period; those who understood it back then were already financially free. From Doge to Shib, these are all like this, with strong participation and dissemination from celebrities, such as Shib also had Musk involved, and all the crypto traders around the world saw him. When the attention of all crypto traders worldwide is focused here, and it has no burdens, no delivery pressure, unlike projects that need to prove user numbers and income, Memes have no such burdens; it’s just gambling. And gambling, drugs, and vice are the three eternal demands of humanity. The demand for gambling is enormous; as long as the demand for gambling is combined with dissemination and tokens, it becomes a simple and easy-to-use casino. People like Alex and I are not the type to go to Macau and gamble everything away, but we have to admit that there are many people in the world who once they start gambling cannot get away, they will FOMO and go crazy. There is also a large portion of people in a middle state, enjoying and being obsessed with gambling. So, Dogecoin and Shib are understandable in this context.

The second stage is the growth period. Musk cannot shout every day, so what to do? The crypto space has its own market makers and KOLs. Thus, a bunch of coins emerged, such as People, Bonk, Pepe, WIF, Bome, etc. At that time, I had just left my previous job and entered the crypto space full-time. Bonk rose fivefold, which was quite satisfying for me. A lot of my current wealth started from Bonk. I remember most of the money was offline, like houses and cash, while the money in the market was only 100,000 USDT. I used this 100,000 USDT to buy Bonk, which turned into several hundred thousand USDT. Later, I thought it would drop to zero, but the market maker was very aggressive and pulled it up 100 times, which was incredible after the bear market. Then there was Pepe; when its market cap was 20 million USD, I posted about it on Twitter, but at that time my understanding was limited, and I didn’t grasp narrative, value, and long-term aspects, so I missed a lot. I bought Pepe when its market cap was 20 million USD, but I probably sold it when it reached around 100 million USD, and later it rose to several billion. I also missed WIF because there was little discussion in the Chinese community. Bome was a rare large pool coin at that time, with a big pattern, and the money directly added to the pool, making everyone very FOMO. That was the growth period; everyone was looking for targets that could form market synergy. This market synergy means that everyone notices it, has a good narrative, and can tell a story. Ordi is actually also a type of Meme in the growth period. From the perspective of traditional value investing, its intrinsic value is zero, but its price can become very high because of those attributes.

Then later came the final period, which is the current destruction phase. After the pump, creating Memes became very easy. In the past, creating a Meme required finding a few people, with technical developers, web designers, and Twitter managers involved, like professional projects such as Pepe that had market makers and manipulators, which was quite complex. So, at that time, there weren't many people playing with Memes. But after the pump, anyone could create a coin. Even a dead squirrel could spawn multiple coins. When an influencer says something or Musk posts a picture, it can immediately turn into a coin. Everything has been tokenized. For example, NEIRO little dog, big dog, small lowercase dog, big uppercase dog, capitalized dog, etc. At this point, Memes have a characteristic of becoming rampant. In the wilderness period, there were probably only two: Dogecoin and Shib, both pushing to market caps of hundreds of billions and tens of billions of dollars. During the growth period, there were also coins with market caps in the tens of billions, like Pepe and other Memes combined, which had hundreds of billions in funding. Assuming the total funding in the crypto space is hundreds of billions, that makes sense. Then the destruction phase came, with so many Memes emerging, hundreds or thousands every day. Today, a good consensus, a good narrative, or a good angle can be traded, and tomorrow there will be something even better. What to do? It’s gone. The lifespan of Memes has become very short; they die quickly. Like Bonk, it didn’t matter if you didn’t sell at the first peak; later, it could still rise 100 times, lasting a year, two years, or three years. Hats Dog also followed this pattern, ultimately going to zero. But in the destruction phase, it’s different. Of course, there are exceptions in the destruction phase, like the Trump coin, which has enough influence. Once it was launched, the whole world saw it, and the coin price shot up to a 70 billion FDV. That’s the end, similar to the hundreds of billions of Doge and Shib. Although the funding in the crypto space is more than before, the overall valuation range is about the same because this is a game of passing the buck.

