Dialogue Match: If I want to invest in Memecoin, how can I make money?

Original Title: "Dialogue with Pi Ma: From MEME Coins to Launch Platforms, the Behavioral Economics Feast and Investment Logic Behind the All-In Culture"
Original Compilation: Deep Tide TechFlow
Original Source: Web3 101

Broadcast Date: May 24, 2025

Podcast Source: Web3 101

【Hosts】

Liu Feng, Partner at BODL Ventures, former Editor-in-Chief of Chain News

Xiong Haojun Jack, Deputy Editor of BlockBeats, Host of "Web3 Nameless Talk"

【Guest】

Pi Ma, Co-founder of Continue Capital

Legendary investor Pi Ma from the cryptocurrency world visits Web3 101 to discuss why he believes Meme will never die and the investment logic behind Meme launch platforms, as well as how the investment themes in the cryptocurrency world have changed completely in this new era.

Cosmos Meme Reflection: The Liquidity Siphon Effect and Matthew Effect

Liu Feng: As an OG, you once had remarkable achievements in the public chain and DeFi fields, but in today's Crypto investment world, OG seems to be a derogatory term. The most impressive story now is about how P junior has become P marshal. What do you think of this trend?

Pi Ma:

I consider myself a relatively senior participant in Memecoins. On one hand, I have been quite involved in Solana during this cycle, participating in all of Solana's Memecoins, including the earliest BONK, WIF, BOME, POP CAT, and later GOAT, as well as many projects that were eliminated through competition.

At that time, we assumed that the revival of Solana Meme would certainly lead to a revival in other public chains, so after laying out BONK in Solana, I looked for similar Memecoins in ecosystems like Cosmos and Avalanche. At that time, this seemed like a very logical approach to me.

However, I overlooked the liquidity siphon effect and the Matthew effect. Once you participate in the first wave, it has already ended. You think there will be a second or third wave, but in fact, it has already completed its historical mission during the initial rebound phase, and the remaining mainstream capital attention will return to the on-chain ecosystems primarily based on Solana.

I have previously shared that Memecoins account for about 1% to 3% of the public chain market value, and in extreme cases, it may reach 5%. I made many observations and statistics and concluded that the top Memecoins account for 1% to 5% of the public chain market value during a certain period. There are a few outlier cases, such as DOGE and SHIB, but I excluded them.

As the cryptocurrency market developed, you would find that Solana was completely incompatible with this system. It had a large number of Memecoins emerging one after another, presenting a completely different atmosphere from other ecosystems.

This is entirely determined by Solana's retail investors. Solana is a market centered around retail investors, which leads to the emergence of many tracks and fields that easily bring emotional, volatile, and highly market-oriented experiences to retail investors. On one hand, I wanted to observe the entire Solana ecosystem, and on the other hand, I was also willing to actively participate in Memecoins, which have liquidity, participation, a broad user base, and are relatively niche.

How to Make Money in the Behavioral Finance Feast of Memecoins?

Liu Feng: If someone wants to invest in Memecoins, how can they make money? This is a particularly blunt question.

Pi Ma:

I have about 90% of my Memecoins on Solana, or even more, and I don't pay attention to any other coins on other chains. This market has already evolved a best solution for you; you are just looking for a second alternative on this best solution.

The core reason for seeking a second alternative is that you did not achieve a result on the best solution, or you did not participate, and you are just looking for that kind of catch-up, which can easily trap people in investment pitfalls. You will find that once you enter, it either does not rise, or it tortures you between rising and falling. Another core issue is that it is difficult to cash out. You will find that when Solana's top Meme pulls back 30%, your 200% profit is already gone, and the pullback is very fast. Therefore, I generally do not pursue final cashing out in any investment system. I personally believe that trying to avoid the first knife of the market turning from bull to bear is a very difficult thing. Crypto operates 7 X 24 hours, and you cannot monitor all market fluctuations in real time, which means that unrealized gains are easy to achieve but hard to cash out.

The role of the leader is that it gives you a second opportunity to reach a high point, allowing you to attempt to realize profits, so basically, just focus on the leader.

