Dialogue "Meme Wizard" 0xWizard: How to Capture the Next 500 Billion Dollar Memes

ChainCatcher Selection
2024-12-20 10:14:03
Collection
On-chain memes are just beginning, while AI memes are more worth paying attention to.

Interview: Arain, ChainCatcher
Guest: 0xWizard

*Organizer: *Arain, ChainCatcher

0xWizard is a Chinese crypto KOL 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, although 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 essential reasons, he believes that although the bull market has begun, on-chain Meme is actually just starting.

"In the future, there could be 500 more billion-dollar Memes, but it may be difficult to see another $50 billion asset." In an exclusive interview with ChainCatcher, 0xWizard stated. However, the primary and secondary gameplay of Meme is completely different. For some high-valuation Meme projects that are about to flow into the secondary market, he recommends observing before building a position.

In the interview, 0xWizard also shared his methodology for capturing new tracks and new narrative judgments, including the "Three Laws of the Bull Market Engine" and the essence of tracks. He discussed several popular AI Memes and Meme investment experiences.

The following is the interview content:

My Product Background Makes Me Better at New Narrative Tracks and Primary and a Half Investments

ChainCatcher : What did you do before entering the crypto space?

0xWizard: I worked as a product manager in an internet company, participating in some B-end and C-end product designs. 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 own 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 new narratives, as well as primary and a half investments. I believe that the choice of track and inclination is fundamentally consistent with making internet products. However, it’s not about copying the previous product thinking into crypto investments; there are many commonalities. For example, when making products, one must see if users really need it, rather than just relying on subjective feelings. One cannot fall into the trap of top-down abstraction in 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. For instance, in the AI track, there are many billion-dollar valuation targets in both the 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 real choices of the market when investing.

ChainCatcher : Please share your most successful and most failed investment in the world of cryptocurrency.

0xWizard: I have quite a few successful investment cases. When I first entered the space, I played on-chain games and algorithmic stablecoins, and within about a month, I had a 100x return. Later, I participated in projects like ORDI, where large capital investments also yielded around ten times returns, and the ACT project achieved nearly a hundred times return.

Significant setbacks are quite memorable. Therefore, I advise everyone to avoid using leverage in the crypto space, whether it's contract leverage or ordinary leverage. Leverage is the source of my major setbacks. Sometimes, the greedy side of human nature emerges, or one is reluctant to accept profit drawdowns, always wanting to quickly recover losses, which can lead to leveraging or engaging 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 this 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 related targets with valuations over a billion dollars have emerged in both the primary and secondary markets, which is a clear indication that the market recognizes it as a trend, making it highly likely to be a track worth paying attention to.

On the other hand, one must also think about the most essential reasons behind the track. For instance, what is the fundamental purpose of the crypto space? What elements are the most successful parts at its core? From these angles, one can measure whether a track can succeed. Regarding crypto assets, I have summarized several judgment "axioms," encapsulated as the "Three Laws of the Bull Market Engine"------

"Old Technology, New Gameplay": As the saying goes, "Long slope, thick snow." One must see if this technology has sufficient 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 valuation ceiling will have more room for imagination. Just like the previous metaverse concept, even if the product may not meet traditional internet standards, it can still achieve high market value during a bull market because it presents new trends and hopes. For example, during the 2020-2021 bull market, projects like SAND, despite having inferior products, saw significant market value growth due to new trends and hopes;

"Mass Production 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 essential reasons, one can judge a track without easily going wrong. Even if there are occasional setbacks, they are temporary situations on small branches and do not affect the judgment of the larger track trend.

ChainCatcher : You just mentioned "the most essential reasons." Do these essential 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, because it does them "ten times better"------ There is a startup methodology in Silicon Valley: when something is done ten times better than others, people have reason to adopt it, which can lead to significant success.

The 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 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 peculiar items 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 ICO to DeFi, inscriptions, and on-chain assets.

The second is regulatory arbitrage. I remember a very 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 way to bypass Nigeria's foreign exchange controls.

The third is that speculative demand dominates. Speculation is an important part of the native demand in the crypto space, similar to the stock industry, where speculation is a neutral term. The crypto space has formed a global casino that operates 24 hours a day, where people continuously engage in speculative trading, such as trading dog coins, leveraging speculation (R), and operations based on Ethereum's POS. 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 have peaks and valleys, generally following the larger market trends. The specific rise and fall are actually difficult to predict accurately. I have made many mispredictions before; for example, I originally thought Memes should rally first, but in reality, projects like XRP, according to previous experiences, only started to rally at the tail end of the market, whereas this time it began to rally right after Trump was elected.

However, it can be confirmed that there will be a rally, and it is highly likely to fall afterward, with declines possibly reaching 80% or even 90%, which is a common situation. During the rally, the market capitalization of some Meme coins could potentially reach tens of billions of dollars, or even over a hundred billion dollars.

From the perspective of the primary market, I believe 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 continuously emerging with valuations of hundreds of millions or even billions of dollars. While it has its own small cycles, it does not exhibit obvious bull or bear cycles 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 does not have a particularly high market cap, it could be in the tens of billions or hundreds of billions, and from the perspective of on-chain carrying capacity, it is very likely that Memes with market caps between one billion and twenty billion dollars will emerge. Different chains are already experiencing such situations, like Solana, Base, etc.

