YeruiZhang

Yesterday, I had dinner with @woodycryptow. He said something that I thought was quite accurate, but I don't remember the exact words. The gist was:

"Many situations that seem intricate are actually just a few fools making stupid mistakes in fields they aren't good at, piled on top of each other."

Many things in the crypto world are only understood by those who know the background; it's not that complicated...

Stablecoin Overtaking

The narrative of fully collateralized stablecoins has never been a rare thing in the crypto space. In 2023-2024, due to Tether's exceptionally high U.S. Treasury income, a batch of stablecoin projects were launched, all with glamorous backgrounds, compliance, strong backing, and top-notch teams. However, even strong contenders like PayPal's stablecoin have struggled to gain traction. Most projects have top-tier concepts, narratives, and funding, but once launched, no one buys them. After the passage of the Genesis Act, I believe more stablecoin projects with golden spoons will emerge, as every internet company wants to issue its own currency, but given the current trend, it is difficult to challenge Tether and Circle's positions.

Why is this the case?

Any currency's most crucial needs are usage (yield) scenarios and distribution channels. USDT, on one hand, came into the market early, and on the other hand, found demand from the black and gray markets under sufficiently decentralized circumstances, thereby expanding its business coverage; Circle, on the other hand, has firmly grasped compliance and continuously incentivized usage scenarios with real money. The problem with PayPal USD is that it has not found good yield scenarios in SOL (expected to provide treasury rates by summer 2025) and has not been fully integrated into PayPal's system, making it unable to incentivize actual distribution channels or TVL. From the perspective of usage scenarios in the crypto space, if this type of stablecoin is inserted into the existing DeFi puzzle, it cannot challenge USDT and USDC in terms of ecological niche because all the gaps are filled.

So where is the opportunity for overtaking?

I believe it lies in the deep binding with public chains. The ones with the most money in the crypto space are public chains, and they are also the ones most eager for transaction transfers (they can collect taxes), making them potential backers for these stablecoins. The likelihood of Solana's official providing incentives for PayPal USD is low, but the possibility of other chains offering some coins to initiate mining activities is relatively high, which would resolve the usage (yield) scenario. As for distribution channels, this is a problem that this combination solves together; ideally, the chain itself should have a strong enough background to bring along some channels and traffic. Additionally, the stablecoin issuer's channels can help find customers in real-world payments and cross-border transfers.

From this perspective, there are not many public chains that meet this standard. First, they need to have a strong enough background and be willing to spend money; they also need to have a strong linkage with large companies' compliant stablecoin projects:

1. Kaia, a product of the merger of national-level apps Kakao and Line in the crypto space, carries the last hope of the Korean public chain and is preparing to issue its own stablecoin soon. Given the popularity of Crypto in the East Asian world, it can help promote the narrative of Korean won stablecoin payments. Additionally, with a relatively complete DeFi infrastructure on Kaia, employing a money-splashing strategy to acquire users can lead to faster stablecoin adoption, resulting in a spiral rise for both the stablecoin and the public chain, eventually impacting stocks.

2. Aptos, situated within the Meta ecosystem, is all in on the U.S. compared to Sui's focus on the Middle East. As a high-performance public chain, if the Meta ecosystem chooses to issue a stablecoin, Aptos will definitely be among the options. Moreover, Aptos has been incentivizing mining activities on the chain recently, showing a strong commitment to pushing this initiative.

As more stablecoins emerge in the future, some will choose to issue on ETH and SOL, taking the traditional DeFi route. However, I believe there will be stablecoin projects that choose to collaborate with medium-sized public chains, where the public chain provides TVL incentives for stablecoins, and stablecoins provide the necessary transactions and asset accumulation for the public chain, ultimately achieving a win-win situation.

It is recommended that all friends who think @Christianeth and the Infini team have a big vision buy a 100U Cheems, after all, big players with vision won't easily dump their holdings.

APT has recently found what it is suitable for… As a legitimate descendant of Meta and a blue-blooded aristocrat, showcasing the political influence to perfect the stablecoin narrative while finding a batch of Web2 companies to create usage scenarios for stablecoins is the most effective approach. This will also serve as the most useful pricing anchor for the upcoming period. Similarly, the comparable targets should be things like Trx and Xrp…

Let them engage in the Web3 ecosystem; this is like asking someone skilled in embroidery to cut meat, it doesn’t match at all.

Different media outlets' reporting tone on the same event can roughly reveal which company has bought the annual frame...

Planet Daily: CZ: I and my associated entities have not participated in this round of financing for Nano Labs.

Rhythm: CZ: Nano Labs has become a publicly traded company that only holds BNB as a strategic reserve, providing substantial support.

The same content, but the guidance generated by the title is completely different; this is the art of media~

This should be one of the top three bizarre projects in my VC career:

The team had a runway of no more than 3 months before going live, and after going live, they continued to sell OTC; I've never seen anyone play with the chain, only pure manipulation. To this day, it still has over 1 billion, never having dropped below its initial price, and investors have long started unlocking, only a matter of how much they earn.

The last time I saw such a magical project was probably INJ...