Secondly, I believe that when people invest in Memecoins, they often focus on a short and quick approach. However, from my personal experience of achieving significant results, short and quick may not be suitable for medium to large investors unless your size is particularly small.

Short and quick participants are often attracted by short-term attention and do not consider the core operational logic of Memecoins. If you break down Memecoins into horizontal and vertical axes, with the x-axis as time and the y-axis as market value, you will find that the market value of the vast majority of Memecoins is proportional to time. Time is a very important concept; except for a few extreme cases like BOME and TRUMP, all existing Memecoins with a market value of over 1 billion dollars have been operating for more than six months. Without the time factor, many assumptions do not hold.

I think Memecoins are often a feast of behavioral finance.

One of the founders of behavioral finance, Richard Thaler, who is also a Nobel Prize winner, divided the original investment system into two types: one is a savings account, and the other is an entertainment account. The entire Memecoin phenomenon has a strong entertainment account attribute and function. Daniel Kahneman previously wrote a very famous thought, dividing people into two systems: System 1 is the one that requires thinking, emphasizes logic, and is rational, consuming a lot of energy; System 2 is simple, direct, and fast, requiring little energy. Reflecting on the Crypto field, Memecoins perfectly align with System 2, being quick and effective, highly volatile, and satisfying our FOMO emotional and capitalized operations.

Two weeks ago, I came across a paper stating that a person's investment decision-making process may not exceed 6 minutes; now in Memecoins, it can even be as short as 6 seconds. This is very similar to many of our investment decisions. I have made many impulsive investment decisions, and of course, my impulsiveness is because I have already thought through and arranged my foundational Beta or savings account, allowing me to have a lot of time and energy to explore more possibilities in the Alpha market. A very important challenge that behavioral finance poses to traditional finance is that everyone is irrational; what you consider rational is merely living in your own information cocoon. People live in a huge noise environment, and most people lack the ability to discern noise.

In summary, I believe Memecoins represent a significant development in behavioral finance. If we later develop a theoretical system related to behavioral finance, we can completely use some data from Memecoins as research samples.

The Soul's Three Questions: Would You Dare to Buy? If You Buy, Would You Dare to Invest Heavily? Can You Hold On When It Drops?

Liu Feng: From the past few cycles, we learned your meticulous investment logic. Today, we may only look at volatility and whether the social consensus of 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, and the structure of investors, the age of investment, and the income levels of investors are all changing.

I will first state my conclusion: Memecoins will definitely continue to develop, and this is not limited to Crypto. In my view, the Crypto field is not a separate market; it is completely related to and synchronized with world development. Those who have missed the era's dividends, a large number of unemployed people, those eliminated by globalization, and those who are directionless and lack investment opportunities due to class solidification, they use a rebellious psychology to refuse to cast a large number of votes for those elite personas. Whether it is the tariffs in the United States, the rise of new nationalism in Europe, or the rise of right-wing conservatism in Australia, there is a wave of new nationalism occurring globally. This trend is reflected in real life, condensed into slogans like "All in" and "One bet," and this trend is not limited to the Crypto field but is global.

I believe the rise of nationalism has injected significant power into the Memecoin market and other niche and speculative markets. This power will cause a huge impact on traditional financial markets with the development of AI and peer-to-peer internet information technology.

You pay attention to P junior because he brings a lot of chips and results, which is the most impactful, communicative, and eye-catching. I personally avoid sharing operational charts, but many other Twitter users will use it to gain huge exposure. On the other hand, we now emphasize information equality. Human attention is very limited; when your attention is heavily focused on P junior, you will definitely not conduct in-depth research on theoretical systems. The core question returns to the old three: Would you dare to buy? If you buy, would you dare to invest heavily? Can you hold on when it drops?

Many times, you only achieve results but do not gain the decision-making thought process behind those results. So even if you know the results, you still won't buy, won't dare to buy, won't invest heavily, and won't hold on.

