Interview: Arain, ChainCatcher
Guest: 0xWizard
Organizer: Arain, ChainCatcher
0xWizard is a crypto KOL in the Chinese-speaking community on X with nearly 200,000 followers, known as the "Meme Wizard."
Meme can be said to be a main thread running through this bull market cycle, even though some people find it emotionally difficult to admit.
"Bravely participate in the second wave of opportunities" is 0xWizard's motto. Based on the bottom-up market recognition and reflections on the underlying reasons, he believes that although the bull market has started, on-chain Memes are just beginning.
"In the future, there could be 500 more Memes worth a billion dollars, but it may be hard to see another asset worth 50 billion dollars." In an exclusive interview with ChainCatcher, 0xWizard stated. However, the primary and secondary gameplay of Memes is completely different. For some high-valuation Meme projects that are about to enter the secondary market, he suggests observing before building a position.
In the interview, 0xWizard also shared his methodology for capturing new tracks and narrative judgments, including the "Three Laws of the Bull Market Engine" and the essence of tracks. He discussed several popular AI Memes and shared his investment experiences in Memes.
The following is the interview content:
My Product Background Makes Me Better at New Narrative Tracks and Primary-Secondary Investments
ChainCatcher: What did you do before entering the crypto space?
0xWizard: I worked as a product manager in an internet company, participating in the design of some B-end and C-end products. Later, I started my own business, creating internet-related products. In 2017, I noticed that the emerging field of cryptocurrency began to show a unique development trend, and I had friends discussing related topics. Coupled with my interest and optimism about its development potential, I officially entered the crypto space.
Due to my past work experience, I am relatively good at judging new tracks and narratives, as well as primary-secondary investments. I believe that the choice of track and inclination is fundamentally consistent with making internet products. However, it is not about directly copying the previous product thinking into crypto investments; rather, there are many commonalities. For example, when making products, one must see if users really need them, rather than just relying on subjective opinions. One cannot fall into the trap of top-down, abstract design; it must be based on market recognition. The same goes for investing in crypto; the key to judging whether a new track or project is viable is to look at the market's acceptance level. For instance, in the AI track, there are many assets with valuations over a hundred million dollars in both primary and secondary markets, which indicates that the market recognizes it as a trend through actual actions. Therefore, I tend to first understand and observe the market's real choices before investing.
ChainCatcher: Please share your most successful and most failed investment in the cryptocurrency world.
0xWizard: I have many successful investment cases. When I first entered the space, I played on-chain games and algorithmic stablecoins, achieving nearly 100 times returns in about a month. Later, I participated in projects like ORDI, where large investments also yielded around ten times returns, and the ACT project brought nearly a hundred times returns.
Significant setbacks leave a deep impression. Therefore, I advise everyone to avoid using leverage in the crypto space, whether it’s contract leverage or regular leverage. Leverage has been a source of my major setbacks. Sometimes, the greedy side of human nature emerges, or the unwillingness to accept profit drawdowns leads to a desire to quickly recover losses, prompting one to use leverage or engage in contract trading.
Every detour may be a necessary experience for investors; one must go through it personally to truly understand what should and shouldn't be done in investing through the ups and downs of the process.
ChainCatcher: Some tracks may be false propositions. What are your main criteria for judging a track?
0xWizard: On one hand, it is crucial to look at the market's recognition from a bottom-up perspective. As I mentioned earlier, one cannot just subjectively imagine that a certain track is good; one must observe the market's real response. For example, in the AI track, many assets with valuations over a hundred million dollars have emerged in both primary and secondary markets, which is a clear indication that the market recognizes it as a trend, making it likely a track worth paying attention to.
On the other hand, one must also think about the most fundamental reasons behind the track. For instance, what is the essence of what the crypto space is doing? What elements are the most successful parts at its core? From these angles, one can assess whether a track is viable. Regarding crypto assets, I have summarized several judgment "axioms," which I encapsulate as the "Three Laws of the Bull Market Engine"—
“Old Technology, New Play”: The old saying goes, "Long slope, thick snow." One must see if this technology has enough foundational accumulation. On-chain assets rely on the advantages accumulated from previous infrastructures like DeFi, providing a basis for development;
“New Track, New Hope”: If it is a completely new concept, the market's imagination for its valuation ceiling will be larger. For example, the metaverse concept, even if the products may not meet traditional internet standards, can still achieve high market values during a bull market due to the new trend and hope it presents. For instance, during the 2020-2021 bull market, projects like SAND, despite having inferior products, saw significant market value growth due to the new trend and hope;
“Batch Generation of New Assets”: A single profitable asset is unlikely to create a shocking impact. Only when numerous related assets can generate profits will a strong attraction be formed. If different on-chain projects can allow investors to profit, it will attract more participants.
