Source: Web3 101 Podcast
Compiled by: DeepTech TechFlow

Air 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"

Guests:

· Pima, Continue Capital Co-Founder

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, being an OG feels like an insult. Now, the most impressive story is how a junior P evolved into a marshal P. What is your take on this trend?

Pima: I consider myself a seasoned participant in Memecoins. On one hand, during this cycle, I was more involved in Solana. I participated in all of Solana's Memecoins, including the earliest ones like BONK, WIF, BOME, POP CAT, and later ones like GOAT, as well as numerous projects that underwent natural selection. At that time, we naively believed that if Solana's Memecoins had a revival, other public chains would also experience a similar revival. So, after laying out BONK on Solana, we sought out similar Memecoins in ecosystems like Cosmos and Avalanche, which, in my view at the time, seemed to be a seamless logic.

However, I overlooked the liquidity siphon effect and the Matthew effect. Once you get involved in the first wave, it's essentially over. You might think there's a second wave or a third wave, but in reality, after an initial rebound phase, it has fulfilled its historical mission, and the remaining mainstream attention and funds will flow back to the on-chain ecosystems like Solana at that time. I previously shared that Memecoins typically represent about 1% to 3% of the public chain's market value, potentially up to 5% in extreme cases. I conducted a lot of observations and research at that time and concluded that the top Memecoins typically represent 1% to 5% of the on-chain market value during a certain period. There are a few outstanding cases in this range, such as DOGE and SHIB, but I excluded them.

Later, as the crypto industry evolved, you would notice that Solana didn't fit into this system at all. It saw a surge of Memecoins, presenting a completely different atmosphere from other ecosystems. This was entirely driven by Solana's retail investors. Solana is a market centered around retail investors, leading to the birth of many emotionally charged, volatile, and highly marketized tracks and domains within the Solana ecosystem. On one hand, I was observing the entire Solana ecosystem, and on the other hand, considering Memecoins, which have existing liquidity, participation, a broad user base, and are a relatively non-mainstream track, I was also willing to actively participate.

How to Make Money in the Memecoin Behavioral Finance Feast?

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

Pima: Basically, 90% of my Memecoin is on Solana, even higher, without paying attention to any other coins on any other chains. This market has evolved to offer you an optimal solution, and you are just looking for a second option on this optimal solution.

The core reason for looking for a second option is that you did not get a result on the optimal solution, or you did not participate at all. You are just looking for that pump, which can easily trap you in an investment trap. You will find that once you enter, it either does not pump or it tortures you between pumps and dumps. Another core issue is that it is difficult to take profits. You will find that when Solana's leading Meme coin retraces by 30%, your 200% profit is gone, and the retracement is very rapid. So, in any investment system, I basically do not pursue the ultimate take-profit. I personally think that trying to avoid the first cut of the entire market from bull to bear is a very difficult thing. Crypto is 24/7, and you cannot monitor all market fluctuations in real time, which means paper profits are easy but realizing them is hard. The role of the leader is that it can allow you a second chance to ride the wave, to give you an attempt to take profits, so basically just focus on the leader.

Secondly, I believe that when everyone is investing in Memecoin, many times they focus on a get-rich-quick mentality. Actually, from my personal experience of getting significant results, the get-rich-quick approach may not be suitable for medium to large investors, unless your investment amount is very small. Participants in get-rich-quick schemes are often only attracted by short-term attention and have not considered the core operating logic of Memecoin. If you break down Memecoin into the x-axis and y-axis, with x as time and y as market cap, you will find that the market cap of the vast majority of Memecoins is directly proportional to time. Time is a very important concept, and except for very few extreme cases like BOME and TRUMP, all current Memecoins with a market cap of over $1 billion have been operating for at least six months, and many assumptions do not hold without the element of time.

I think Memecoin is often a feast of behavioral finance. One of the founders of behavioral finance, Richard Thaler, also a Nobel laureate, divided the original investment system into two types: a savings account and a entertainment account. The entire Memecoin has a strong entertainment attribute and function. Daniel Kahneman previously wrote a very famous reflection. He basically divided people into two systems: System 1, which needs to think, is logical, rational, and consumes a lot of energy; System 2, which is simple, direct, fast, and does not require much energy. Reflected in the Crypto field, Memecoin is perfectly compatible with System 2, fast, effective, highly volatile, satisfying some of our emotional FOMO and capitalization operations.