With the arrival of a lonely society, for niche tracks, selling demand is more attractive than selling products. What is demand in the Crypto field? It is a sense of psychological recognition. Users holding Memecoins form a small group and community, bringing strong psychological recognition, and this extremely recognized community will only self-reinforce. Unfortunately, Pump has already launched over a million Memecoins, but only a handful have survived. This state of excessive participation yet failing to achieve results creates a very rebellious situation: Seeing others achieve great results can greatly stimulate oneself, leading to more diligence, making further mistakes in wrong choices, which then affects one's mindset, making it difficult to focus on analysis and summary, thus failing to achieve results, creating a very vicious cycle.

Memecoins are 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 by 100 times, may not bring particularly significant results. So what is your purpose in frequently participating in small and medium-sized Memes?

Pi Ma:

This is a measure of market participation. I need to participate in the most liquid market with the most retail investors. When I discuss Memecoins, I am not saying that Memecoins can bring me what kind of results. For our investment, I may be more focused on the infrastructure of Memecoins, such as DEX, LaunchPad, etc. These are completely different systems; you can understand it as left hand Beta, right hand Alpha. For me, only after my Beta work is very solid do 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 use very subtle observations to sense the flow of global capital markets. All Memecoins may go to zero, but for us, there is not much significant loss. However, the market trends of Memecoins are reflected and correlated with other investment markets, but most people do not feel this. We need to consider the allocation of global capital; these targets only serve my core Beta choices, so participation in Memecoins is just to validate some logic, allowing us to make more reasonable assessments of some core targets in Beta.

Liu Feng: I actually understand your logic. Previously, you shared the Meme investment logic. Why do you only want to achieve real gains from large-cap Memes? This is related to your size and is completely different from the logic many people have of changing their fate through investing in Memes. Retail investors may only want to talk about Alpha, but for you, Beta is more important.

This era is actually the era of Memecoins; Meme has become the voice of the times. We should not deny it but should accept it.

In this case, we can look at Beta and see if the Meme launch platforms that have undergone several generations of evolution can introduce some that you find appealing and worth researching.

Pi Ma:

The most eye-catching is still Pump.fun (hereinafter referred to as Pump). In fact, they haven't innovated much, but the core business model of Crypto is transaction fees. The more market share you can capture from this business model, the more cash flow you have, and the higher your valuation can be. Pump meets the needs of asset issuance, and this product integrates the huge demand for Memecoins, so both sides will hit it off, with an endless supply and an infinite pursuit of extremely high multiples from retail investors, which is why you see asset issuance platforms springing up like mushrooms after rain.

Retail consumers in the Crypto field are a highly financialized group, with a strong risk awareness and a high impulse for speculation. You need to design products targeting this impulse. Where do retail investors spend money? Only on transaction fees. They would rather pay you higher fees in hopes of hitting Memecoins. They are not fools; why would they pay such high MEV priority fees? Because they believe the returns can cover the costs.

We position Crypto retail investors as a group of extremely financialized individuals. All our products must revolve around their needs, which is one of the important factors for Pump.fun's success. The later AI project Virtuals is also a LaunchPad. Both satisfy the strong demand for asset issuance, so we observe that launch platforms are a very good investment target. Memecoins can die a thousand or ten thousand times, but there will still be a continuous emergence of Memecoins. However, a good launch platform can solidify your funds, allow for profits, and truly enable you to win passively while capturing the maximum value in the trend or wave of Memecoins.

Launch Platforms and Public Chains: Attracting Developers is Key

Jack: For example, Virtuals has now come to Solana. Do you think it is too late? Is there only one chance?

Pi Ma:

For all launch platforms, you need to understand their supply and demand. Who acts as the supplier for the launch platform? This is a very important factor. The suppliers for Pump are many anonymous entities, while Virtuals has some selection but is also anonymous. Therefore, when evaluating any launch platform, you should closely monitor its revenue.

My evaluation system for launch platforms is exactly the same as for DEX. In fact, in another sense, launch platforms are somewhat similar to public chains; it's just that people haven't elevated the two to the same level.

As a launch platform, the core capability lies in how to attract developers. This is exactly the same logic as public chains. Why would developers go to A instead of B? This is a very worthwhile question to think deeply about, as it is the most important issue determining the future direction of launch platforms and public chains.

