Establishing advanced cognition in the cryptocurrency industry: demystifying secondary funds and simplifying KOL selection

Author: ZTZZ ฿

Secondary Funds

1. The vast majority of secondary funds only make money in bull markets; not losing your pants and running away in a bear market is already considered good;

2. Please do not invest in any secondary funds established by traders who are not native to the crypto space. Do not invest in secondary funds formed by traders from A-shares, Hong Kong stocks, US stocks, or futures;

3. In my personal experience, a good secondary fund trading team should not exceed 3 people;

4. I personally do not recommend retail investors to invest in secondary funds, as it is difficult for you to encounter good ones;

5. If you must invest, remember that the returns of secondary funds can be fabricated, and real trading can also be fake. Talk less with marketers and more with traders; the essence of investing in secondary funds is investing in the trading team.

KOL

1. Please understand first that people whose main identity is KOL basically do not need to be considered. Those who have their own jobs in the crypto space and are willing to share to become KOLs can be looked at. KOLs who reach the top of the industry in the crypto space and output methodologies should be focused on;

2. You should do subtraction with KOLs, not addition. Gradually filter the KOLs you follow, understand how they make money, the more they can earn from various ecological positions, the more they will contribute valuable insights, and the less likely they are to easily cut you off;

3. There are KOLs who specialize in certain sectors, such as NFT, DEFI, inscriptions, and yield farming. Please pay attention to KOLs who have made significant money in these sectors, have their own methodologies, and consistently output them. These KOLs are generally the elite among retail investors but may not excel in other sectors due to strong path dependence. If you can sense sector rotation, you can effectively use the methodologies and information provided by these KOLs;

4. For secondary trading KOLs, knowing three to five is sufficient; it is recommended to maintain friendly relationships with one or two offline. When you have a certain level of trading ability, these one or two trader friends will understand you well, and they will be honest with you and remind you at critical moments;

5. Do not trust those KOLs on Twitter who are overly friendly and call you brother! Do not believe those KOLs who boast about their wealth or good backgrounds every day! Do not trust the profit screenshots or insider information from such KOLs!

Exchanges

1. The ecology of top exchanges and small exchanges is completely different;

2. The primary goal of exchanges is user growth, and making money comes second;

3. I always recommend newcomers in the crypto space to learn from large exchanges;

4. Large exchanges and VCs that incubate their own projects are the training grounds for talent in the crypto space;

5. Never think that large exchanges won't run away or do evil.

VC

1. Top VCs and small VCs are also completely different entities; if a VC has not experienced a complete bull and bear market, you can ignore them for now. Every bull market sees many new VCs established, then they become impressive, and then they lose everything; they often don't even have a complete investment logic, but they generally think they do;

2. The profit-making ability of VCs mainly comes from primary investments, but the profit margins of primary investments in the crypto space have been gradually declining with the bull market cycles. Most VCs haven't made money this year;

3. If you have the opportunity to chat with VCs, listen more to their stories about failed investments; it will be more helpful to you;

4. Drinking and chatting with VC bosses will greatly help your growth in the industry;

5. The correct way to learn from VCs is: 1. Join them. 2. It is absolutely not about reading their research reports and calls, but systematically looking at what a particular VC is investing in, what the logic is, how the project is promoted, its performance after launch, and whether the VC is making money and if the project is successful. You need to track the entire chain and think independently.

Technology

1. Most projects' technologies are a pile of garbage, including some technology projects that retail investors hype up. To understand the technology of a certain project in the crypto space, you need to spend a lot of time learning the basics and then mingling in the geek circles of the crypto space;

2. Technology itself can also be marketed;

3. Technology is not that important in a project, but it determines the project's ceiling;

4. Don't listen to internet-employed technical personnel talk about crypto technology; the blockchain tech community is completely disconnected from them; most of these people are quite incompetent yet have a high opinion of themselves;

5. Never mythologize crypto geeks, nor follow them to buy coins randomly; but please respect them!

Marketing

1. Projects that do not understand marketing will definitely fail;

2. If a project's operations director comes from a traditional large enterprise or the internet without any achievements in the crypto space, this project is likely to fail. Conversely, if a project's operations director has a background in pyramid schemes, you should pay close attention;