In the first two weeks, I came across a paper stating that a person's investment decision process may not exceed 6 minutes, and now with Memecoin, it could be as short as 6 seconds. This resembles many of our investment decisions. Personally, many of my investment decisions are quite impulsive. However, my impulsiveness stems from having already carefully arranged my fundamental Beta or savings account, allowing me ample time and energy to explore more possibilities in the Alpha market. A significant challenge that Behavioral Finance poses to traditional finance is that everyone is irrational. What you perceive as rationality only exists within your own information cocoon. People live amidst significant noise, with most lacking the ability to discern this noise.

Overall, I believe Memecoin represents a significant development in Behavioral Finance. If there are further developments in Behavioral Finance theory in the future, some data from Memecoin could actually be taken as research samples.

Three Questions to the Soul: Are you brave enough to buy? Will you dare to go all in after buying? Can you hold on during a dip?

Liufeng: Looking back at the past few cycles, we used to study your rigorous investment logic. Today, perhaps we only look at volatility and whether Meme's social consensus can quickly attract liquidity. Do you think this situation can continue?

Pima: Many investments are challenging because the times are changing. The structure of investors, the age group of investors, and the income levels of investors are all changing.

First, let me deliver a conclusion: Memecoin will definitely continue to develop, not just in the Crypto world. In my system, the Crypto field is not a standalone market; it is entirely related and synchronized with global development. Those who have missed the dividend of the times, those who are experiencing significant unemployment, those who have been eliminated by globalization, and those who have been ossified into a specific social class without direction and investment opportunities are all driven by a kind of reverse psychology. They refuse to allocate a large number of votes to those elite personas, whether it's the U.S. tariff issue, the rise of new nationalism in Europe, or the rise of right-wing conservatism in Australia. A global new nationalism wave is unfolding. The reflection of this trend in real life is condensed into slogans like "All in" and "YOLO." This trend is not just limited to the Crypto field; it is global.

I believe that the rise of nationalism has injected a tremendous amount of power into the Memecoin market and other niche markets, speculative markets, which, along with the development of AI and peer-to-peer internet information technology, will have a significant impact on traditional financial markets. You pay attention to P Junior not because he brings a large amount of chips and results, but because he is the most impactful, viral, and eye-catching. I personally avoid sharing practical charts, but many other Twitter users take advantage of them to gain enormous exposure. On the other hand, we now emphasize information equity. Human attention is very limited. When a significant portion of your attention is focused on P Junior, you certainly will not delve deep into the theoretical framework. The core issue reverts back to the same three questions: Are you brave enough to buy? If you buy, are you brave enough to go all in? And when it dips, can you hold on?

Many times, you only get the results without getting the decision-making thought process behind the results, so even if you know the results, you still wouldn't buy, dare to buy, go all-in, or hold onto it.

With the advent of a lonely society, for niche tracks, selling the demand is more attractive than selling the product. What is demand in the Crypto field? It is the sense of psychological identity, where users holding Memecoins form a small group and community, creating a strong sense of psychological identity. This highly identified community will only self-reinforce. Unfortunately, over 1 million Memecoins have already been pumped, but only a few have survived. This over-participation and lack of results will lead to a very rebellious situation: seeing others achieve good results will stimulate oneself greatly, leading to working harder, making further mistakes in choices, affecting mindset even more, unable to focus on analyzing and summarizing, resulting in poor outcomes, creating 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: Even if many Memes flip 100x, it may not bring about significantly large results. So, what is your purpose in frequently participating in mid and small-cap Memes?

Horse: This is a market participation thermometer. I need to participate in the market with the most liquidity and the most retail investors. When I discuss Memecoins, I am not talking about what kind of results Memecoins can bring me. For our investment, I may be more interested in Memecoin infrastructure, such as DEX, LaunchPads, etc. This is a completely different system. You can understand it as Beta on the left hand, Alpha on the right hand. For me, after my Beta work is already very solid, 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 flow of global capital with very subtle observations. All Memecoins have reset to zero, so there is no significant loss for us. But each Memecoin rally is mapped and related to other investment markets, although most people don’t feel it. We need to consider the allocation of global capital. These assets only serve my core Beta choices, so participation in Memecoins is only to validate some logic, allowing us to more reasonably assess some core targets of Beta.

Liufeng: 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, which is completely different from many people's logic of changing their destiny through Meme investment. Retail investors may only want to talk about Alpha, but for you, Beta is more important. This era is actually the era of Memecoins, where Meme is already the voice of the era. We should not deny it but accept it. In this case, we can look at Beta and explore the well-evolved Meme launch platforms. Could you introduce which ones catch your eye and are still worth researching?