The value of a Meme is zero; its price is driven by short-term emotions, narratives, and gambling demand. However, once the funding reaches a certain point, there’s no more space. So I think these stages are very clear. In these changes, those who do not keep up with the changes are likely to suffer losses. In fact, many people cannot keep up. I see some rather foolish comments on Twitter saying, "The Pandora you mentioned has dropped to zero." But actually, when I mentioned it, it had already risen tenfold. They say, "It’s gone to zero; you’re cutting leeks, what you said is useless," but these people are stuck in the old era; they cannot make money in investments. Because the value of altcoins is zero, this was said by a customer service representative at Binance, and I think it’s particularly classic, becoming a hot meme. The intrinsic value of altcoins is zero; how can you expect their prices to keep rising? It’s impossible; they will all eventually go to zero. Previously, a good friend asked me, "Can this Meme still bottom out? Can I still buy it?" I said, when in doubt, think of the Trump coin. The Trump coin is the best Meme, the most powerful Meme; just look at what its K-line looks like. If you want to bottom out or find value, think more about the Trump coin. This trick is particularly useful. Including myself, when I am filled with beautiful fantasies about a Meme, I think of the Trump coin.

The Position and Role of Memes in the Investment System

Alex: OK, just now Dayu shared his understanding of Memes, including the evolution of the entire category. He mentioned a key point: from the initial wilderness period to the growth period, and now to the destruction phase, the total market value of Memes in the crypto space is probably only in the hundreds of billions to a trillion range. However, now in the destruction phase, the number of Memes is too large, so the amount of funding and attention each Meme receives has become very small, and their lifespans and market cap ceilings have also become very low.

Now, Dayu mentioned that your current understanding of Memes has a basic principle, which is the saying from Binance's customer service that "the value of altcoins is zero." But I see that you are still practicing some investment operations with Memes. So, in your current investment system, what position do Meme assets hold? What role do they play?

Dayu: Yes, the value of Memes is zero, but the price can be infinite, which is where the opportunity lies. So I treat Memes as a high-risk, high-reward side. Many people who look down on Memes or don’t understand the crypto space are old-school investors. On one hand, I am very humble, but on the other hand, I believe that anyone who does not keep up with the times will definitely be eliminated by those who continuously iterate themselves. In this high-risk strategy, I think the most important thing is the odds. For example, when I buy a Meme, if I make a comprehensive judgment—regardless of whether that judgment is narrative economics or "foolish investment theory," I don’t care—as long as you find your logic, it can be repeatedly applied. In this process, if I make a total of 10 moves, and three or half of them lose money, but you might lose 30% or 40%. Why? Because when I buy Memes, I basically buy those with good liquidity; I won’t bet on those that are going to zero, and I buy very little. In that case, if I lose 50% each time, I lose 50% * 10 of the 10 moves. But for the other 5, because they are high-risk, high-reward, they might reach 5 times, 10 times, or even 100 times, then the returns can be quite considerable. For example, with the Trump coin, my cost was around 1.2, and I held a lot of chips. Also, with Bome, those were several times in just a few days, extremely crazy. Under these odds, I think Memes are a very good thing. In fact, when talking about Memes, you can also think of the entire crypto space; the logic is the same. For example, Bitcoin, of course, has value; its value system is different from Memes, but from the perspective of emotion, consensus, and dissemination, it is the same. What I mean is, if we go back ten years, even if we don’t recognize Bitcoin’s intrinsic value and think it is zero, from the perspective of dissemination and consensus, it can still be part of a traditional investment allocation. So I think if I went back ten years with my current understanding, I would definitely buy Bitcoin. Because my current investment system recognizes this barbell strategy of high risk and high reward. In the crypto space, I previously mentioned a widely circulated saying: "Technology is insignificant; consensus is worth a fortune." Because in the crypto space, you can randomly pull a development team to create some technology and do something, but the actual returns are very little, meaning few users and little income, so that technology itself is not worth mentioning. This is not to deny all technology, but most technology in the crypto space is like this. "Consensus is worth a fortune" means that in places where the technology is poor and PMF is poor, its consensus narrative will have very high value. And this has already been validated. For example, PEPE, those who look down on PEPE, if they bought it at a 20 million market cap, it eventually rose to tens of billions; the Trump coin also went from 1U or a few cents to tens of billions or hundreds of billions. At this point, to theorize right or wrong, insisting that not playing Memes is correct is very pale; it’s just the self-paralysis of the human brain. Sometimes the human brain disguises many biases as "I am smarter than others," which is actually very dangerous.

