Over the past year, I have written numerous articles. Taking advantage of some free time today, I decided to consolidate these scattered writings into a summary of market developments and strategies for navigating them. This will also serve as my pinned post on CT for the foreseeable future.

First, I want to highlight the two core indicators I focused on during this cycle:

The first is reach rate, referred to in English as “Attention.” I see this indicator as the equivalent of the “Narrative” in the previous cycle. Due to changes in market structure, the VC/TVL-driven expectations and initial market-making pricing mechanisms that VCs relied on have become ineffective. Pricing battles have returned to the simplest game of buy-side demand. Therefore, every project must think about how to reach more communities, engage more retail investors, and convert them into buyers. (https://x.com/YeruiZhang/status/1871584614005055927).

At the beginning of this bull market, I introduced the concepts of “overt strategies” and “covert strategies” (https://x.com/YeruiZhang/status/1858385385354829857).

In a long-form article written in early November, I started by defining these concepts and used Cheems as an example to illustrate the fundamental methods for gaining attention and improving reach. Recently, Kaito’s Yap has exemplified this logic perfectly, especially with how they’ve transformed the content discovery model on CT (https://x.com/YeruiZhang/status/1870215059135516982).

The second indicator is the quality and speed of ecosystem asset issuance. At the start of the year, I mentioned that ecosystems need assets to coalesce communities (https://x.com/YeruiZhang/status/1836570243109654649). ETH relied on Eigen at the beginning of the year and DeFi by the year’s end. Base recently leaned on Virtual, while the overarching theme for SOL throughout the year has been MEME.

In the crypto space, the best community model resembles a cult. In 2021, all public chains and DeFi33 systems used token price appreciation and community self-brainwashing to identify their core users, then expanded outward. Most projects that can be evaluated using PS/PE metrics lack the potential to reach $10 billion. In crypto, any mathematical problem that can be solved with a pen has a ceiling.The reason public chains persist is that you never know when a new belief-driven community or breakout ecosystem might emerge.

In the crypto space, assets are king. Whoever can incubate more high-quality assets faster will dominate market discussions. From a public chain perspective, if ETH represents long-form content, then SOL is like short videos. While the former may have substantial value, in the age of high traffic, no one can issue assets faster than the TikTok model. The more assets you issue, the greater your user reach, and the closer you get to success (https://x.com/YeruiZhang/status/1859242022949077176).

We’ve already discussed the solutions for VC coins earlier. I believe the key areas of focus moving forward are twofold:

1. Currently, the only entity capable of generating market influence is A16Z. The reason is simple: they genuinely have substantial capital. A16Z represents massive funding and exaggerated valuations. With capital comes the expectation of price rallies, and with high valuations comes market attention. Therefore, aside from A16Z-backed projects (and notably, not their CSX incubator projects!), all other projects should focus on the following: how to build a community, how to harness community power through social farming to pitch exchanges, and how the project performs after launch (whether it shares benefits with the community and acts as the final stabilizer). These three aspects require extensive communication channels with the community and effective engagement with new communities. Many new projects will emerge, but if they fail to reach new users effectively, the experience for buyers will inevitably be poor.

2. Focus on projects that successfully engage with communities and can quickly and efficiently establish an asset issuance system. These projects should aggressively calculate opportunities, as in the early stages of ecosystem issuance, project teams release significant resources to attract and consolidate community support. Simply put, this is the PVE phase. Seize this opportunity and make profits before too many others start calculating the same.

Having discussed VC coins, let’s move on to the hottest trend of this cycle: MEME. My foundational logic is that MEME is no longer just MEME:

1. MEME, as it stands today, is no longer a fleeting phenomenon. It represents a return to fundamental methods of asset issuance and community bootstrapping, aligning with the core essence of crypto (https://x.com/YeruiZhang/status/1859242022949077176).

2. MEME has evolved into a new model for asset launches. While the assets themselves may continuously iterate, the essence of crypto is to issue more assets, explore innovative angles, and speculate on assets that defy traditional valuation. From this perspective, MEME is unlikely to fade away.

3. The MEME ecosystem has entered the next phase of coordinated operations. Whether it’s AI16Z, Virtual, or Bio’s http://Dao.Fun, these leading players have progressed from isolated applications to infrastructure, marking the emergence of a new generation of Infra.

First, let me talk about my change in mindset. I used to be skeptical of MEME and Pumpfun (https://x.com/YeruiZhang/status/1790970764486721934), but just a few months later, I was proven wrong. I spent some time summarizing my thoughts, and I believe MEME’s development path looks like this. It may not be entirely accurate, so I welcome corrections.

1. The earliest MEMEs were issued within their ecosystems. Going back to late 2023, the first examples, such as Bonk, were tied to the SOL phone, and Silly Dragon was closely connected to a Christmas theme. These were foundation-driven prototypes, akin to the early days of ETH DeFi in 2017.

2. The second wave came from core ecosystem developers. At the end of 2023, as SOL’s native token price soared and top-tier DeFi and other value ecosystems surged, the community began searching for new assets. Early SOL-focused developers started issuing MEMEs, including Wif and others. This phase was developer-led, resembling ETH DeFi’s growth in 2018-2019.