Because the service experience end is occupied by a large number of retail investors, we usually consider launch platforms and public chains to be a to-C market. However, in my view, they are a to-B market. If there are no good assets and no good developers entering, your public chain/launch platform will never succeed.

The most important thing for public chains and launch platforms is future cash flow income, which relies on continuous trading volume, and trading volume depends on a constantly enriched variety of assets. Therefore, how to attract excellent developers to your launch platform is the core issue. It is actually very easy to conquer retail investors; as long as there are good assets, retail investors will come.

Of course, whether it is a public chain or a launch platform, it often tests some marketing methods and strategies. However, without the injection of high-quality assets, it is difficult for a launch platform or public chain to sustain itself.

Believe's Unique Market Positioning

Pi Ma:

I think Believe's market entry strategy is correct. APP developers have a huge demand for financing, but they hardly ever get financing. Believe's supply side consists of independent developers who develop a large number of APPs each year and hope to achieve positive cash flow from their APPs, but they lack suitable channels for monetization and financing. If the market is niche, it cannot achieve a valuation of billions or hundreds of billions.

Believe focuses on this group of independent developers or those who want to try new fields and directions. Crypto retail investors have a very high risk awareness and tolerance, and the most crucial point is that its market value is very low, which has created the possibility of achieving hundredfold or thousandfold returns. Believe directly borrows some experiences from other launch platforms, sharing costs with these developers, which is very good, achieving positive cash flow for independent developers in the cold start phase.

In traditional fields, developing an APP requires a lot of people for development, marketing, and other tasks. However, in Crypto, it is just about making a product. Whether this product can succeed is not important, but once it launches successfully, it can generate hundreds of thousands of dollars in cash flow within a week, which is a considerable income for independent developers. Once they have this positive cash flow, they can continue to refine their products, expand their markets, and serve their users.

This also explains why this model is called the internet capital market; it meets the strong demand for financing difficulties faced by many small developers and micro-enterprises, releasing the supply side. Moreover, with the arrival of AI, independent developers can achieve very good annual revenues on their own, and their promotional operations can completely rely on TikTok and Twitter for viral dissemination.

But do you think there is a possibility that Believe will produce very large and very good enterprises? I actually have no confidence in this; I take an observational attitude. However, I firmly believe that Believe has very well addressed a niche market, serving a small scope, a specific group, and very targeted customers. They earn money from this part, meaning they do not need to grow large, but they have their market.

Another point that impressed me about Believe is their careful planning and packaging. Their page design is quite meticulous, and they also focus on launching some projects and activities. They attempt to tell a story. Besides the Crypto field, they can also connect with other market niche groups. These traditional internet developers are not familiar with crypto, and this process will definitely be similar to the first wave of the AI market. I personally think that thousands of such projects will die; this is a process of familiarity and adaptation, and we will observe it gradually.

Liu Feng: You are very supportive of Believe's logic and its positioning; it is more like a practical application launch platform. Now all launch assets are Meme-ified, and Believe may produce a batch of usable applications.

Pi Ma:

Hopefully, haha.

Update: Before this podcast episode was released, the Believe team announced that they would suspend the automatic issuance of Launchcoin and instead implement manual review and add verified labels. We again asked Pi Ma to comment on this change. Pi Ma's view is: "Review systems are generally quite foolish; permissionless is the way to go." Clearly, he does not like this change.

Liu Feng: We have recently pulled out some applications emerging on Believe or some assets that are being launched. I should have a list of about fifty or sixty. I am also thinking that if this is just a Meme-ified thing, it is already too abstract for this event. However, if there are really usable applications, it might be a different thing. Including platforms like Dingaling that are being promoted, their advantage lies in the unique token design. However, with only token design, I think it is very difficult to occupy a position in the market because Virtuals' token design is already quite extreme.

Pi Ma:

The key is to have people; how to attract developers to your launch platform is a very critical issue.

