Conversation Pima: If you want to invest in Memecoin, how can you make money?

Original Article Title: "In Conversation with PiMa: From MEME Coins to Launchpads, the Behavioral Economics Feast and Investment Logic Behind the YOLO Culture"

Original Article Translation: Deep Tide TechFlow

Original Article Source: Web3 101

Broadcast Date: May 24, 2025

Hosts:

· Liu Feng, BODL Ventures Partner, Former ChainNews Chief Editor

· Xiong Haojun Jack, Rhythm BlockBeats Deputy Editor, Host of "Web3 Anonymous Talk"

Guest:

· PiMa, Co-Founder of Continue Capital

Cosmos Meme Reflection: The Liquidity Siphon Effect and Matthew Effect

Liu Feng: As an OG, you have had remarkable achievements in the public chain and DeFi fields. However, in today's Crypto investment world, OG feels like a derogatory term. The coolest thing now is the story of a young gun turning into a grandmaster. How do you view this trend?

PiMa: I consider myself a seasoned participant in Memecoins. On the one hand, in this cycle, I have been more involved in Solana. I have participated in all Memecoins on Solana, including the earliest ones like BONK, WIF, BOME, POP CAT, to later ones like GOAT, and a plethora of projects that have been through natural selection. At that time, we naively believed that if there was a revival of Solana Meme, there would be a certain revival on other public chains as well. Therefore, after positioning in BONK on Solana, we went to ecosystems like Cosmos and Avalanche to seek similar Memecoins. At that time, it seemed like a seamless logic to me.

However, I overlooked the liquidity siphon effect and the Matthew effect. Once you participate in the first wave, it's essentially over. You may think there will be a second wave or a third wave, but in reality, it completes its historical mission in an initial rebound stage. The remaining mainstream attention and funds will flow back to the on-chain ecosystems primarily led by Solana at that time. I previously shared that Memecoins roughly account for 1% to 3% of the public chain market cap, potentially reaching 5% in extreme cases. I conducted many observations and statistics and concluded that the top Memecoins occupy 1% to 5% of the market cap at a certain time frame. There are a few exceptional cases in this range, such as DOGE and SHIB, but I excluded them.

Later, as the cryptocurrency industry developed, you will find that Solana is completely incompatible with this ecosystem. It has seen a large number of successive Memecoins emerge, creating an atmosphere that is completely different from other ecosystems. This is entirely determined by Solana's retail investors. Solana is a market that revolves around retail investors, which has resulted in the Solana ecosystem giving rise to many volatile and highly market-oriented tracks and domains that are prone to emotional swings. On one hand, I am observing the entire Solana ecosystem, and on the other hand, for a track such as Memecoin that already has liquidity, participation, a wide user base, and is relatively non-mainstream, I am also willing to actively participate.

How to Make Money in This Meme Coin Behavioral Finance Feast?

Liu Feng: If you want to invest in Memecoin, how can you make money? This is a very blunt question.

Pi Ma: I basically have 90% of Memecoins on Solana, or even higher, and do not pay attention to any other coins on any other chains. This market has already evolved the optimal solution for you, and you are just looking for a secondary option within this optimal solution.

The core reason for seeking a secondary option is that you did not achieve a certain result within the optimal solution, or in other words, did not participate, and you are only looking for that kind of pump after missing out. This easily traps people into an investment pitfall. You will find that once you enter, it either does not rise, or it tortures you between rises and falls. Another core reason is that it is very difficult to cash out. You will find that when the Solana head meme coin retraces by 30%, your 200% profit is gone, and the retracement is very fast. So, in any investment system, I basically do not pursue the final cash-out for safety. Personally, I believe that it is very difficult to try to avoid the first cut from a bull to a bear market. Crypto is 24/7, and you cannot constantly monitor all market fluctuations in real-time, which means that while floating profits are easy, cashing out is difficult. The role of the lead is that it can give you a second opportunity to reach a higher point, allowing you to attempt to take profits so I basically only focus on the lead.