Pima: The most eye-catching one is Pump.fun (referred to as Pump below). In fact, they don't have much innovation, 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 I can give you a valuation based on that. Pump meets the need for asset issuance. This product integrates into the huge demand for Memecoins, and the two sides will hit it off. With countless supplies and infinite intangible pursuits of retail investors at ultra-high multiples, you will see asset issuance platforms spring up like mushrooms after rain.

Retail consumers in the Crypto field are a highly financialized group, highly risk-aware, and have a strong gambling impulse. You need to design a product tailored to this impulse. Where do retail investors spend money? Only on transaction fees. They would rather pay you more fees in the vain hope of hitting a Memecoin. They are not fools. Why do they pay such high MEV priority fees? Because they believe the returns can cover the cost.

Our positioning of Crypto retail investors is a group of highly financialized individuals. We launch all products around their needs. This is one of the key factors in Pump.fun's success, including later ventures like AI's Virtuals, also a LaunchPad. Both equally satisfy the strong demand for asset issuance. Therefore, observing such launch platforms is a very good investment target. Memecoins may die a thousand or even ten thousand times, but there will always be successive Memecoins rising. However, a good launch platform can solidify your funds, ensure profits, truly enable passive gains, and capture the maximum value during the entire Memecoin trend or movement.

Launch Platforms and Public Chains: Attracting developers is key

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

Horse: For all launch platforms, you need to understand their supply and demand. Who is the supply side as a launch platform? This is a very important factor. The supply side of Pump is mostly anonymous, Virtuals has some degree of selection, but of course, it is also anonymous. So when you look at the pros and cons of any launch platform, you should pay close attention to revenue. For launch platforms, my evaluation system is identical to DEX, and in another sense, launch platforms are somewhat similar to public chains, but everyone has not elevated the two to the same level.

As a launch platform, the core ability lies in how to attract developers, which is exactly the same as the logic of public chains. Why would developers go to A instead of B? This is something worth thinking deeply about, which is the most important question determining the future direction of launch platforms and public chains. Because the experiential end of the service is dominated by a large number of retail investors, we usually consider launch platforms, including public chains, as a to C market. But actually, in my opinion, they are a to B market. Without good assets and without good developers entering, your public chain/launch platform will never take off.

For public chains and launch platforms, the most important thing is future cash flow income, which relies on continuous transaction volume, and transaction volume relies on a rich variety of assets. Therefore, how to attract excellent developers to your launch platform is the most crucial. Capturing retail investors is actually very easy, as long as there are good assets, retail investors will come running. Of course, whether it's a public chain or a launch platform, many times it also tests some marketing strategies and methods, but without the injection of high-quality assets, the launch platform or public chain will find it hard to sustain.

Believe's Unique Market Positioning

Horse: I think Believe's market entry strategy is correct. App developers have a significant need for funding, but they hardly receive any. Believe's supply side consists of independent developers who develop a large number of apps every year, hoping to achieve positive cash flow from the apps but lack the right channel to monetize and fund the apps. If the market is niche, achieving a market cap of billions or hundreds of billions is impossible.

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, and most importantly, the market cap is very low, which has long realized the possibility of achieving hundreds or thousands of times returns. Believe directly draws on the experience of other launch platforms, that is, fee sharing with these developers, which is very good. It has achieved positive cash flow for independent developers from the cold start phase. In traditional fields, developing an app requires a lot of people to do a lot of work including development, marketing, and more. But in the crypto world, they only produce a product. The success of this product is not important, but once it is successfully launched, they can receive hundreds of thousands of dollars in cash flow in just one week, which is a very substantial income for independent developers. Once they have this kind of positive cash flow, they can continue to refine the product, expand the market, and serve users.

This actually also explains why this model is called the Internet Capital Market. It satisfies the strong demand for financing from a large number of small developers and micro-enterprises, unleashing the supply side. Furthermore, in line with the trend, with the advent of AI, a single independent developer can achieve very good annual recurring revenue on their own. Your marketing can rely entirely on TikTok, Twitter for viral spread. But do you think that very large, very good companies could emerge on the Believe platform? I actually have no confidence in this. I take an observational attitude towards this, but what I firmly believe is that Believe has very effectively addressed the niche market. This niche market caters to a small scale, a specific group of people, and a very targeted customer base. They make money from this segment, meaning they don't need to scale up, but they have their market.