In the narrative, consensus, and emotions of Memes, I think they are constantly playing a role in life. For example, people used to get news from NetEase News, Tencent News, and Xinhua News, but then Toutiao came out, which believed that the key was not to get the correct news but to make you feel good while reading it. So Toutiao is called "recommendation," and what it recommends is what you enjoy reading more and more. When my dad used Toutiao, I looked down on him, saying, "Why do you keep forwarding some incorrect, foolish, outdated information?" Then one day I suddenly realized that it wasn’t Toutiao that was foolish, nor was it my dad’s problem; it was actually my problem. Why? Because I needed to understand what Toutiao was doing, including later switching to Douyin, now everyone can’t live without Douyin, with kids and elderly people scrolling their phones every day. Of course, many wise people don’t scroll to avoid falling into this emotional and consensus trap. Now the crypto space has actually tokenized these aspects of human nature. From Doge to today’s Memes, I think if we think systematically, it’s that after the crypto space got coins, everything has been tokenized. Whoever can capture this tokenization trajectory can make money. Moreover, for me personally, Memes have helped me achieve many life goals, so I will continue to pay attention to this.

Let me expand on an example, which is Pop Mart. I paid attention too late; I only learned about this company when it rose to around 150 or 160. At that time, I was amazed, saying, "Oh my god, if I had known earlier." Of course, there are still opportunities now because it has also dropped quite a bit. I think Pop Mart is my favorite company because it fits the logic I just mentioned. It sells emotions and consensus. The so-called IP means you don’t want to buy fake Pop Mart; you have to buy the genuine, good ones. In fact, the original luxury brands like LV were things used by royal nobles before the French Revolution. When the king was beheaded, the queen was deposed, and the aristocracy disappeared, what would the tailor shop do? It had to make a living by creating limited editions. As a result, once it was limited, everyone liked it even more. So I think Pop Mart is a company I really like. Such companies have a characteristic: their brand value will continue to grow. If it strengthens the Pop Mart IP and gains recognition, it will become increasingly valuable. Also, Old Shop Gold is a stock that has become a phenomenon. I found that some female friends, when gold prices were high, were still willing to buy at a premium; they just liked it. I was shocked to hear that a company could make people pay a premium is a great company. Pop Mart is also like this; through the blind box mechanism and continuous evolution of its IP, I super like such companies. So, as Musk said, "Whoever masters the Meme, masters the world."

Standards and References for Meme Selection

Alex: Understood. The issue we just discussed is the position of Meme assets in Dayu's investment system. Dayu mentioned the barbell strategy, with one side being relatively blue-chip assets that can be held long-term, while Memes are on the other side, high risk but also high potential returns. Of course, this also requires a lot of speculative skills and an understanding of market emotions. So, in your selection of these high-risk but high-reward Meme assets on the right side of your barbell, based on your years of experience and practice, what hard standards do you have when screening a Meme? Or what are your general reference criteria for selecting a Meme?

Dayu: I have summarized a few angles, some of which may not necessarily apply now.