Did not buy, not a recommendation, NFA

When everyone is posting their trades, it will reverse. The deeper reason is that when one-way positions become crowded and profits are made, it will trigger ADL. When this happens frequently, the counterparty is no longer the user but......... Playing with a casino, how can the win rate be high...

The ceasefire is just an opportunity, but the reasons for the rebound of altcoins are not limited to this～

Currently, there are only three types of people making money in the market:

1. Using high leverage to trade BES contracts, small funds opening positions over 1M, large funds opening positions over 10M, capturing 2-5% fluctuations, winning leads to withdrawals while losing requires recharging.

2. Using low leverage to short a basket of altcoins, older coins over 1B, new coins over 500M, increasing positions with ADL, and closing positions with profit.

3. Various versions of market makers, high-frequency market making on mainstream coin contract order books, meme market making, and market making for new coin openings.

This weekend's roadside report:

1. The recent crash of currencies is mostly related to the strange holding structure of contracts + insufficient spot liquidity + large sell-offs in a short period of time. Project parties? Market makers? Who is the puppet master is Schrödinger's puzzle. But for most projects that want to work again after hours, it will be difficult; otherwise, the outcome will be clear within three days, or it will be a lifelong issue.

2. Binance Alpha is crazily sending offers to projects, and there will be more strange entities coming up next. Additionally, a new form of IDO will emerge, running parallel with the old forms. This model mainly focuses on small-cap projects, capturing market share from lower-tier exchanges.

3. Now, top projects want to skip Alpha and go directly to spot and contracts to have more pricing space. This will be the focus of the upcoming coin listing game and will also present potential arbitrage opportunities.

The general situation is that Koge and ZKJ together created a large pool for everyone to trade. Koge suddenly switched to ZKJ without any warning, causing Koge to plummet, and then ZKJ was crashed to U, leading to a significant drop in ZKJ... Koge's large holders became the only winners.

Additionally, what's even more interesting is that this wave 'coincidentally' caused massive long positions on Bybit to be liquidated, which amounted to 100M. The counterparties of this long position made a fortune; who is that unlucky guy? And who is that lucky one...

It is known that Brother Sun invested 2-3% of WLFI in 1.5B. If WLFI really reaches 1U, then Brother Sun will make a profit of 2-3 billion US dollars... it only takes six months from early November last year to now.

Do you think Brother Sun will share it with you?

After 21 years of Dydx opening at its peak, many "executives" from exchanges in 21-22 said their VC coins would benchmark against Dydx and aim to take it down, but in the end, what came out was Gmx...

In this wave, a bunch of "well-connected" on-chain Dexs claim they want to surpass Hyperliquid, so the question arises, what kind of strange and unique things will come out?

To be honest, having institutional backing and big brother support in the Perp Dex space is relatively useless. Hyperliquid's contemporaries, Drift and Aevo, are backed by top investors and major firms, and the later Paradex is supported by market makers and a large network of Pro traders. Those who should clock out still need to clock out.

Running a Perp Dex is a business that requires a lot of skill points; if you don't have a solid foundation, everything else is in vain. Liquidity, market depth, user experience, etc. — not a single one can be lacking. Having experienced the current popular ones, it seems they are still far from meeting expectations.

Not to mention mainstream coins, the liquidity of altcoins has already hit rock bottom...

1. Setting aside the new lows in trading volume for market makers, there are no buy or sell orders on the order book, so prices naturally decline slowly.

2. Good news is not being absorbed, the buying orders on the exchange only last for thirty seconds with bots, and once new coins are listed, they start to decline.

Regardless of whether it's rising or falling, the cycles for altcoin markets have shortened significantly; if you can't catch it, it's time to clock out...

If a project has a KOL round with TGE unlock and also conducts a Mindshare airdrop with Kaito, then there are only two possibilities:

1. The airdrop basically all goes to work
2. The opening price of the coin goes to work

If this project is also looking for channels to spend money on exchanges everywhere, then the project party definitely wants to be the fastest one to run away...

My guess is that the ban is related to issues like copyright... for example, AI16Z infringing on A16Z... and possibly Labubu's token infringing on Labubu, and someone has filed a lawsuit or something... and then everyone tweeting about it gets implicated as well.

It definitely isn't Gmgn and KOL participating in money laundering, that's too far-fetched.

Let's talk about a few directions that look promising and those that do not for the second half of the year～

1. Promising prediction markets, AI oracles + permissionless predictive products = a new form of AI-driven casino, matching the needs of gamblers and money launderers.
2. Promising the Moand ecosystem, where the top founders taking the wildest paths can actually break the deadlock.
3. Promising the new version of the economic model, which is more complex and random, e.g., more airdrop allocations paired with task unlocks.
4. Promising permissionless, stable DeFi/RWA yield layers.

1. Not optimistic about meme coins backed by market makers, they are all crashing one after another.
2. Not optimistic about reinventing the wheel in ways that do not align with the fundamental conditions of the chain, such as doing RWA on BSC or Dex on Sui.
3. Not optimistic about AI workflows and Multi AI in Crypto, the situation changes too quickly to keep up, taking one step ahead does not guarantee success, and it demands too much from team capabilities.

