Embrace the market, embrace the community, let opportunities happen fairly on-chain
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Embrace the market, embrace the community, let opportunities happen fairly on-chain
Humans do not learn from history; they merely repeat it endlessly.
Navigating Web3 tides with focused insightsAuthor: Yuyue
This article was initially written on December 15, 2023. At that time, I hadn't fully organized my thoughts yet, so it was only shared and circulated among a few friends.
Now two months have passed, and some of the views expressed in this article have already been validated by investment returns and actual market performance. During the consensus phase, I've observed many VC friends expressing confusion about related memes. Many people understand memes; many understand what VCs do—but probably very few are like me, who deeply understand both memes and the VC world. So I’ve briefly revised and updated this piece for public sharing. Some logic threads in the article are still not entirely clear, but I hope to find like-minded individuals for further discussion and mutual growth.
Introduction: Humanity never learns from history—it only repeats it endlessly.
This is a long read, suitable for degens, institutional practitioners, and anyone interested in the meme asset boom driven by AI Agents and their related infrastructure projects. It explores reflections on industry paradigms and outlooks for the AI + crypto space.
1. On-Chain Narrative Shift Brought by AI Agents and Related Infrastructure Projects
Currently, successful AI Agent and related infrastructure projects resemble the types of VC coins that mainstream market voices used to oppose. In practice, successful investors—though operating as secondary market participants—are actually applying primary market thinking when investing in projects. Judging by outcomes, adopting this mindset and behavior pattern leads to higher win rates and greater probability of success when buying tokens related to AI Agents and AI Frameworks.
VC coins aren’t necessarily broken; rather, compared to memes, high-valuation assets like these present the following issues for secondary market investors:
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Severe information asymmetry and cost disadvantages, often resulting in cost gaps of several or even dozens of times;
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Some project teams, due to compliance reasons, do not actively conduct market-making (e.g., pumping or supporting prices), leading to continuous selling pressure from low-cost unlocked tokens in the secondary market. This results in persistent downtrends with no real secondary market opportunities.
Therefore, classifying by token distribution structure, VC coin opportunities only exist under two conditions—assuming solid narratives and established credibility within the ecosystem:
1. Fully circulating older tokens, such as $S, which is the new chain token replacing the original $FTM;
2. New tokens without unlock schedules, such as $IP, $BERA, and $KAITO—all classic examples of new token rallies.
Returning to the meme asset frenzy triggered by AI Agents and related infrastructure projects—memes represent an asset innovation, a fundraising mechanism, and the new era's ICO.
Clearly, such assets offer the following advantages for the largest liquidity pools and participants in the market (i.e., secondary market investors):
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Information symmetry and cost advantages: retail and secondary market investors can access on-chain data and gain fair, low-cost access to early-stage tokens;
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Tokens are fully liquid from day one, and market makers, KOLs, and other roles actively participate. Since there are no compliance constraints on-chain, certain active market makers have participation opportunities.
2. Key Reasons Behind the Shift in Market话语权
Token ownership and distribution dynamics constitute a major reason behind this shift in market话语权. In VC-backed projects, most VCs lack the ability to help build communities around projects, and many cannot meaningfully consume or justify their allocated "sell-side" allocations. As a result, in most cases, those holding low-cost tokens become pure sellers post-TGE, unable to contribute significantly to the project’s development. The team clearly plays the most critical role throughout the lifecycle of a project. All other participants, in the ideal scenario, should engage in (3,3) cooperation—growing the project together until larger liquidity is introduced, transforming PVP dynamics into PVE.
Regarding institutional approaches to project selection, let me cite a successful case study: Pi Ma @LeePima once tweeted: “We almost never participate in anonymous projects, especially those requiring technical advancement (though MEMEs are fine). We’re also happy to see teams allocate 5–20% of tokens to themselves (if you don’t take any, I’d actually feel uneasy).”
—In other words, Pi Ma primarily invests in teams he considers legitimate and identifiable, with a likely emphasis on technical capability—essentially whether the team is genuinely building. This represents a potentially healthy equilibrium where project teams raising funds via on-chain assets hold significant flexibility, contrasting with the rigid structures typical of traditional VC projects. Here, investors also gain greater flexibility, creating a relative balance. For degen players, this perspective differs markedly from our previous approach to pure memes.
From my own project evaluation standpoint, I assess four key aspects:
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Narrative: Dream valuation comes first—it must be evaluated;
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Token structure: Is there a whale/pump group? What’s the proportion held by quant entities?
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Community or sentiment: How many people are discussing it? How many groups are talking about it? How strong is the internal community consensus?
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Product & technology: Team background, technical strength—specifically GitHub metrics, academic credentials;
I briefly touched upon this during my interview space with @okxchinese and @Mercy_okx. Here I provide a more detailed and systematic expansion:
https://x.com/i/spaces/1mrGmMrYnWdGy
The mindset we previously applied to pure memes, in my view, followed this hierarchy:
Narrative > Token Structure ≈ Community or Sentiment > Product Technology
How did this ranking emerge?
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Narrative is paramount;
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In purely emotional meme markets, token structure largely dictates price action. Most price movements are manipulated by project teams or insiders, and price performance directly influences community and market sentiment—making these two factors roughly equivalent;
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Product and technology are least important. Technical depth isn’t required. Team background often serves merely as a "perspective" to support consensus formation—or even celebrity attention can serve as endorsement.
Conversely, when approaching projects from a primary-market, product-and-team-oriented perspective, the ranking becomes:
Narrative > Product Technology ≈ Token Structure > Community or Sentiment
Why does this new order emerge?