By integrating these bottom-up market recognition situations and reflections on the fundamental reasons, one can judge tracks with less chance of error. Even if there are occasional setbacks, they are merely temporary situations on small branches and do not affect the judgment of the larger track trend.
ChainCatcher: You just mentioned "the most fundamental reasons." Do these fundamental reasons point to the same place?
0xWizard: The answer to this question lies in what "cryptocurrency" is fundamentally doing. I believe it mainly does the following things, and it does them "ten times better"—there is a startup methodology in Silicon Valley that states when something is done ten times better than others, there is reason for people to adopt it, leading to significant success.
First is Asset Issuance. In traditional industries, asset issuance faces numerous legal, compliance, and procedural issues, making it extremely difficult. For example, engaging in asset-related matters in China can easily involve illegal areas. Even with platforms like the New Third Board or NASDAQ, transforming a company into an asset is challenging. In the crypto space, asset issuance is extremely convenient, with speeds far exceeding traditional industries. Various unique things can quickly be transformed into assets. Although there may be a lot of junk assets, this rapid asset issuance capability brings inherent vitality to the crypto space, as seen from ICOs to DeFi, inscriptions, and on-chain assets, all of which reflect asset issuance.
Second is Regulatory Arbitrage. I remember an interesting project, a Web3 project in Nigeria. Nigerians purchase shopping cards through Crypto in the U.S. and send them back home to their families. Although the intermediary fees can be as high as 10-20%, they are still willing to do so because Crypto provides a means of regulatory arbitrage, bypassing Nigeria's foreign exchange controls.
Third is Speculative Demand Dominance. Speculation is an essential part of the native demand in the crypto space. Similar to the stock industry, speculation is a neutral term in crypto. The crypto space has formed a global casino that operates 24/7, where people continuously engage in speculative trading, such as trading meme coins, leveraging speculation (R), and operations based on Ethereum's POS, all serving speculation. DeFi saw rapid growth in TVL and transaction fees during the last bull market, but it declined during the bear market, indicating that the real situation in DeFi revolves more around speculative demand rather than the previously expected transformation of the world and moving traditional financial assets on-chain. The scale of income from zero-sum games in the business models established in the crypto space is enormous (e.g., BI's income approaching BN level), which also illustrates the dominant position of speculation in the crypto space.
In the Future, There May Be 500 Billion-Dollar Memes, Focus on AI Memes
ChainCatcher: You previously mentioned that Memes have become the new main thread of this bull market. What are your expectations from the primary and secondary markets?
0xWizard: From the perspective of the secondary market, the Meme market will definitely experience peaks and troughs, generally following the larger market trends. The specific rise and fall are actually hard to predict accurately. I have made many erroneous predictions in the past; for example, I initially thought Memes should rally first, but in reality, assets like XRP, based on previous experiences, rallied only at the tail end of the market, while this time it started rallying right after Trump's election.
However, it is certain that there will be a rally, followed by a high probability of a drop, which could reach 80% or even 90%. This is a relatively common situation. During the rally, the market capitalization of some Meme coins could potentially reach tens of billions or even over a hundred billion dollars.
From the primary market perspective, I believe that the Meme market does not care about bull or bear trends; it will always exist. Even before the bull market, we could see Meme projects emerging with valuations of hundreds of millions or even billions of dollars. While it has its own small cycles, it does not exhibit a clear bull-bear cycle like the larger market; it may just appear crazier during bull markets. In the future, there may be around 500 Meme projects with market capitalizations exceeding a billion dollars. Even if a single project's market cap is not particularly high, perhaps in the tens of billions or a hundred billion, it is very likely that Memes with market caps between one billion and twenty billion dollars will emerge, as different chains are already experiencing such situations, like Solana and Base.
Due to the limited market cap space for on-chain Memes, if their prices are high before listing, it is advisable to wait for them to circulate to the secondary market and buy after price adjustments, as the valuation space in the secondary market is larger. High valuations in the primary market may struggle to support subsequent price increases due to insufficient liquidity.