First is naturalness. Previously, when I talked about Ordi, I said that natural diamonds are always better than synthetic diamonds. Naturalness means it is a serendipitous discovery. This Meme is not something anyone can just pull a few developers together and create a story. If you can create it, so can they; if you can pull developers, so can they. Such things will quickly become commonplace and cannot be speculated on. For example, Ordi started as an inscription; it was just a technical idea, not meant to create a Meme. Ordi is the first half of the word for this inscription, and a Meme coin came out just like that. It is about inscribing something on the blockchain, and this technology has a token that can be speculated on. It is the first token; that’s naturalness. The second is not called natural anymore; it’s following the trend. Bitcoin is natural, a peer-to-peer system on the blockchain; the second is Litecoin, which is far behind. Now anyone can copy a set of code to create a "Chinese coin," which is useless. Naturalness means it cannot be developed just because someone wants to.

The second is originality; it’s best if it has a unique innovation. For example, Bome, which involved a lot of money being pumped in. The act of pumping money itself isn’t new, but the fact that he pumped in a lot of money made it interesting. It’s hard to replicate, with a scale of tens of millions of dollars and a significant structure, which is impressive. Of course, many money-pumping schemes came out later, turning into what people call "beast schemes," where they pump in money and then run away. For instance, there was a guy named Ma Ji who pumped in money, added a little liquidity, and then directly took away tens of millions of dollars and fled.

The third is communicability. Whether a Meme can spread depends on how grand its narrative is. For example, if Musk posts a picture, that’s just one tweet among countless others, so the spread is average; but if he says he changed his signature and it pumps to 100 million, then changes his avatar and name again, and it pumps again, that’s communicability. When Trump personally launches a coin and builds a website, the communicability is even greater. So, I generally judge from these angles. Of course, every Meme is different; it’s really hard to replicate. For example, Bome is about pumping money, Pandora solved the NFT problem, the Trump coin is a coin launched by a president, and Ordi is an inscription on the Bitcoin chain; each one is different.

Another basis for my participation is the entry point; it can’t be too high. If it’s too high, the margin of safety is poor. For example, the most powerful Meme in the crypto space has a total market cap of only a few hundred billion. Now, creating a Meme has already reached 20 billion; for instance, with PEPE, I’m not very interested. Can Pepe, with a market cap of 7 billion, theoretically surpass the Trump coin? I think it’s very difficult; from the perspective of narrative and communicability, it’s unlikely to beat it. Currently, the Trump coin is worth tens of billions; even if Pepe rises several times, it may not reach that level. Moreover, the value of a Meme is zero, and if it enters a bear market, its attractiveness diminishes significantly.

So, I take a "dare to be the last" approach with Memes. I generally don’t enter the market first because being the first to enter tests diligence, and the frequency of trades may be very high. I can’t spend that much time. I let the funds filter, for example, if several Memes revolve around the same narrative, you can’t say which one is orthodox, so let the market funds run; this is the game of capital, real money is the most authentic. Additionally, entering a bit later has its advantages. For instance, I usually consider entering only when the market cap is over 10 million dollars, which greatly reduces the probability of it going to zero. If I want to buy 1% of the chips, entering at a 10 million market cap means I’m putting in 100,000 dollars. Given my capital size, making 10 trades a year is acceptable. Moreover, holding 1% of a Meme is about right. Some people hold 10%, so entering early and holding too much may lead to the operator running away, and others may not dare to enter, making it hard to hold.

Therefore, in terms of participation criteria, I mainly look at the price, combined with the several points mentioned earlier: naturalness, originality, and communicability, to make decisions.

Positive and Negative Cases of Meme Investment

Alex: Alright, Dayu just clearly explained some of his standards for screening Memes, including investment methods and thoughts. Can you share some practical cases from your past Meme investment experiences? Choose two: the first being the most successful case in your memory, and the second being a relatively poor case, and then discuss what you learned and reviewed from these two cases.