3. The first MEME cycle occurred around February to March, during which MEMEs saw broad gains led by PEPE. In the SOL ecosystem, WIF quickly climbed to a $3 billion valuation, raising the ecosystem’s ceiling. This was followed by standout “speedrun” projects like Bome and Slerf, which locked external degen funds firmly into SOL’s ecosystem. This first explosion mirrored the DeFi Summer phenomenon.

4. Pumpfun played a critical role by standardizing issuance tools, setting a framework. Initially, it popularized assets themed around cats and dogs, such as Michi. Around the U.S. election period, it cleverly tapped into political trends, mass-producing a series of assets valued at $10-100M. Pnut emerged as a representative success. This influx of varied assets brought significant attention, motivating developers to issue new assets, creating a positive feedback loop in the ecosystem. Pumpfun drove the second major explosion, comparable to ETH DeFi’s growth in early 2021.

5. SOL Foundation transitioned from political MEMEs and began incubating AI-related projects starting in October. Subsequent projects emerged in TikTok and DeSci tracks. The AI track, in particular, stood out with examples like Goat and Ai16Z. Gradually, MEME transformed from being just an asset into a method of issuance. It became a representation of open-source, permissionless assets that seamlessly connect with external audiences. Pumpfun wasn’t just issuing MEMEs; it tokenized AI research results and open-source projects, elevating MEME to a new form of permissionless asset. This evolution mirrors the leap from the DeFi 2.0 craze in 2021 to the scale of an ICO-level phenomenon.

When MEME reached stage 5, the creativity within the market was unlocked to an unprecedented degree, as it freed a group of previously marginalized developers—those who weren’t part of the mainstream power structure. In the past two years, in a VC-dominated ecosystem, these developers struggled to secure VC funding due to a lack of resources and connections, and thus remained largely unnoticed. However, amidst the waves of large assets, these “wild” developers were quicker to adapt and seize the opportunities. For example, Virtual was the first to capitalize on the AI Agent story and, benefiting from its accumulation on the Base chain, quickly became the leading ecosystem on Base (https://x.com/yeruizhang/status/1849866452679131413). Similarly, Base was also an undervalued chain within the VC framework. It lacked its own token, and its stakeholders couldn’t hold assets. Moreover, compared to the enormous incentives provided by OP and ARB, Base couldn’t even offer a single cent in grants, leading it to only absorb projects that others overlooked. However, it was precisely this chain—unnoticed by traditional logic—combined with developers considered unremarkable, and Base’s strong retail base, that allowed Virtual to achieve its success.

MEME may not always be a fair distribution, as there will be conspiratorial groups and dominant players, but the MEME model, much like ICOs, offers the community and retail investors a chance to collide with the existing profit structure. This is the core reason why people are willing to engage with MEME.

I don’t believe the MEME ecosystem has plateaued. I think in the next three to six months, their valuation structures could rival that of public chains. On one hand, they have already gained significant momentum, each with their own method for reaching more users, such as AIXBT for Virtual and Shawm’s CT for AI16Z. Additionally, they are able to attract a large number of teams who were once underachieving in crypto but have the capabilities and understanding to build within these ecosystems. Through these ecosystems, MEMEs can be launched with just the right creative ideas and market insights. Isn’t this akin to setting up the Infra tech stack and waiting for developers to arrive—the “iPhone moment”? In my view, mass adoption is already here.

How to participate?

1. For players with more capital but less time, I believe that the dynamics within these MEME ecosystems will closely resemble those of public chain ecosystems. While previously, metrics like TVL were used to measure success, now more emphasis is placed on factors like volume and mindshare—more abstract indicators. This is where tools like Kaito’s Yap become very valuable.

2. For players with more time but smaller capital, if one believes that opportunities on-chain will continue, it’s crucial to participate in early-stage opportunities, try to understand the narratives, and follow the flow of smart money. I am particularly optimistic about GMGN as a next-gen on-chain exchange. It combines icons, smart money monitoring, and rapid execution of trades, making it an excellent tool for catching trends.

With that said, I have some additional thoughts that I can’t guarantee are 100% correct, but they are worth considering.

1. In today’s saturated Infra space, only three types of VC projects can survive: one is the type that guides mainstream market narratives, like Polymarket; another is the type that provides services to existing on-chain ecosystems, like Pump Fun; and the last is the type that can bring users from outside the crypto space into crypto. The scenarios and PMF (Product-Market Fit) of the second and third types will be extremely important. Projects that solely focus on creating narratives will have a much harder time surviving.

2. MEME as a launch model is designed to attract market attention through an explosive initial release, as more incentives can be distributed. However, since token price plays a crucial role in early sentiment, if operations are not carefully managed, it could lead to a total loss, which is why it is so difficult for a MEME at the 30M level to surge to 100M. In contrast, VC-backed projects can rely on liquidity to set prices and just need to secure orders from exchanges. The difference between these two is significant: the former faces challenges initially but can ease later, while the latter has it easier at first but faces difficulties down the line.

3. More wild developers will join the fray in the future, and it may even attract key figures from open-source Web2 communities. After all, who doesn’t want to make quick money? Additionally, more technical projects will likely launch in MEME form, possibly incorporating VC funding after achieving initial success.

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