Trading Volume: The Only Evaluation Standard for Launch Platforms

Pi Ma:

The only standard for evaluating LaunchPads is trading volume, as trading volume represents core revenue. If you cannot clarify this underlying logic, you will not invest when Pump comes out.

Now you see the results; Pump has already earned 700 million dollars. What is a reasonable valuation for Pump? Under normal logic, a valuation of 14 billion dollars at a 20x PE is reasonable. If considering the high volatility and that Memecoins are not sustainable, a valuation of 7 billion dollars at a 10x PE is also acceptable, or even 3.5 billion dollars at a 5x PE. The core of this question is:

What exactly is the investment? It is an investment in the discounting of future cash flows.

So when you consider LaunchPads, it is not about whether this platform is currently worth 100 million, 200 million, or 1 billion, but whether the platform's revenue can continue to expand in the future. This is actually completely applicable to stock market investment logic.

Crypto AI: Investment Returns-Oriented

Liu Feng: Here, I must ask you to disclose that you have invested in Believe, right?

Pi Ma: Yes.

Liu Feng: This disclosure of information is quite important. Listeners may feel that Pi Ma has invested in this project, so he holds it in high regard. Therefore, if viewed as an investment, I think everyone still needs to do their own research and be responsible for themselves.

Besides Meme, are you also looking at AI Agents?

Pi Ma:

Currently, the entire AI track is basically results-oriented, focusing on investment returns.

In the Crypto AI field, we feel that all investments in these infrastructure areas seem to be repeating the borrowing of some AI technologies from the internet field. Therefore, we believe it does not have a particularly deep moat and lacks its unique characteristics. Thus, we generally focus on results, meaning you can help me with trading or increasing my revenue. The combination of AI and social media may have more profit explosion points.

Liu Feng: It sounds like you are not very confident in Crypto AI or Crypto's AI agents?

Pi Ma:

On one hand, I believe that many of their core technologies basically come from traditional internet fields. On the other hand, they need to find their own business model. Pump, as a representative of the application side's rise, is very important. We tend to look at more application-side ecosystems.

For application-side ecosystems, I first need to know where the paying user base is. Besides asset issuance and trading, many application-side projects ultimately do not succeed because they cannot achieve positive cash flow. For example, in gaming, can you tell me of a game that has achieved stable annual revenues of 300 million or 500 million dollars? There are none.

Liu Feng: In the real world of gaming, this is certainly possible, but in Crypto, it clearly can only rely on selling tokens to achieve such revenue.

Pi Ma:

Yes, because of the uniqueness of Crypto users, players will think, "You want me to pay? Am I hearing this right?" No one is willing to spend money, but the main business logic of games is to spend money.

Therefore, in the application field, revenue is still the main focus. Where does revenue come from? What is the quality of the revenue generated? What is the sustainability of the revenue generated? These are all points we pay close attention to, focusing on results.

Liu Feng: So it can be said that your current investment logic is very clear: don't tell me about trends and grand visions; what I want is for you to truly deliver results, to be self-sustaining, and to have real users.

Pi Ma:

Exactly, because the times are evolving, innovation is also evolving, the macro interest rate environment is changing, and the logic of globalization is also changing. I believe many things cannot remain unchanged.

Optimistic About the Future Development of Crypto

Liu Feng: What you describe about the crypto world seems to be quite different from the crypto world we are familiar with.

Pi Ma:

In fact, I believe I am very optimistic about the future development of the crypto world.

Many logics revolve around trading. If we can better meet the trading experience of global users, whether it is launch platforms, DEX, traditional exchanges, or trading software, these products are market-oriented, in demand, and have users willing to pay for them.

The U.S. legislation is gradually becoming legal and compliant, and a large amount of money will flow onto the chain. Stablecoins are currently only 200 billion dollars; in the next two to three years or three to five years, stablecoins may continue to grow to 1 trillion dollars. At this scale, it will present a 24-hour trading and operation model. The trading track can extend a particularly large and significant market space, so I am very much looking forward to on-chain DeFi or on-chain internet financial products.