Secondly, I believe that when everyone is investing in Memecoins, many people often focus on quick gains. However, from my personal experience of achieving significant results, quick gains may not be suitable for medium to large investors unless you have a very small volume. Participants in quick gains are often attracted by short-term attention and do not consider the core operating logic of Memecoins. If you split Memecoins into the x-axis and y-axis, where the x-axis is time and the y-axis is market value, you will find that the market value of the vast majority of Memecoins is directly proportional to time. Time is a very important concept, and besides extreme cases like BOME and TRUMP, all existing Memecoins with a market cap of over $1 billion have been running for at least six months. Without the factor of time, many assumptions are invalid.

I believe Memecoin is often a feast of behavioral finance. One of the founding fathers of behavioral finance is Richard Thaler, also a Nobel laureate, who divided the original investment system into two types: a savings account and a fun account. Memecoin as a whole has strong fun account attributes and functions. Daniel Kahneman has also previously written a very famous thought. He basically divides people into two systems: System 1 is thoughtful, logical, rational, and energy-consuming; System 2 is simple, direct, quick, and less energy-consuming. Reflected in the Crypto field, Memecoin is perfectly compatible with System 2, quick, efficient, highly volatile, satisfying some of our emotional and financialized FOMO operations.

In the past two weeks, I came across a paper stating that a person's investment decision-making process may not exceed 6 minutes, now in Memecoin, it may even be 6 seconds, which is very similar to many of our investment decisions. I actually make many investment decisions very impulsively. Of course, my impulsiveness is because I have already carefully considered and arranged the fundamental beta or savings account, so I have a lot of time and energy to look for more possibilities in the Alpha market. A very important challenge of behavioral finance to traditional finance is that everyone is irrational, and what you think is rational only exists in your own information cocoon. People live in a huge noise, and most people do not have the ability to distinguish noise.

Overall, I think Memecoin is a great development in behavioral finance. If we have further development of behavioral finance-related theoretical systems in the future, we can actually use some of Memecoin's data as research samples.

Three Questions to the Soul: Willing to Buy? Willing to Hold a Heavy Position After Buying? Can You Hold on During a Downtrend?

Liu Feng: From the past few cycles, we have learned your rigorous investment logic. Today, we may only look at volatility, and only see if the social consensus of the Meme can quickly attract liquidity. Do you think this situation can continue?

Pi Ma: In fact, many investments are difficult because the times are changing, the structure of investors, the age range of investments, and the income level of investors are all changing.

First of all, I will give a conclusion that Memecoin will definitely continue to develop, not only in Crypto. In my system, the Crypto field is not a standalone market; it is fully related and synchronous with global development. People who have missed the dividend of the times, a large number of unemployed people, those eliminated by globalization, and those whose class has solidified without direction and investment opportunities. They use a kind of rebellious psychology to refuse to give a large number of votes to those elite settings, whether it is U.S. tariffs, the rise of European new nationalism, including the rise of right-wing conservatism in Australia, there is a global wave of new nationalism. The trend in real life condenses into slogans like All In, putting everything in, etc. This trend is not only in the Crypto field but global.

I believe the rise of nationalism has injected significant strength into the Memecoin market as well as other niche markets and speculative markets. This strength, part of which will impact the traditional financial market significantly, will continue to grow with the development of AI and peer-to-peer internet information technology. You are interested in P Jr. because he has brought in a large number of chips and results, which is the most impactful, viral, and attention-grabbing. I myself would avoid sharing practical charts, but many other Twitter users instead exploit it to gain tremendous exposure. On the other hand, we now emphasize information equity. Human attention is very limited. When a large part of your attention is focused on P Jr., you definitely will not delve deep into the theoretical system. The core question boils down to the same old: Are you willing to buy it? If you buy it, are you willing to hold a large position? When the price falls, can you hold on?

Many times, you only get the results without understanding the decision-making thought process behind them. So, even if you know the results, you still will not buy, dare not buy, will not buy heavily, and will not hold for long.

With the advent of a lonely society, for niche tracks, selling demand is more attractive than selling products. In the Crypto field, what is demand? It is psychological identity. Users holding Memecoins form a small group and community, creating a strong sense of psychological identity, and this highly identified community will only reinforce itself. Unfortunately, Pump has already launched over 1 million Memecoins, but only a few have survived. This state of excessive participation and lack of results will create a very counterproductive situation: seeing others achieve good results will stimulate oneself greatly, leading to working harder, making further wrong choices in the wrong direction, and then affecting one's mindset, making it impossible to focus on analysis and summary, resulting in even worse outcomes. It's a very vicious cycle.