Dayu: Actually, I have four cases that I’m quite satisfied with. The first is Bome, which I mentioned earlier; it involved a lot of money, had a significant structure, and was very timely, with active on-chain funds. I entered when its market cap was about 30 million dollars, which was already quite high at that time. Many people claimed to have made thousands of times their investment, like those who pumped money and made a lot. I entered at that time and held a relatively large proportion of chips. It was crazy; within three days, it was listed on Binance, and the funds in my account skyrocketed. When the news of Bome being listed on Binance came out, there was a surge, and I was quite optimistic, so I held for several days. I thought it was possible for it to surpass Pepe. At that time, Pepe was at 7 billion, and Bome was only at 1 billion; if it rose 7 times, it would be great. But after being listed on Binance, I reminded myself that it was time to sell. As I sold, it started to drop, but I had no psychological burden, thinking it was better to turn it into cash. Later, it continued to drop; I don’t remember the exact numbers, but it fell from about 0.2 to around 0.15. After I sold, it rose back to over 0.2, and I felt a bit regretful, thinking how much money I could have made if I hadn’t sold. In the end, I kept a small position, and as it kept dropping, I sold gradually.

The second case is the Trump coin. When I saw it, it already had a market cap of 1 billion, but it was still early, about ten minutes after it launched. I also shared it in my group, and many group members made huge profits from this wave. Among Bome, the Trump coin, Ordi, and Pandora, some group members made over 100 million dollars. After Bome, some group members sent me red envelopes, with amounts in the tens of thousands of dollars. Four or five people achieved a class leap. This time with the Trump coin, because everyone had money, they were more aggressive. I also held a lot of chips in the Trump coin and was very aggressive with my position, and it rose quickly. But around the time it reached 10 times profit, I started to sell because the volatility was too extreme, and I was a bit scared. In just two or three hours, a large position had a 10 times return, which really tests one’s mindset. At that time, I was talking with group members and communicating with friends, and my mind was particularly chaotic, leading to reflexive actions. I noticed that 0Xsun’s actions were exactly the same as mine; the timing and proportions of buying and selling were similar. I sold 90%, and he sold 80%. Looking back, these were all wrong decisions. Mainly, it was too chaotic at that time; every fluctuation on the account was several million dollars, and there was too much information to judge, which was mentally exhausting. At that time, I felt that a 10 billion market cap was a significant threshold for many Memes. The reason I say it was a mistake is that in a lifetime, opportunities like a president launching a coin are rare; I didn’t think outside the box and instead got caught up in too much information. So, as I talk to you today, I suddenly feel that sometimes when making significant decisions, it might be good to calm down alone, like going for a walk in a nice environment to think, almost like meditating. During the Bome incident, I happened to be walking in a park in Hong Kong, where there was an exhibition of Bruce Lee and Jin Yong; I was thinking while looking at it, slowly realizing not to be too greedy, and I sold. That was a relatively good sell without a solid framework, while with the Trump coin, I already had a good framework. For the Trump coin, I did two things: the first was to sell because I had a good investment framework that allowed me to gain a lot from most Memes without getting stuck, and I would run quickly at the slightest movement; if the 15-minute K-line broke, I would leave. I did the same with the Trump coin, but looking back, that was a mistake because such narratives are rare.

Speaking of a failed case, it comes from this review. After the Trump coin, I thought that for the right things, I should be more aggressive and detach from everything to think. I wondered if other countries would follow suit with such a great opportunity of a president launching a coin. Which president is most likely to do so? I thought of Argentina’s president Milei, who is reforming, has a reputation internationally, and is pro-cryptocurrency. If he launched a coin, it would definitely be popular, so I thought I would wait for him to launch a coin and then make a big profit. Sure enough, he launched a coin, and I saw it early, bought within minutes, and even shouted to buy in the group. The price quickly doubled; I entered with a large position, and the trading was active, so I could buy as much as I wanted. After it doubled, everything seemed as I expected, which boosted my confidence. However, at this point, I didn’t follow my trading strategy. I just kept watching the price drop, losing my profits and starting to lose my principal. This isn’t right; how could it drop so much? At first, the drop was fine, but when it hit my cost line, I kept remembering Buffett’s saying, "Don’t lose your principal," and I thought I should be even more cautious in speculation. At this moment, I couldn’t figure it out; I didn’t know why, but I still cut my losses, losing about 20%. Although it wasn’t a huge loss, it hurt my feelings. Later, the Argentine president came out to deny it, turning it into a melodramatic farce. Looking back, it’s clear that while big opportunities should be seized, the basic iron rules must still be observed: you can’t lose your principal or only lose a little; you can’t have a gambler’s mentality. For the Trump coin, if I reflect on this, selling at 10 times back then was already very good. I think the most important thing in the crypto space is to survive for a long time; as long as you survive long enough, there will always be opportunities to make big money, and you will eventually get rich.