Additionally, what impressed me about Believe is their careful planning and packaging. Their website design is quite meticulous. Furthermore, they have focused on launching some projects and events, attempting to tell a story. Apart from the Crypto field, they can also collaborate with other niche market audiences. These traditional internet developers are not familiar with crypto. This process will surely be similar to the first wave of the AI boom, where I personally think thousands of such projects will die off. It's a process of familiarization and adaptation. Let's observe slowly.

Liu Feng: You highly appreciate Believe's logic and its positioning as more of a practical application launch platform. Now all asset launches 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 will pause the Launchcoin automatic airdrop feature, and instead opt for manual review and add a verified tag. Once again, we ask Pima to comment on this change. Pima's view is: "Auditing systems are generally quite silly; permissionless is the way to go." Clearly, he does not like this change.

Liu Feng: Recently, we've also been looking at some of the applications emerging on Believe, or some of the assets being launched. I have a list in my hand, probably around fifty or sixty. I'm also thinking, if it's just about Meme-ifying this thing, it's already too abstract an event, but if real applications emerge, maybe this will be something different. Including launch platforms promoted by Dingaling, its advantage lies in the unique token design. But with just token design, I find it hard to establish its position in the market, as Virtuals' token design is already quite extreme.

Whale: The key here is to have someone who can attract developers to your launchpad; this is a crucial aspect.

Trading Volume: The Sole Evaluation Criterion for Launchpads

Whale: The sole criterion for evaluating 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. You can see the result now: the pump has already made $700 million. So, what is a reasonable valuation for the pump? Using normal logic, a $14 billion valuation at 20 times PE is reasonable. If you consider the high volatility and the lack of longevity of Memecoins, a $7 billion valuation at 10 times PE is also acceptable. Even a $3.5 billion valuation at 5 times PE is possible. The key question here is:

What are you really investing in? You are investing in a discounted cash flow for the future. So, when you consider a Launchpad, it's not about whether the platform is currently at $1 billion, $2 billion, or $10 billion; it's about whether the platform's revenue can continue to expand sustainably in the future. This is actually a direct application of stock market investment logic.

Crypto AI: Outcome-Oriented Investment

Liu Feng: Here, I have to ask you to disclose, do you believe you have invested in it, right?

Whale: Yes.

Liu Feng: This disclosure of information is quite important. The audience may also feel that Whale 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?

Whale: Now, the entire AI track is basically outcome-oriented, meaning it is investment return-oriented. Regarding the Crypto AI field, we feel that all these investments in the infrastructure field seem to be replicating some AI technologies from the Internet field. Therefore, we believe it doesn't have a very strong moat and lacks unique features. So, basically, we are all outcome-oriented, meaning you can help me with trading or increasing my revenue. The combination of AI and social media may have a more lucrative tipping point.

Liu Feng: It sounds like you are not very confident in Crypto AI or an AI agent for Crypto?

Pi Ma: On the one hand, I believe that many of their core technologies are basically derived from the traditional Internet field. On the other hand, to find their own business model, Pump, as a representative of the application side, is a very important one. We tend to look at more of the application side's ecosystem. In the application-side ecosystem, first and foremost, I need to know where the paying user base is. Apart from asset issuance and trading, many application-side projects ultimately have not succeeded because they cannot achieve positive cash flow. For example, in gaming, can you tell me a gaming platform that has achieved a stable annual revenue of 300 million or 500 million US dollars? None.

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

Pi Ma: Yes, because of the uniqueness of Crypto users, for Crypto games, players will feel like you are asking me to pay, am I hearing correctly? No one does in-app purchases, but the main business logic of games is in-app purchases. Therefore, revenue is still the primary focus in the application field. Where does the revenue come from? What is the quality of the revenue generated? Is the revenue generation sustainable? These are some of the points we are very concerned about, results-oriented.

Liu Feng: So it can be said that your current investment logic is very clear, you don't want to talk to me about trends; what I want is for you to show real results, to be able to generate revenue internally, and to have real users.

Pi Ma: That's right, because the times are 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.

Pi Ma: Actually, I am 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 through launch platforms or DEX, or traditional trading platforms, and even rug pull software, these products are not only marketable but also in demand, and there are users willing to pay for your product. The USA is slowly legalizing and regulating, and a large amount of money will come to the blockchain. Stablecoins are currently only at 200 billion US dollars. In the next two to three years, or three to five years, stablecoins may continue to grow to 1 trillion US dollars. At that scale, it will present a 24-hour trading and operation feature. The transaction track can extend into a particularly vast and significant market space, so I am very much looking forward to DeFi on-chain or products in the form of on-chain Internet finance.