Memecoin is a very interesting social phenomenon, but fewer and fewer people are observing it.

Focus More on Meme Infrastructure: Which LaunchPads Are Worth Researching?

Jack: Many Memes, even if they increase a hundredfold, may not bring about particularly significant results. So, what is your purpose in frequently participating in mid-to-small-cap Memes?

Horse: This is a gauge of market participation. I need to participate in the market with the most liquidity and the largest number of retail investors. When I discuss Memecoins, I am not saying that Memecoins can bring me any particular results. For our investment, I may be more concerned about Memecoin infrastructure, such as DEX, LaunchPads, and so on. This is a completely different system. You can think of it as Beta on the left hand and Alpha on the right hand. For me, after laying a solid foundation in my Beta work, I allocate some time and energy to invest in the Memecoin market to feel the market trends.

The best thing about the Crypto field is that you can sense the global capital market flow with very subtle observations. All Memecoins have gone to zero, and for us, it was not a significant loss. However, each Memecoin's market movement is mapped and correlated with other investment markets, but most people are not aware of this. We need to consider the global capital allocation, and these assets only serve the selection of my core Beta. Therefore, participation in Memecoins is just to validate some logic and allow us to more reasonably evaluate some core Beta assets.

Liu Feng: I actually understand your logic. Previously, you shared the Meme investment logic, why only seek real returns on high-market-cap Memes? This is related to your scale, and it is completely different from the logic of many people who want to change their destiny through Meme investments. Retail investors may only talk about Alpha, but for you, Beta is more important. This era is actually the era of Memecoins, and Meme has become the voice of the times. We should not deny it; we should accept it. So, in this case, we can look at Beta and see the Meme launch platforms that have undergone several generations of evolution. Can you introduce which ones you find appealing and worth researching?

Pi Ma: The most eye-catching one is Pump.fun (referred to as Pump below). In fact, they do not have much innovation, but the core business model of Crypto is transaction fees. The more market share you can occupy from this business model, the more cash flow you have, and I can give you a valuation accordingly. Pump fulfills the need for asset issuance, a product that integrates into the huge demand for Memecoins. The two sides will hit it off, there is an infinite supply, and there is an intangible pursuit of ultra-high multiple retail investors. That's why you will see asset issuance platforms spring up like mushrooms after rain.

Retail consumers in the Crypto field are a highly financialized group of people with a strong risk appetite. They have a high gambling impulse, and you need to design products based on this impulse. Where do retail investors spend money? Only on transaction fees. They would rather pay you a higher fee in the hope of hitting a Memecoin. They are not fools. Why do they pay such high MEV priority fees? Because they believe that the returns can cover the cost.

Our positioning of Crypto retail investors is a highly financialized group. We launch all products around their needs. This is one of the key factors for Pump.fun's success, including later ventures like Virtuals focused on AI, which is also a LaunchPad. Both aim to satisfy the strong demand for asset issuance, so observing these launch platforms is a very good investment target. Memecoins may die a thousand or ten thousand times, but there will be a continuous rise of Memecoins. However, a good launch platform can solidify your funds, provide profits, and truly allow you to profit effortlessly, capturing the entire Memecoin trend or wave to achieve the maximum value capture.

Launchpad and Public Chain: Attracting Developers is Key

Jack: For example, now that Virtuals has come to Solana, do you think it's already too late? Is there only one opportunity?

Pima: With all launchpads, you need to understand their supply and demand. Who serves as the supply side of the launchpad? This is a very important factor. The supply side of Pump is mostly anonymous, Virtuals has some selectivity, but of course, it's also anonymous. So, when evaluating the quality of any launchpad, you should closely monitor revenue. For launchpads, my assessment system is exactly the same as for DEX, and in another sense, launchpads and public chains are somewhat alike, but people have not elevated the two to the same level.