Qualities Essential for Excellent Meme Investors

Alex: Alright, Dayu just shared three cases in great detail. In the market or among investor communities, there’s a sentiment that whether one can invest in Memes or achieve good results in Meme investments is very much a test of talent. In your view, including both innate talent and skills developed over time, what qualities must an excellent Meme investor possess?

Dayu: I’m not very sure if talent is necessary because that definition is quite complex. But I believe that whether investing in Memes or anything else, even considering whether to invest at all, should be viewed in conjunction with personality. Everyone has a different personality, and personality is actually part of talent or ability. For example, if a person has read very little and has a low IQ, their personality might align with their internal foundation. On this foundation, there are many different types of personalities. Some people have a short attention span, have many ideas, and change quickly; others are very loyal, and if they like something or hold onto something, they will keep it for a long time. These factors can greatly influence investment outcomes. Personally, when I play with Memes, I would say you have to be a bit of a player. A player should never fall in love; you must not seek true love. When you buy a Meme, you have to know its value is zero. You are just flirting with it, enjoying the moment. But as soon as you feel something is off, you should turn around and leave without hesitation. However, if you are a sentimental person and insist on playing with Memes, I think it’s better to just try a little. Different personalities lead to different outcomes. So, when asked whether talent is needed and what qualities are required, I think the main point is to look at personality; there’s nothing else.

On the basis of having a suitable personality, some people just want to make money, thinking that Memes can be high risk and high reward, and they might do well. If, for example, this person has a neutral personality, then in this case, I’ve summarized a few advantages that need to be possessed: First, some people have small funds but are very diligent. There are two outstanding representatives here: 0Xsun and Laser Cat. They both have their own communities, which are very active, and they pay attention to various Memes every day. There’s also a player from Taiwan called Da D. They notice almost every contract and every Meme. When something comes out, it might only have a market cap of 10,000 dollars, and they might even participate while it’s still in the internal trading phase. Their frequency of trades is definitely very high. For example, when I spend 100,000 dollars on a coin with a market cap of 10 million dollars, they might only spend 100 dollars, and it has already risen 10,000 times. That’s diligence; of course, other qualities are also essential because 99% of early-stage coins go to zero, and the more diligent you are, the more you might lose. But my approach of daring to be the last also requires diligence. For instance, when the Trump coin came out, I happened to be at my computer, which is a necessary factor. Because I’m at my computer every day, reading and learning, maintaining a routine. If I hadn’t seen it, I would have missed the opportunity. If I miss it, in ten minutes, the market cap is 1 billion; after thirty minutes, it’s 3 billion. If I’m late by two hours, maybe I’m out eating and don’t check my phone, it could be 10 billion. By the time it hits 10 billion, I’ve already sold some for the first time; if I want to gamble again, I need good luck. If I increase my position, a 50% drop is common.

The second is vision. I can't elaborate too much on vision. A few years ago, I didn't have much vision and my level was quite low. This requires a lot of training. You need to have an active, speculative personality, and be a bit of a player, along with real training with actual money, experiencing both losses and gains, and then your vision will naturally improve. It’s not about playing blindly; rather, you should play with judgment each time, and after playing, you need to review, think, summarize, and improve.

The third is luck. It sounds a bit mystical, but I believe that people do need a bit of luck. Without luck, it’s actually very hard to succeed in trading Memes. The value of a Meme itself is zero; no matter how accurate your judgment is, it’s still like playing Texas Hold'em, where there are many calculations, but you also need a bit of luck. How to make luck work for you? From a mystical perspective, it’s about doing good deeds and being a good person. I have a feeling that the wealth a person acquires is actually something that fate temporarily entrusts to us. To handle wealth well, it’s best to be a good person, ideally with ideals, so that after making a lot of money, you can give back to society and help those in need. I believe this will enhance your luck.