Moreover, the core business model of the entire Crypto field is transaction fees. After realizing the replenishment of transaction fees, the enterprise side replenishes the company side, and after the company receives money, it continues to expand its user base positively. Combined with the religious nature of the Crypto community, it is very likely to achieve certain market growth and space in some niche areas that we cannot reach.

What I see is a very good and effective operational logic: you do not need to rely on selling tokens to maintain cash flow; you only need to encourage more trading. If you can achieve an average daily trading volume of 100 million dollars, you can earn about 1 million dollars, and you can completely expand your coverage to achieve higher returns.

Of course, there are some issues, such as once it reaches arbitrage or the product does not obtain positive information flow beyond trading, it may collapse. However, this is not important; what matters is that we see a very good way to kickstart growth, which is to use transaction fees to support the initial growth of enterprises. This also aligns very well with the characteristics of Crypto investment.

Liu Feng: You remain so spirited. Thank you for this segment of faith recharge.

Pi Ma:

I just see a possibility.

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

Jack: Actually, I have another confusion. Earlier, you mentioned that in the future, with the development of stablecoins, more funds will flow onto the chain. However, is it possible that all these funds flowing onto the chain will remain in stablecoin status, and transactions will also be priced and anchored in stablecoins? It won't use the native assets of the chain, such as ETH or Solana, for profit. The platforms profiting will just remain at the application layer of Pump, while the underlying chain seems to be stuck in a model of selling tokens, selling them to nodes, and then nodes selling them to the market. The underlying token seems to lack the ability to generate self-sustaining fees. In this case, although there may indeed be a lot of money in this industry, it seems to provide little help to the underlying tokens.

Pi Ma:

The core of public chains lies in Gas fees and the gradually developing MEV.

Gas fees are the costs you need to pay for every action you take. You can understand it as a cost expenditure for bandwidth storage or computing resources on a public chain over a period of time. This is a place you must pay for, and having to pay means it is a very good business model and investment system logic.

A large number of stablecoins coming onto the chain will create liquidity demand and trading demand, regardless of which chain they connect to. Asset tokenization is a significant trend. Because it has very high transparency and flexibility, as well as 24-hour uninterrupted features. You need to understand more deeply what on-chain Nasdaq is: it is about issuing and trading assets, which is your source.

When so much capital comes in, you can look at the revenue of Tron; their revenue is very stable. Tron maintains a revenue of hundreds of billions because it has stablecoin Gas fee demand.

Jack: I understand this point. However, the current trend, for example, from Ethereum's perspective, is that in the last cycle, due to Gas fees and various on-chain innovations, whether it is NFTs or DeFi, it indeed pushed its value capture significantly. However, during this process of many applications going on-chain, its Gas fees have become an obstacle to its own expansion, and it has begun to enter a process of reducing Gas fees. As Gas fees continue to decrease, it is found that although on-chain adoption has increased, Gas revenue has decreased, and in the end, it can hardly rely on this to maintain its own value. Similar phenomena can also be seen on Solana.

Pi Ma:

You are absolutely right. All blockchain systems are a type of software, and software will continue to iterate. If you think from a long-term and ultimate perspective, the marginal cost of Gas fees for all public chains will be zero. So how will they profit?

You can look at the priority fees on Solana; the basic fees on Solana account for about one-third, while most of the rest are tips and priority fees. Why raise tips and priority fees? This is actually the most competitive core. In the future, public chain revenue will rely on tips and MEV to determine profitability. Solana has also differentiated its ecosystem through this; basic fees are just for ordinary transfers, meaning that transfers incur one type of fee, while other transactions incur another type of fee.

You will find that when you optimize the system around transactions, you can capture a large amount of profit at the transaction end. The profits from MEV and REV are substantial, and in future developments, they will certainly far exceed Gas fees. Why do users pay for acceleration? Because they want to grab a block. The trading market operates on a first-come, first-served basis, which is also the reason for the pursuit of millisecond block speeds in on-chain Nasdaq. Currently, Solana's speed is 400 milliseconds, which is far from enough. I think it may need to reach around 20 milliseconds to compete with traditional internet speeds.