As a launchpad, the core capability lies in how to attract developers, which is exactly the same logic as with public chains. Why would developers go to A instead of B? This is something worth delving into deeply, as it is the most important question determining the future direction of launchpads and public chains. Because the experiential end of the service is dominated by a large number of retail users, we usually consider launchpads, including public chains, to be a to C market. However, in my view, they are more of a to B market. Without good assets and developers entering, your public chain/launchpad will never take off.

For public chains and launchpads, the most important thing is future cash flow, which relies on continual transaction volume, and transaction volume relies on a continually enriched variety. Therefore, how to attract excellent developers to your launchpad is key. Capturing retail users is actually very easy as long as you have good assets; retail users will come flocking. Of course, whether it's a public chain or a launchpad, many times it also tests some marketing tactics and methods. However, without the injection of high-quality assets, a launchpad or public chain will find it hard to sustain.

Believe's Unique Market Positioning

Pima: I think Believe's market entry strategy is correct. APP developers have a significant need for financing, but they hardly ever receive it. The supply side for Believe is independent developers who develop a large number of apps each year, hoping to achieve positive cash flow from the apps but lack the appropriate channel to monetize and finance the apps. If the market is niche, it's impossible to achieve a market cap of billions or hundreds of billions.

Believe focuses on this group of independent developers or those who want to try new areas and directions. Crypto retail investors have a very high risk awareness and tolerance. Most importantly, the market cap is very low, which has long made achieving hundreds or thousands of times gains a possibility. Believe directly borrows some experiences from other launchpads, that is, cost-sharing with these developers, which is very good. It has achieved positive cash flow for independent developers in the cold start phase. In the traditional field, developing an app requires a lot of people to do a lot of work including development, marketing, and more. However, in Crypto, you only need to create a product. Whether this product can succeed is not important, but once launched successfully, you can receive hundreds of thousands of dollars in cash flow within a week. This is a very considerable income for independent developers. Once they have this positive cash flow, they can continue to refine the product, expand the market, and serve users.

This actually explains why this model is called the Internet Capital Market. It meets the strong demand for financing from a large number of small developers and micro-enterprises, unleashing the supply side. What's also very much in line with the trend is that with the arrival of AI, a solo developer can achieve very good annual revenue by themselves. Your promotion and operation can fully leverage TikTok and Twitter for viral spread. But can very large, very good companies emerge on the Believe platform? I actually lack confidence in this. I take an observational attitude towards this, but what I truly believe is that Believe has very well addressed the niche market. This niche market serves a small range, caters to specific groups of people, and serves a highly targeted customer base. They make money from this segment, meaning they don't need to grow big, but they have their market.

Another impressive aspect of Believe for me is their careful planning and packaging. Their page design is quite thoughtful, and they have also placed emphasis on launching certain projects and activities. They try to tell a story. In addition to the crypto field, they can also collaborate with other niche markets. Traditional internet developers are not familiar with crypto. This process is bound to be similar to the first wave of the AI trend, where I personally think thousands of such projects will die off. This is a process of familiarity and adaptation that we will observe slowly.

Liu Feng: You have a very positive view of Believe's logic and its own positioning. It is more like a practical application launch platform. Currently, all launch assets are Meme-ified, and Believe may see the emergence of a batch of usable applications.

Pima: Hopefully, haha.

Update: Prior to the release of this podcast episode, the Believe team announced that they would suspend the Launchcoin automatic airdrop feature and instead manually review and add a verified label. Once again, we ask Pima to comment on this change. Pima's opinion is: "Generally, the approval system is quite silly; permissionless is the way to go." Clearly, he does not like this change.

Liu Feng: Recently, we have also pulled out and looked at some of the applications and assets that are emerging or being launched on Believe. I have a table in my hand with about fifty or sixty of them. I'm also thinking that if it's just the memefication of this thing, it's already too abstract, but if real applications come out, this might be a different thing. Including the launch platform promoted by Dingaling, its strength lies in the unique token design. However, if it's just the token design, I think it's hard to carve out its own place in the market because Virtuals' token design is already quite extreme.

Meme Coin: The key here is to have someone who can lure developers to your launch platform; this is a crucial aspect.