Another quality is courage. Generally speaking, good investments, like value investing, do not require courage. If you understand it, you will naturally want to invest, and you won’t be afraid if it drops because you know where its value lies. However, playing with Memes requires courage because it really has a gambling element; it requires luck and boldness. Being bold also requires distinguishing between true boldness and false boldness. Some people are very bold before buying, but become timid after they buy; that’s not true boldness. True boldness, like that of Liangxi, is real courage. He can make 200 million in one night and lose 200 million in three days, but he dares to come back for another round; that’s what true boldness is. If ordinary people did this a few times, their mindset would have collapsed long ago. It’s not that a person becomes bold after having a lot of money; it’s still related to personality. For example, if someone makes 200 million but is inherently cautious and thoughtful, they wouldn’t say, "Now that I have money, I’ll gamble 100 million." On the other hand, someone with only 10 million might say, "Let’s go all in! If I lose, I’ll just go back to delivering takeout." This illustrates the difference in personality.

The last point is that an excellent Meme investor must know how to cut losses. Memes are essentially about small bets with high risk and high reward. But if you can control the risk better, your returns will definitely increase significantly. Risk control means trying to buy at a lower price and running away quickly when danger arises. If there’s really no opportunity to run, you must strictly cut losses. For example, when I bought the Argentine coin, I was optimistic about it and didn’t see much risk, but it kept dropping. I knew that someone must be dumping a lot, possibly a market maker harvesting retail investors, or the project team selling; otherwise, it wouldn’t make sense. So I decisively cut my losses. Cutting losses must be ruthless and resolute. I’ve noticed that many people who get stuck in altcoins behave like this: they buy 1 million, and when it drops to 900,000, they say, "It’s okay." If I say at this point that the project is actually bad and has risks, they will come at me angrily; when it drops to 800,000 or 700,000, they say, "It’s about to rebound"; when it drops to 500,000, they stop cursing anyone and go silent; when it drops to 400,000 or 300,000, they simply stop looking and become numb, getting used to it. I think this is not the way to go. If I bought 1 million and it drops to 800,000 or 700,000, I would cut my losses, and I would still have 700,000 left. If it drops quickly, for example, if I wake up and see my 1 million has turned into 300,000, I would still cut losses. I would think differently: if I currently have 300,000, would I buy this coin now? If the answer is no, then I would sell. I wouldn’t think, "I lost from 1 million to 300,000"; I would only think, "I now have 300,000, do I still want to hold this?"

Balancing Meme Investments with Other Asset Classes

Alex: Alright, that was very specific. We know that Memes are one of the asset classes that Dayu invests in, and his investment types and targets are very diverse. In your current investment system, can you share with everyone what other asset classes you have besides Memes? How do you balance these blue-chip assets and the relationship between value investment assets and Meme investments?

Dayu: Actually, I evaluate myself as a value investor. Of course, this self-evaluation might sound a bit funny because a lot of the money I make comes from speculation. So why do I say I’m a value investor? Because I believe the value of Memes is zero, while the price can be infinite. In this process, I’ve made the logic of "the price can be infinite" very clear and explained why and how I participate. So this part is more of a tool for me to make money. I think in making money, whether through investment or speculation, it’s all about making money; there’s no distinction in superiority. The key is whether it suits you. If it suits you, then go for it. I call myself a value investor because I firmly believe in compound interest and the intrinsic value of companies; buying stocks is buying companies. For example, if a stock goes up today and down tomorrow, I don’t care. I often think, if this company now has a market cap of 10 billion dollars, and I have 10 billion dollars, would I be willing to buy it outright and then not care, enjoying the dividends of the company’s growth? Whatever it earns, I earn; that’s how it is. From a balancing perspective, I think both are harmonious for me. The intrinsic value of Memes is zero, while what I truly hold long-term are those with very high intrinsic value.