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Narrative remains paramount—this is unquestionable;
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The importance of product and technology rises sharply. Without rapid, tangible product delivery, market expectations quickly erode and attention rapidly shifts to newer projects. This creates intense competition ("rolling")—placing higher demands on team capabilities, requiring industrialized delivery speeds, leaving no room for professors or PhDs to spend years refining papers;
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Regarding token structure: if both narrative and technology are compelling, current institutional capital at both primary and secondary levels can acquire desired positions within the $10–50M range. However, projects with controlled supply still hold significant advantages—one of the greatest strengths of unregulated on-chain projects.
How does this narrative shift occur? Fundamentally, it stems from changes in audience and funding sources—the market话语权 gradually migrates toward directions more broadly understandable by wider audiences.
I categorize memes into two types:
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Type 1: Memes I previously described—and personally excel at—those potentially understandable by outsiders, possessing cultural consensus;
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Type 2: Memes favored by larger-capital institutions like VCs—those based on technical consensus.
A bit of context: since VCs are profit-driven organizations, their investments are ultimately accountable to LPs. Most fund managers couldn’t previously justify meme purchases to their LPs—until LPs noticed how疯狂 the meme markets had become, prompting them to push their funds to buy in. This may partly explain the catalyst behind this year’s meme surge.
So why has market话语权 shifted? Because when the dominant narrative turns toward technological innovation like AI, it inherently aligns with the second type mentioned above. Thus, mainstream market interest has migrated—from Type 1 toward Type 2. Of course, I believe these two narrative forms will continue rotating cyclically.话语权 won’t permanently reside with either side—this too is determined by humanity’s biological craving for novelty.
Then, what impact does this narrative transformation and shift in话语权 bring? That leads to my third and fourth sections: Changes and Implications.
3. What Industry Changes Has This Brought—Are They Positive?
I believe this shift could bring positive changes to the industry. Earlier, @cz_binance said memes are getting weird—well, what about playing ones with actual products? :)
This year’s trend explains why many VC coins listed on CEXs have poor reputations in communities. The reason is simple: consensus was artificially enforced through VC and exchange endorsements, with no opportunity for retail participation. When exchanges endorse a project, its price often falls continuously, triggering loud community backlash. This also reflects the declining credibility of large-KOL VCs. Gradually, community-driven KOLs receive stronger positive feedback from the market. Hence, fairly launched memes that offer participation opportunities are highly celebrated. This act itself constitutes a fundraising model—one demanding stricter control over asset-side execution and higher standards for market validation.
For startup teams, today’s meme—or on-chain fork launch—format offers alternative funding, immediate market feedback, rapid validation of market acceptance, and enables lightweight scaling.
Moreover, because the market now demands higher team competence—building for consumers (ToC) is far harder than pitching to VCs (ToVC)—delivery must be industrialized. This exposes fraudulent teams: those who raised funds years ago, did nothing, and simply forked others’ projects (some even raised large sums and got listed, dumping endlessly into deep liquidity pools).
In this way, the market self-corrects, naturally selecting out teams capable of consistent product delivery.
—Now imagine: if a meme (or on-chain fork) project and an unbonded project are essentially doing the same thing, and the former’s semi-primary on-chain market cap is ~$100M while the latter’s primary market valuation is $500M—wouldn’t it be more cost-effective and faster for a VC to directly purchase the former’s tokens or conduct OTC deals with the team? a16z is clearly a pioneer participating in both cultural and technical memes—first to eat the crab.
I think everyone already knows the answer.
Optimistically speaking, this shift in fundraising models forces all market participants to rethink their assumptions and compels VCs to redefine their investment frameworks. There are already signs of this trend: VCs and professionals who better understand meme-based asset issuance are achieving superior returns. Crucially, many logics of on-chain projects closely mirror those of primary markets—and their return patterns are similarly aligned:
—Half of 100 survive, half die, breaking even overall; alpha returns come from home runs.
4. Lessons for Primary Market Investing (Including On-Chain)
Finally, the initial logic of meme investing—buying at low market caps—was always quite similar to early-stage investing. What does this evolution mean for investors?
If a meme can rapidly attract believers, evangelists, and long-term community contributors from inception—such as KOLs, Laser Cat @BitCloutCat, Wizard @0xcryptowizard, and other long-term missionaries or super nodes—then its floor value won’t be too low.
In today’s tech-driven market, investors should ideally confirm during early low-cap stages that the team can actually deliver products—this is precisely where traditional VC investors traditionally excel. That said, in terms of reaction speed, degens still possess powerful advantages: fast response, no committee approvals, relentless work ethic, and sleepless dedication.
To summarize:
1 - Degens without professional experience should learn to think like institutional players, enhancing systematic thinking. Conducting structured research and analysis on new projects will improve your PnL;
2 - Institutional investors with experience need faster reactions—identifying projects capable of rapid iteration and understanding both markets and assets. Just as startups face intense competition, so do VCs. Failure to quickly identify quality projects leads to higher entry costs, lower returns, and weakened competitiveness;
3 - After ICOs, IDOs, and other fundraising formats, the latest emergence in crypto markets is meme-based fundraising. We must respect market realities and objective developmental laws, embracing narrative shifts—this brings positive change to the industry;
4 - Narratives between cultural-consensus memes and technical memes will likely continue cycling (for example, $SPX previously saw a strong rally);
5 - LONG ONCHAIN
Respect the market, respect the community; embrace the market, embrace the community; let opportunities unfold fairly on-chain.
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