Trading Volume: The Sole Evaluation Criterion for LaunchPads

Meme Coin: The sole evaluation criterion for a LaunchPad is trading volume, as trading volume represents core revenue. If you don't understand this underlying logic, you won't invest when the pump happens. Now that you see the results, the pump has already made $700 million. So, what is a reasonable valuation for the pump? Under normal logic, a 20x PE valuation of $14 billion is reasonable. Considering the high volatility and the lack of sustainability of Memecoins, a $7 billion valuation at 10x PE or even a $3.5 billion valuation at 5x PE could work. The core issue here is:

What are you really investing in? You are investing in a discounted cash flow of the future. So, when you consider a LaunchPad, it's not about whether the platform is currently at $100 million, $200 million, or $1 billion, but rather whether the platform's revenue can continue to grow sustainably. This logic actually completely applies to stock market investment.

Crypto AI: Outcome-Oriented Investment

Liu Feng: Here, I must disclose something; you've invested in Believe, right?

Meme Coin: Yes.

Liu Feng: This disclosure of information is quite important. The audience can also feel that Meme Coin has invested in this project, which is why he holds this project in high regard. So, from an investment perspective, I think everyone should do their own research and be responsible for themselves. Apart from Memes, do you also look at AI Agents?

Meme Coin: Right now, the entire AI track is basically outcome-oriented, that is, it's oriented towards investment returns. In the Crypto AI field, we feel like all these investments in the infrastructure field seem to be repetitively borrowing AI technology from the internet field. Hence, we feel that it doesn't have a very strong moat and lacks unique features. So, basically, we will all be outcome-oriented, where you can help me with trading or increase my revenue. The combination of AI with social media may have a more profitable turning point.

Liu Feng: It seems like you are not very confident in Crypto AI or a Crypto AI agent?

Pima: On the one hand, I believe that many of their core technologies basically come from the traditional Internet field. On the other hand, they need to find their own business model. Pump, as a representative of the application side's rise, is a very important one. We tend to focus more on the application side's ecosystem. For the application side ecosystem, I first need to know where the paying user base is. Apart from asset issuance and trading, many application-side projects have not succeeded in the end because they cannot achieve positive cash flow. For example, in gaming, can you tell me a game that has achieved stable annual revenues of 300 million or 500 million USD? None.

Liu Feng: In the real-world gaming industry, that is certainly possible, but in Crypto, it seems that such revenue can only be obtained through coin sales.

Pima: Yes, because of the uniqueness of Crypto users, for Crypto games, players would feel like you are asking me to pay, am I hearing correctly? No one spends money on this, but the main business logic of games is spending money. Therefore, in the application field, revenue is still the priority. Where does the revenue come from? The quality of the revenue generated? The sustainability of the revenue generated? These are all points that we are very concerned about, outcome-oriented.

Liu Feng: So, can we say that your current investment logic is very clear, that is, don't talk to me about trends, I want to see real results, the ability to self-generate revenue, and truly have users.

Pima: That's right because the era is advancing, innovation is evolving, the macro interest rate environment is changing, and the logic of globalization is also changing. I think many things cannot remain unchanged.

Optimistic About the Future Development of Crypto

Liu Feng: The crypto space you are talking about doesn't seem to be the crypto space we are familiar with.

Pima: Actually, I feel very optimistic about the future development of the crypto space. Many logics revolve around transactions. If we can better meet the transaction experience of global users, whether it is through launch platforms or DEX, traditional trading platforms, or dog-themed software, these products are both marketable, in demand, and have users. Customers are willing to pay for your product. The United States is slowly legalizing and regulating, and a large amount of money will come to the chain. Stablecoins are now only at $200 billion. In the next two to three years, or three to five years, stablecoins may continue to grow to $1 trillion. At this scale, it will present a 24-hour transaction and operation mode. The transaction track can extend into very large and spacious market spaces, so I am very much looking forward to DeFi on-chain or the form of on-chain Internet finance products.