Finally, the quality requirements for projects have decreased; as long as it looks passable, the corresponding shell premium is also decreasing, and the demands on project creators' pockets are higher. With the elimination of market makers creating opening prices, retail investors flocking in, perhaps everyone is truly competing on whose product is used, establishing a reasonable connection between the product and the token～

Let’s discuss a few promising and unpromising directions for the second half of the year～

1. Promising forecast markets, AI oracles + permissionless forecasting products = a new form of AI-driven casino, matching gamblers and money laundering needs.
2. Promising the Moand ecosystem, where the top founders taking the wildest paths can break the deadlock.
3. Promising new versions of economic models, more complex and more random, e.g., more airdrop allocations paired with task unlocks.
4. Promising permissionless, stable DeFi/RWA yield layers.

1. Not optimistic about meme coins backed by market makers; they disappear faster than you can clock out.
2. Not optimistic about reinventing the wheel in ways that don’t align with the chain's fundamentals, such as creating RWA on BSC or Dex on Sui.
3. Not optimistic about AI workflows and Multi AI in crypto; the pace of change is too fast to keep up, taking one step doesn’t guarantee success, and the demands on team capabilities are too high.

Finally, the quality requirements for projects have lowered; as long as they pass muster, that’s enough. However, the expectations for project teams' financial backing are higher. Without market makers creating opening prices, retail investors flocking in, perhaps we are truly competing on whose product is actually used, and there is a reasonable connection between products and tokens～

The roadside news continues to broadcast

1. Last night's HPV drama was just the tip of the iceberg; there are quite a few in the crypto space with issues down below, including some well-known figures, but thankfully, I haven't heard of anyone having AIDS. Besides that, smoking marijuana is quite common; those who understand, understand.

2. Recently, a new batch of projects has come out with secondary 'pump' rounds, offering a 30% discount on the current TWAP, with a lock-up period of about 6 months. The project parties are gradually realizing that doing KOL rounds is not as effective as getting VCs to buy directly.

Occasionally writing some abstract things I heard from the roadside society～

1. Market Maker A accidentally created two impressive BSC memes, and Market Maker B, envious, created a copycat project, combining the two mechanisms that caused a hit. However, Market Maker B’s projects always have a very high opening price, and their strategy is to release good news and then sell off before quitting. The result is that everyone knows there is good news, but when it comes out, it’s likely just a race to see who can run faster compared to the operator.

2. Market Maker C has several shells of Binance, but the money on hand isn’t enough to maintain every project, so every time a new project is launched, it means an abrupt end for the old projects.

Sahara is a project with great potential. Initially, they were called QuestLab, born around the end of 2022 or early 2023. As the name suggests, the project was originally focused on decentralized data labeling Quest task mechanisms and a decentralized Workflow system. Back then, the valuation was very low, the team had a concept, comparable projects (many similar companies in Web2), and a solid team (Sean is arguably one of the most academically capable and influential young professors in the Crypto startup scene). Thus, they secured funding from Polychain, Samsung, and a number of Asian Web2 VCs.

Then, in early 2024, the narrative of Crypto AI gained traction, leading to the emergence of many big players, including Sahara, Sentient, Ora, Myshell, and others, all of which were very popular at that year’s ETH Denver (Denver is basically the annual trendsetter for the VC circle). At this point, the project split into two factions: one was focused on building large models on-chain, utilizing cryptographic technology and matching AI programming primitives. The other side was about applications, doing whatever was trending in Web2 and just adding a token incentive mechanism. Sahara happened to stand in the middle; on one hand, the value of data labeling in the AI era was fully recognized, and on the other hand, Professor Sean and his team's AI capabilities were still quite strong, able to construct a system to run AI on-chain, needing to launch a chain specifically for AI use. Thus, Sahara's second round valuation soared, with institutions continuously participating, ultimately achieving a threefold oversubscription.

After that, there was the much-anticipated star endorsement and the testnet whitelist phase. There’s not much to say about this part; it was just a competition, and then we fast-forward to this public offering.

The public offering price is 600 million, and the bullish points are quite simple.

1. Binance's favored child in AI-type projects, the last deeply supported AI project by Binance, Vana, opened at 3.5 billion, and now it’s still over 700 million, so it’s definitely profitable.
2. The Crypto AI track is the last major area where VCs are pouring in money; after this, VCs won’t have the funds or similar market opportunities to support another such track. Sahara is also the first major valuation debut in this wave of Crypto AI projects in 2024; if it performs poorly, the projects behind it will likely have to shut down, so while this could incur losses, they shouldn’t be too significant.
3. The narrative of Layer1 Infra never dies in the crypto space; as long as it doesn't launch too poorly, there will definitely be people betting this could be the next Tia, and if the price is right, there will still be secondary market buyers.

There’s no need to elaborate on the fundamentals of the project; I believe in the current market environment, everyone is too busy to research what it actually does, so the most direct way to pitch it is:

A top-tier Crypto AI project comparable to Wld within the Binance ecosystem, just go for it and you’ll profit.