3. Most project teams' marketing is very poor. A complete project operation network includes: operational framework, brand building, community management, crisis public relations, new media operations, and channel maintenance;

4. A great operations director will bring many operational resources from within the industry; they will update their marketing network in each bull market, ensure their traffic channels are effective, and keep their marketing methods up to date. A good operations director, the earlier they join a project, the more powerful they can make the project. For example, project teams often come to me saying, "Our operations director messed up; he spent a lot of money on KOLs but didn't bring in any volume. Z, please help." Next time, please don't come to me about this. Also, now you know how many KOLs make money;

5. Talk more with outstanding operations directors, and you will find that they generally share similar traits, and those who venture out to start their own businesses are very impressive and deserve close attention. For instance, the owner of a certain second-tier top exchange comes from an operations director background.

BD

1. I do not recommend newcomers to the industry to work in BD because after quickly connecting with many people, you will feel anxious and confused, unable to clarify the methods of making money;

2. Great projects do not need BD; mediocre projects need BD but it won't help;

3. The essence of BD is to rely on social skills, but social skills are one of the basic abilities everyone has; unless you are particularly skilled in this area, the ecological position of BD work is weak;

4. BDs should learn some other skills to enhance their competitiveness among peers.

I originally didn't plan to talk about BD, mainly because retail investors can't access it, but since I've written it, consider it a job guide for you.

Project Teams

1. Top project teams possess resources far beyond what retail investors can imagine; they are often incubated by top industry figures, so embrace top projects;

2. The direct profits of common crypto project teams can be simply summarized into two aspects: the money raised from the project and the money from the secondary market. Quality project teams will lead VCs and many retail investors to earn money from the market, ordinary project teams will earn money from retail investors for VCs, and project teams that don't want to mix will earn money from VCs; foolish project teams not only do not make money but also inexplicably lose money;

3. Projects have different characteristics based on their segments. In fact, narratives have hierarchical distinctions; top-level narratives lead revolutions, secondary narratives guide funds, tertiary narratives have wealth creation effects, and quaternary narratives are nothing. I have previously created a complete set of narratives for many project teams; the hierarchy of narratives determines the project's ceiling;

4. Investing in projects is essentially investing in people, and this saying holds true in the crypto space as well. If you are fortunate enough to know the project founder, make sure to chat with him more and observe him closely;

5. I always encourage retail investors to try to start projects, even the smallest ones, because this can quickly elevate your understanding. In the crypto space, project teams are the center of everything.

There is so much to say about project teams, and the focus is completely different for retail investors and practitioners; let's discuss it separately in the future.

Retail Investors

1. Do not become the lamb to be slaughtered in original sin, but strive to move forward and dance with the scythe;

2. You will never earn money beyond your understanding unless you rely on luck, but the money you earn by luck will often be lost due to lack of skill ------ BY: "Wealth Flow";

3. The crypto space compensates for character and understanding, rather than rewarding effort. Unless you change your character, the people you associate with, or the books you read, breaking your original understanding, otherwise, five years later, you will be exactly the same as now. Choice is greater than effort; when opportunities arise, dare to invest heavily, hold firmly, and have good guiding principles, a good circle, and good logic; all are essential. Ultimately, money flows from the impatient to the calm ------ BY: Shen Yu;

4. You are here to make money; do not harbor long-term hostility and disdain for anything, such as VCs, coins, pyramid schemes, MEMEs, or foolish KOLs. Arrogance is the greatest enemy of discovering crypto ALPHA.

You will find that in my five points for retail investors, I did not mention any execution-level experience, but rather focused on some principles. That is because retail investors have seen too many KOLs preach various success theories; those who are capable have long since stopped being retail investors. Those who can break away from being retail investors only need a little motivation or some key points to pull them along. And most people are only suited to be retail investors for their entire lives. Not becoming a lamb is already their best outcome; for them, the essence of investing is:

Lambs, choose a scythe.

Let me conclude this article with a dialogue from Trump:

A girl asked Trump, "Mr. Trump, you have done many great things in your life; I just want to know how an ordinary person should start?"

Trump seriously replied, "First, never think of yourself as an ordinary person; you asked the wrong question from the start. Because you are extraordinary, you have many things to do. I know you; you are very smart and very beautiful; you are right there."