Due to the limited market cap space for on-chain Memes, if their prices are high before listing, it is advisable to wait until they circulate to the secondary market and buy after price adjustments, as the valuation space in the secondary market is larger, and high valuations in the primary market may struggle to support subsequent increases due to insufficient liquidity.

ChainCatcher : Why have you been actively promoting AI Memes?

0xWizard: First of all, crypto investments rely on imagination. The assets that have been hyped in the past must have sufficient imagination. For example, the previous DeFi narrative revolved around the revolution of traditional finance, and the NFT and metaverse concepts claimed that everyone would live in a virtual world in the future. These stories are particularly imaginative. However, now, people have basically understood NFTs, and even Facebook has not successfully navigated the metaverse. DeFi needs to present actual data to land. Currently, I believe the most imaginative thing in the crypto space is AI; it is hard for other concepts to have such appeal.

Secondly, AI has actual 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 income, 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, have already outperformed many human efforts by integrating a corpus to serve everyone—this is actually a level of productivity enhancement, not just empty slogans. It is tangible and can bring changes to cryptocurrency.

Therefore, AI has both imagination and the ability to land in the crypto space, and the landing part can further drive more applications to materialize. Based on these factors, I believe AI is 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 position. It is a Meme that emerged at a specific time, representing a tokenization of future AI concepts. It promotes support for some AI agents, allowing them to try more innovations, and brings them together on platforms like ACT swap, enabling tokenized interactions through prompt commands on a single interface. This entire process is a fascinating presentation of the integration of AI, Crypto, and social media, showcasing a highly imaginative form of AI development in this regard.

Moreover, ACT is currently the only AI Meme project listed on major centralized exchanges, which gives it a clear advantage. Even if other AI Meme projects like GOAT, AI16Z, and Virtuals also 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, gets recognized by the market together, and gains more liquidity together, which will lead to better overall performance, just 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 other projects in the AI Meme track that you are optimistic about?

0xWizard: GOAT is a project that initially sparked interest in this track and has already formed a certain consensus, with people recognizing it relatively 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 purely AI agent projects will face fiercer competition, with faster iteration speeds and relatively lower moats.

So, if one wants to make a relatively safe investment, platform projects like ACT, GOAT, and ai16z, 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 needed when participating in Meme investments 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 cap situations. One needs to judge based on experience what market cap level is suitable for participation and at what stage it is appropriate to enter. For example, if certain valuable targets drop from over 100 million to between 25 million and 30 million, with a decline of about 80%, and if it meets personal investment expectations and "strike zone," one can consider buying a small position. The accumulation process for 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 of the rally.

Additionally, the secondary market places great emphasis on the hype of new assets and new concepts. Taking the AI track as an example, after a large number of AI agent projects emerged, targets like ACT, considering various factors, are highly likely to experience explosive rallies in the secondary market. Compared to projects like Virtuals and ai16z, which are approaching a billion-dollar market cap, they have limited capital capacity in the primary market, and their 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 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 example, some AI-related projects possess innovative AI crypto interaction models or represent unique trends, making such narratives quite outstanding. 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 either Chinese or English; both Chinese and English communities need to be vibrant, as this will raise the upper limit of subsequent development. Narrative and community can be seen as one of the basic elements for judgment.

Secondly, the financial aspect. One should pay attention to the chip situation, judging whether the market makers have taken profits and handed the chips over to large holders. Some chip analysis methods can be employed, such as checking if the front row consists of large holders who are all at a loss. If so, it may be difficult 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 aspects of chips and funds, 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 enter with tens of thousands or hundreds of thousands of dollars and exit for profit once they rise to a certain extent—these are the "P players." They excel at participating in the first wave of market enthusiasm. However, for most ordinary investors, it is advisable to focus more on and participate in 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 sources for information acquisition. First, there are data websites like GMGN, which release rankings of popular targets daily, covering various Memes and other related content. I recommend checking at least twice a day, recording newly emerged targets, and observing their subsequent rise and fall, as well as changes in chip structure, then combining these with trends and community situations to comprehensively judge whether to participate in investments; this is crucial.

Secondly, there are some tools. Some 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 check 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. However, one must filter and select tweets from those they consider reliable and valuable for reference. Furthermore, people can form their own small circles, finding like-minded individuals to discuss and exchange ideas, 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 massive amount of information, how do you filter and assist in investment decisions?

0xWizard: This is indeed a key issue. When there is a lot of information, filtering becomes very important. First, one must judge based on their investment goals and risk tolerance. For example, some information may look very tempting, but if the corresponding investment risk exceeds what one can bear, then it needs to be considered cautiously.

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 just follow blindly because others say it’s 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 done in the early stages, mistakes may still occur. I recommend that when starting to invest, one can first try with a small portion of funds, treating it as tuition to accumulate experience. Once familiar and confident, one can gradually adjust their investment strategy. At the same time, one should clarify their investment style, knowing which types of investments they are suited for. For instance, hot projects are suitable for professional investors with the energy to participate early, while ordinary investors may be more suited to focus on potential targets. Ultimately, it still requires a comprehensive judgment based on one’s actual situation.

ChainCatcher reminds readers to view blockchain rationally, enhance risk awareness, and be cautious of various virtual token issuances and speculations. All content on this site is solely market information or related party opinions, and does not constitute any form of investment advice. If you find sensitive information in the content, please click "Report", and we will handle it promptly.
banner
ChainCatcher Building the Web3 world with innovators