ChainCatcher: Why have you been consistently promoting AI Memes?
0xWizard: First of all, investment in the crypto space relies on imagination. In the past, assets that were hyped in the crypto space had to have sufficient imagination. For example, DeFi was framed as a revolution in traditional finance, and the concepts of NFTs and the metaverse claimed that everyone would live in a virtual world in the future. These stories were particularly imaginative. However, now that NFTs have become clearer to everyone, and the metaverse, as seen with Facebook, has not been successfully navigated, DeFi needs to present actual data to prove its viability. Currently, I believe the most imaginative area in the crypto space is AI; it is difficult for other areas to have such appeal.
Secondly, AI has practical value. Just like DeFi has real transactions occurring, with TVL (Total Value Locked) data reflecting its value, AI is the same. Some AI agent projects are already generating revenue, such as Virtuals; many AI projects are being widely used, like ai16z; and some AI projects have considerable traffic, such as ACT and GOAT. Some AI agents, acting as knowledge aggregators, are already performing better than many human efforts by integrating corpuses to serve everyone—this is actually a productivity-level enhancement, not just empty slogans. It is tangible and can bring real change to cryptocurrency.
Therefore, AI in the crypto space is both imaginative and practical, and the practical aspects can further drive more applications to materialize. Based on these factors, I believe AI will be the biggest trend in the cryptocurrency industry by 2025, without exception; other trends are not on the same level as it.
ChainCatcher: You have mentioned the ACT project's ecosystem multiple times. Can you share your unique understanding of it?
0xWizard: ACT has a relatively unique ecological niche. It emerged as a Meme at a specific time, representing a tokenization of the future concept of AI. It supports some AI agents, allowing them to try more innovations, and brings them together on platforms like ACTswap, enabling users to interact with them through tokenized prompts on a single interface. This entire process is an interesting presentation of the integration of AI, crypto, and social media, showcasing a very imaginative form of AI development in this area.
Moreover, ACT is currently the only AI Meme project that has been listed on major centralized exchanges, which makes its advantages quite clear. Even if other AI Meme projects like GOAT, AI16Z, and Virtuals get listed on secondary exchanges in the future, I believe ACT will still be one of the most important targets. After all, in this circle, everyone develops together, gains market recognition together, and obtains more liquidity together, which leads to better overall performance, as the saying goes, "The lone walker is fast, but the group walker goes far." Therefore, overall, ACT holds a unique position and importance in the AI Meme field.
ChainCatcher: Besides ACT, are there any other projects in the AI Meme track that you are optimistic about?
0xWizard: GOAT is an early project that sparked interest in this track and has already formed a certain consensus; people recognize it quite well. There are also platform projects like ai16z and Virtuals, which have a large number of AI agents using them for production and other operations, making them worthy of attention.
The advantage of platform projects lies in network effects. Once they achieve scale and influence, it becomes relatively difficult for others to challenge them. Other standalone AI agent projects face fiercer competition, with faster iteration speeds and relatively lower moats.
So, if one wants to make a more stable investment, projects like ACT, GOAT, as well as platform projects like ai16z and Virtuals would be good considerations.
The Differences Between Primary and Secondary Meme Play Are Huge; Ordinary Investors Are Not Suitable for Hot Projects
ChainCatcher: What are the specific differences in strategies when participating in investments in Memes in the primary and secondary markets? Can you share your methodology?
0xWizard: When participating in Meme investments in the primary market, the focus should be on market capitalization. One needs to use experience to judge at what market cap level it is appropriate to participate and at what stage it is most suitable to enter. For example, if certain valuable targets drop from a market cap of over 100 million to between 25 million and 30 million, with a drop of about 80%, if it aligns with personal investment expectations and "strike zone," one can consider buying a small position. The accumulation process of primary market targets is relatively quick, possibly taking only a few days or a week. As long as the market makers have not sold off, there is a possibility of a subsequent rally, which may be accompanied by narrative and community enthusiasm recovery, leading to secondary rallies. Even if there is a drop after the rally, it may restart again later.
In the secondary market, one must adhere to chip logic. Investors need to learn the gameplay of the secondary market, such as Wyckoff theory and other technical analysis methods. It is not necessary to be an expert, but one cannot be completely ignorant. Otherwise, one may panic due to price fluctuations and fail to understand the underlying reasons. The secondary market has a chip accumulation process, known as the accumulation phase, which must be completed before entering the distribution phase.