Furthermore, the core business model of the entire Crypto space is transaction fees. After achieving fee rebates, the enterprise side rebates the company side, and once the company receives the money, it continues to expand its user base in a positive manner, combining the cult-like nature of the Crypto community. It is highly likely to achieve a certain market growth and space in some niche areas that we may not be exposed to. This is actually a very good and effective logic that I have seen in operation. You do not need to maintain cash flow by selling tokens; you just need to encourage more transactions. If you can achieve a daily transaction volume of one billion US dollars, you may earn one million US dollars in revenue. You can then expand your coverage to achieve higher returns.

Of course, there are some issues, such as when it comes to arbitrage, or if the product fails to receive positive information flow apart from transactions, it may collapse. However, this is not important. What is important is that we have seen a very good way to start, which is to use transaction fees to support the early growth of a company, which is also very consistent with the characteristics of Crypto investment.

Liu Feng: You are still so vigorous. Thank you for this recharged faith.

Pima: I just see a possibility.

The Core of Public Chains Lies in Gas Fees and MEV Fees

Jack: Actually, I have a confusion. Just now, it was mentioned that in the future, with the development of stablecoins, more funds may flow onto the chain. However, is it possible that all these on-chain funds will remain in the form of stablecoins, and transactions will also be denominated and anchored by stablecoins? They will no longer use the native assets of the chain, such as ETH or Solana, for profit-generating platforms; they will stay at the application layer such as Pump. The underlying chain seems to still operate on a buy-coin model where it sells or issues coins to nodes, and then the nodes sell them to the market. Consequently, it seems that the underlying token no longer has the self-generating capability of transaction fees. In this way, although there may indeed be a lot of money in this industry, it seems that it does not provide much assistance to the underlying Token.

Pima: The core of public chains lies in Gas fees and the gradually evolving MEV. Gas fees are the costs you need to pay for each action you take. You can think of it as a cost you incur for the bandwidth, storage, or computational resources of a public chain during a certain period. This is a place where you have to pay, and the fact that you have to pay means that this is a very good business model and investment system logic.

A large amount of stablecoins come to the chain, and no matter which chain they access, there will definitely be a demand for liquidity and transaction. Asset on-chain is the on-chain of everything, and Tokenization is a significant trend. Because it has very high transparency and flexibility, as well as a 24/7 characteristic. You need to delve deeper into what exactly is the on-chain Nasdaq? It is about asset issuance and asset trading, which is your source. When you bring in so much capital, you can look at the revenue of Tron. Their revenue is very stable, with Tron maintaining a revenue in the tens of billions due to the demand for stablecoin Gas fees.

Jack: I understand this point, but what we can see as a current trend, for example, looking from Ethereum, in the last cycle, due to the Gas fee and various on-chain innovations, whether it's NFT or DeFi, it indeed drove a significant value capture for it. However, in the process of massive on-chain applications, its Gas fee has become a hindrance to its own expansion, and then it has begun to enter a process of lowering Gas fees. As Gas fees continue to decrease, it is found that despite the increasing on-chain adoption, Gas revenue is decreasing, and eventually it basically cannot sustain its value. This phenomenon can also be seen on Solana.

Hima: What you said is very correct. All blockchain systems are a kind of software that will continue to iterate. If we think from a long-term, ultimate worldview, the marginal cost of Gas fees for all public chains is zero, so how can they make a profit? You can look at Solana's Priority Fee. Solana's base fee accounts for roughly only 1/3, and the majority is tips and priority fees. Why raise tips and priority fees? In fact, this is the most core competitiveness. The future revenue of public chains will depend on tips and MEV. Solana has also differentiated its ecosystem through this. The base fee is only for normal transfers, meaning transfers are one type of fee, and other transactions are another type of fee.

You will find that when you optimize the system around transactions, you can occupy a large amount of profit on the transaction side. The profit from MEV and REV is very significant, and in the future development process, it will definitely far exceed Gas fees. Why do users pay to accelerate? Because they are willing to front-run a block. The transaction market is first come, first served. This is also why the on-chain Nasdaq pursues millisecond block times. Currently, Solana is at 400 milliseconds, which is actually far from enough. I think it might take about 20 milliseconds to compete with the traditional Internet.