In this competition for REV or MEV, customers are willing to pay, which is the core competitiveness. Why are customers willing to pay? Because they feel it is profitable. Whoever occupies the majority of MEV will make customers more willing to pay, which determines the future core cash flow discounting method for enterprises.

Currently, 80% of Solana's daily revenue comes from tips, priority fees, and MEV fees, which is very telling. We need to seek more sustainable, efficient, and high-quality revenue.

The moat of a chain's development lies in its developers. Public chains are a B2B market; the C-end does not determine their success or failure. How public chains attract developers is up to their own capabilities. For me, the important indicators for assessing the growth potential and future plasticity of a public chain are its trading volume, REV, and developers.

We are currently trying not to invest in any public chain projects; the big picture is already set. What is not set is your position. Additionally, there is the network effect. For example, why not challenge CATL in the new energy sector? Because building an ecosystem is a very difficult task.

Liu Feng: Can we say that in your view, the landscape of the public chain world is already fixed, and we should not expect any new public chains to succeed?

Pi Ma:

In the past decade, the Chinese internet has given birth to ByteDance, a billion-dollar giant. If venture capital or secondary markets did not invest in ByteDance over the past decade, there is basically no need to continue. Because 55% of the profits have been taken by ByteDance. The 80/20 rule exists in every field. The reason we have expectations for many things is that we are loyal to some of the logics of the past.

Crypto still has hope, just like Hyperliquid is rising. I believe Hyperliquid has the same goal as Solana, aiming to become a decentralized Nasdaq. Monad can also be counted.

The most crucial point is that we have learned to count. We have a large number of ETFs coming, and we are facing more mature investors. In the future, in a unified account, trading friction will become smaller and smaller. Today, you can buy Nvidia, Alibaba, Tencent, and tomorrow you can buy Bitcoin ETFs in the same account. Who you buy determines who is expensive and who is cheap.

The core question is, why give Solana or Ethereum 100 or 200 times PE? If after multiple cycles your revenue performance does not meet expectations, then the PE must drop. The investment system is becoming more mature, but many people have not thought about this issue. The focus should be on core revenue and core fundamentals.

There are many people in this world willing to think; however, currently, everyone's attention is extremely fragmented and one-sided, so they express emotions using some simple, abstract language, such as "one bet," etc. This is also a reflection of social evolution. What is scarce in this world is the ability to think independently and discern noise.

Layer 2 Has Greatly Weakened Ethereum's Economic Value

Liu Feng: My last question was originally going to ask you to choose between Ethereum and Solana. But clearly, this question no longer needs to be asked.

So, can you tell me how Ethereum made you abandon it? Why? Are Ethereum's developers not capable?

Pi Ma:

I believe Ethereum's core transformation occurred in 2018 and 2019. When you asked me about a bearish area, I mentioned Layer 2, which will greatly weaken Ethereum's economic value.

I have actually studied the so-called professional terms like currency settlement layer and execution layer, but I am not interested in them because these things are best quantified. How much money has the settlement layer settled? How much can Layer 1 earn in a day? Once Layer 2 splits, okay, all the money goes to Base and Arbitrum; how much of it is handed over to the central government, Ethereum? Is this revenue-sharing method reasonable? Once Layer 2 local lords obtain a large amount of economic ownership, will they seek armed independence? Will they seek more profitable market operations? I think these are all questions that Ethereum did not consider clearly in the past.

I believe everything can be quantified and explained with certain financial indicators. The gross profit margin of public chains is actually very high. It is crucial to clarify who earns this money; if you cannot figure this out, you will not know who will pay the bill, which is a very important issue.

Therefore, I personally believe that Ethereum's move to Layer 2 is a relatively wrong approach, as it has not provided good returns to Ethereum; all the money has been taken by Layer 2 local lords.

Conclusion

Liu Feng: Finally, I would like to dedicate this episode of the podcast to a very good friend known to both me and Pi Ma. He is a fan of Pi Ma and left us in the second half of last year, which we all regret deeply.

I think if he were here, he would definitely listen to this podcast very seriously, so I want to dedicate it to him, and thank Pi Ma for sharing.