Additionally, the secondary market places great emphasis on the hype around new assets and concepts. For example, in the AI track, after a large number of AI agent projects emerged, targets like ACT are likely to experience explosive growth in the secondary market due to various factors. Compared to projects like Virtuals and ai16z, which are nearing a billion-dollar market cap, they have limited funding capacity in the primary market, and the potential for further doubling in the secondary market is relatively small. Therefore, one must consider these factors comprehensively to understand and grasp the investment logic in the secondary market.
ChainCatcher: You once mentioned that investors should learn to distinguish between potential targets and hot projects. What indicators can help us differentiate between the two?
0xWizard: I believe we can observe and judge from the following aspects.
First is the narrative and community status of the target itself. In terms of narrative, for some AI-related projects, having an innovative AI crypto interaction model or representing a unique trend makes the narrative stand out. On the community side, it is essential to pay attention to whether loyal fans continue to build during price declines, engaging in daily secondary creations and remaining active across various platforms. Additionally, the community should not be limited to just Chinese or English; both Chinese and English communities need to have enthusiasm, as this will raise the upper limit of subsequent development. Narrative and community can be seen as fundamental elements for judgment.
Secondly, the financial aspect. One should pay attention to the chip situation and determine whether the market makers have taken profits and handed the chips over to large holders. Some chip analysis methods can be used, such as checking if the front row consists of loss-making large holders; if so, it may be challenging for that target to rise again. If the market makers still hold a significant amount of inactive chips, it indicates their motivation to continue accumulating chips and perform secondary rallies. By integrating the previously mentioned trends, community status, and the financial chip situation, one can roughly judge whether a target is a potential one.
Overall, hot projects are more suitable for those who are relatively professional in on-chain gaming, have the energy to participate early, and can invest tens of thousands or hundreds of thousands of dollars, profiting by selling once the price rises to a certain level—these are the "P players." They excel in participating in the first wave of market enthusiasm. However, for most ordinary investors, it is advisable to focus more on potential targets, although this should be assessed in conjunction with one's actual situation.
ChainCatcher: In your investment process in the crypto space, you must need to gather a lot of information to assist in decision-making. Can you share some useful sources for information acquisition?
0xWizard: I have a diverse range of information sources. First, data websites like GMGN provide daily rankings of popular targets, covering various Memes and other related content. I recommend checking it at least twice a day, recording newly emerged targets, and then observing their subsequent price movements and changes in chip structure, combining these with their trends and community situations to make informed investment decisions—this is crucial.
Secondly, there are some tools; certain tools can push hot BOTs, and others recommend dozens of related pieces of information daily. Of course, users need to have the energy to filter and review on Telegram.
Additionally, there are forwarding groups, such as domestic Alpha groups, where one can learn about what others are focusing on and discussing. Twitter is also very important; follow those who frequently share insights in the crypto space and participate in various projects, but one must filter and select tweets from those they consider reliable and valuable for reference. Furthermore, people can form their own small circles to find like-minded individuals with similar levels to exchange and discuss, as the saying goes, "Many hands make light work," which can speed up information acquisition. In summary, by comprehensively utilizing these channels, one should not face a shortage of information.
ChainCatcher: Faced with a vast amount of information, how do you filter and assist in investment decision-making?
0xWizard: This is indeed a key issue. When there is an abundance of information, filtering becomes very important. First, one must assess based on their investment goals and risk tolerance. For example, some information may seem very enticing, but if the associated investment risk exceeds what one can bear, then caution is warranted.
From the targets obtained, as I mentioned earlier, one should analyze whether the narrative is innovative, whether there is development potential, whether the community is active and cohesive, and whether both Chinese and English communities are considered. One cannot blindly follow what others say is good; one must have their own judgment logic.
In practical application, it is essential to understand that investing carries risks. Even if extensive information gathering and analysis are conducted in the early stages, mistakes may still occur. I recommend that when starting to invest, one can initially use a small portion of their funds to try it out, treating it as tuition to gain experience. Once they become more familiar and confident, they can gradually adjust their investment strategy. At the same time, it is crucial to clarify one's investment style and know which types of investments are suitable for them. For instance, hot projects are suitable for professional investors with the energy to participate early, while ordinary investors may be better off focusing on potential targets. Ultimately, it still requires a comprehensive judgment based on one's actual situation.
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