In this competitive process of REV or MEV, customers are willing to pay, and this is the core competitiveness. Why are customers willing to pay? Because customers find it profitable. Whoever controls the majority of MEV determines how willing customers are to pay, which will determine a way to discount the enterprise's future core cash flow. Currently, Solana's daily revenue has a large proportion of 80% from tips, priority fees, and MEV fees, which already very clearly explains the situation. We need to find more sustainable, efficient, and higher-quality income.

The moat of a blockchain's development lies in its developers. A public blockchain targets a B2B market, where the success or failure is not determined by the end consumer. How a public blockchain attracts developers is entirely up to them. For me, what's important is this chain's transaction volume, REV, and developers. These are key indicators for me to gauge the growth potential and adaptability of a public chain. At the moment, we try to avoid investing in any public chain projects. The big picture is already set; what's not set is your position. Additionally, there's the network effect, just like why not challenge CATL in the new energy field, because building the ecosystem is a very challenging task.

Liu Feng: Can we consider that in your opinion, the landscape of the public chain world is already fixed, and we shouldn't expect any new chains to successfully rise up?

Pi Ma: ByteDance, a unicorn worth billions of dollars, emerged in China's internet space over the past decade. If in the past decade, VCs or secondary investors hadn't invested in ByteDance, they might as well have stopped, because 55% of the profits have been taken by ByteDance. The Pareto Principle exists in every field. The reason we have expectations for many things is that we are loyal to some past logics. Crypto still has hope; just like the rise of Hyperliquid, I think Hyperliquid has the same goal as Solana, both aiming to become a decentralized Nasdaq, and Monad seems to fit in as well.

The most critical thing is that we have learned to do the math. We have a large number of ETFs coming our way. We are facing more mature investors, and in the future, in one unified account, the friction of trading is getting smaller. Today you can buy NVIDIA, Alibaba, Tencent, and tomorrow you can buy Bitcoin ETF in the same account, whoever you buy will determine who is expensive and who is cheap. The core issue is, why give Solana, Ethereum a PE ratio of 100, 200 times? If after multiple cycles, your revenue performance is below expectations, then the PE ratio must come down. The investment system is becoming more and more mature, but many people have not thought about this issue. The focus should be on core revenue and fundamentals.

There are many people in the world who are willing to think, but now everyone's attention is extremely fragmented and one-sided, so they use some simple, abstract language to express emotions, such as "one shuttle," and so on. This is also a microcosm of social evolution. What is scarce in this world is independent thinking and the ability to discern noise.

Layer 2 Has Greatly Diminished Ethereum's Economic Value

Liu Feng: Actually, my last question was going to be, if you had to choose between Ethereum and Solana, how would you choose? But obviously, that question is no longer necessary. So, can you talk about how Ethereum ultimately made you abandon it? Why? Are Ethereum's developers not good enough?

Horse: I believe the key transition for Ethereum was in 2018 and 2019. When you asked me about a bearish area at that time, I mentioned Layer 2. I said Layer 2 would greatly undermine Ethereum's economic value. I have actually researched the professional terms such as monetary settlement layer, execution layer, but I am not enthusiastic about them because it's best to quantify these things. How much money is settled at the settlement layer? How much can Layer 1 earn in a day? When Layer 2 splits, OK, after all the money is earned by Base and Arbitrum, how much of it is handed over to the central government of Ethereum? Is this revenue-sharing mechanism reasonable? After the local warlords of Layer 2 gain a large amount of economic ownership, will they have other ideas seeking armed independence? Will they seek a more profit-oriented market operation? I think these are the issues that Ethereum did not think clearly about in the past.

I believe that everything can be quantified and explained with certain financial metrics. The gross margin of a public chain is actually very high. To clarify who will earn this money is crucial because if you can't figure it out, you won't know who will foot the bill, which is a very important issue. So, personally, I think Ethereum's shift to Layer 2 is a somewhat misguided approach that does not provide clear feedback to Ethereum; all the money has been taken away by the Layer 2 local warlords.

Epilogue

LF: Finally, for this episode of the podcast, I also want to dedicate it to a very good friend that both Horse and I know. He is Horse's little superfan who left us in the second half of last year, and we all feel very regretful. I think if he were here, he would definitely listen to this episode very attentively, so I want to dedicate it to him and also thank Horse for sharing.

Original Link