In terms of asset classes, it’s mainly stocks. For gold, I think Bitcoin is a substitute for gold. Additionally, I’ve invested in some films alongside others, and the returns will be seen after they are released because I also have a bit of a dream to direct. Furthermore, I have a company registered overseas, and I plan to invest in equity projects like SpaceX next. Equity investments are essentially early-stage projects. For instance, SpaceX currently has a market cap of 400 billion dollars, and based on PE and other indicators, it’s actually overvalued, which is why many early investors are willing to transfer their old shares. However, I am very optimistic about this type of equity investment. When humanity truly enters the interstellar era, the market cap of such companies may reach tens of trillions or even hundreds of trillions. In traditional investments, I prefer companies like Tencent and Pinduoduo. Tencent’s strength is well-known, while I really like Pinduoduo’s business model, which essentially turns capitalism "upside down." From a business model perspective, I wouldn’t compare it to Amazon; I think Pinduoduo aims to take down all global retail, including Costco, Walmart, and Sam’s Club. People might say how can that be compared when it can’t even beat JD.com. But I believe this business model ensures it will win. This judgment is actually similar to the logic when Musk was making electric cars; at that time, there were no electric cars in the world, but he said electric cars would replace gas cars because they are more efficient, and he ultimately achieved that. If there are enough capable people pushing it, it can be done, and Huang Zheng is still young, so I really like this type of company.

Advice for New Meme Investors

Alex: Now we come to the last question of today. Among our podcast listeners, there should be quite a few who haven’t officially entered Web3 or haven’t made their first Web3 investment yet. Suppose you have a friend who is a newcomer to Web3, and after listening to this episode, thinks that Memes suit his personality and wants to give it a try. If you were to give such a newcomer up to three pieces of advice for investing in Memes, what would you suggest?

Dayu: For newcomers, I think it’s best not to invest; just hold onto Bitcoin first. The risk of Bitcoin is already quite large, which is a significant challenge for many newcomers. My advice is to first understand Bitcoin. Bitcoin is a hedge against fiat currency inflation, and fiat currency will definitely inflate. For example, the U.S. generates 5 trillion dollars in revenue each year, with interest payments of 1.5 trillion; this is definitely unsustainable. If the money the U.S. makes exceeds its military spending, it has to inflate the currency. In this context, Bitcoin, like gold, will run wildly in the fight against fiat currency. If Bitcoin catches up to gold, there’s still more than ten times the space. Compared to gold, Bitcoin has a stronger consensus within ten years; but a hundred years from now, I believe Bitcoin will have 100% stronger consensus. I’ve always had a judgment related to SpaceX, which is that the amount of gold in outer space is infinite. Currently, it’s very difficult for humanity to mine it, but in the future, with the development of interstellar spacecraft, Mars colonization, and artificial intelligence, future mining ships could be unmanned, relying on robots to build mines. The rapid development of technology means that gold could become an ordinary mineral. I used to think about how Bitcoin nodes would synchronize in the interstellar era. Recently, I found that this problem doesn’t exist because quantum communication is designed for things like Bitcoin. Yang Zhenning said that various countries have been researching quantum communication as a very important direction for many years; no matter how far apart, without electromagnetic perception, signals can be exchanged directly. Bitcoin becomes an interstellar asset, belonging to the assets of interstellar citizens. If we enter the interstellar era, the concept of nation-states will also be weakened. For example, a Mars colony might not be governed by Earth and could have a new system emerge. To return to the point, if you really want to participate, use 1% of your funds. If you find yourself easily getting carried away, then revert to the first point: don’t invest. Because human nature is hard to resist, greed and fear are difficult to combat. If you only use 1% of your funds, you can maintain a good mindset regardless of whether it rises or falls.

Alex: Alright, thank you, Teacher Dayu, for sharing so much with us, from his personal practices in Meme investment to the abstract investment methodology, as well as aspects related to personality and cognition. The content is very rich and enlightening. Thanks again to Dayu for joining our program, and I hope we can discuss other topics together in the future.

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