Furthermore, the most fundamental business model in 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. Combined with the religious fervor of the Crypto community, it is very possible to achieve a certain market growth and space in some niche areas that we may not come into contact with. 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 everyone to transact more. If you can achieve a daily transaction volume of one billion U.S. dollars, you may earn $1 million in revenue. You can then completely expand your coverage area to achieve higher returns.

Of course, there are some problems, such as once arbitrage kicks in, or if the product fails to receive positive information flow other than 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-stage growth of a business, which also aligns very well with the characteristics of Crypto investment.

Liufeng: You are still so full of enthusiasm. 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. But is it possible that all these on-chain funds will remain in the state of stablecoins, and transactions will also be priced and anchored through stablecoins, without utilizing the underlying native assets of the chain, such as ETH or Solana? The platforms that profit from it seem to remain at the application layer, with the underlying chain still in a coin-selling mode; it sells the coin to nodes, and then the nodes sell it to the market. It seems that the underlying coin no longer has the ability for self-sustenance through transaction fees. As a result, although there may indeed be a lot of money in this industry, it seems that there is not much help for the underlying token.

Pima: 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 you incur for bandwidth storage or computational resources on a public chain in a given period of time. 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 comes onto the chain. No matter which chain you access, it will definitely have a demand for liquidity and a demand for transactions. Asset on-chain is the asset on-chain of everything, and Tokenization is a major trend. Because it has very high transparency and flexibility, as well as 24/7 uninterrupted features. You need to delve deeper into what exactly On-chain Nasdaq is. It is about issuing assets and trading assets; this is your source. When you bring in so much capital, you can look at Tron's revenue. Their revenue is very stable, with Tron maintaining revenue in the tens of billions because it has a stablecoin Gas fee demand.

Jack: I understand this point, but what we can see as a current trend, for example, looking at Ethereum, in the last cycle due to this Gas fee, as well as various on-chain innovations, whether it's NFTs or DeFi, indeed drove a significant value capture for it. However, in this process of massive on-chain applications, its Gas fee has also become a hindrance to its expansion, and then it begins to enter a process of reducing the Gas fee. As the Gas fee continues to decrease, despite the increasing on-chain adoption, Gas revenue becomes less and less until it basically cannot sustain its value. A similar phenomenon can also be seen on Solana.

Pima: You are absolutely right. All blockchain systems are a kind of software that will continuously iterate. If we think about the world from a long-term, ultimate perspective, the marginal cost of Gas fees for all public chains is zero. So, what will they rely on for profits? You can look at Solana's priority fee. Solana's base fee accounts for only about 1/3, and most of the rest are tips and priority fees. Why raise tips and priority fees? This is actually the most core competitive aspect. In the future, a public chain's revenue will rely on tips and MEV to decide. Solana has actually differentiated its ecosystem through this. The base fee is just a regular transfer, meaning a transfer is a fee, and other transactions are another fee.

You will find that when you optimize the system around transactions, you can occupy a significant 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 operates on a first-come, first-served basis, which is also why On-chain Nasdaq pursues millisecond block speeds. Currently, Solana achieves 400 milliseconds, which is actually far from enough. I think maybe about 20 milliseconds could compete with the traditional Internet.

In this competitive process of REV or MEV, clients are willing to pay, which is a core competitive advantage. Why are clients willing to pay? Because clients believe it is profitable. Whoever dominates the majority of MEV captures, makes clients more willing to pay, which determines a way to discount a company's future core cash flow. Currently, 80% of Solana's daily revenue is from tips, priority fees, and MEV fees, which already explains a lot. 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 the B2B market, where the success is not determined by the B2C aspect. How a public blockchain attracts developers is up to each project. For me, what's important is the chain's transaction volume, REV, and developers. These are key indicators of how I view a public blockchain's growth potential and adaptability. We currently try to avoid investing in any public blockchain projects; the big picture is already set, what's not set is your position. Also, there's the network effect, just like why not challenge Contemporary Amperex Technology in the new energy field, because building the ecosystem is a very difficult task.

LF: Can we consider, based on your view, that the landscape of the public blockchain world is already fixed, and there's no hope for any new successful blockchain to rise?

MH: In the past decade or so, China's internet has given birth to ByteDance, a unicorn worth billions of dollars. If in the past decade, if venture capital or secondary market investments had not been made in ByteDance, there would be no need to continue, as 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 because we are loyal to some past logics. There is still hope for crypto, just like the rise of Hyperliquid. I believe that Hyperliquid, like Solana, aims to become a decentralized Nasdaq; Monad seems to fall into this category too.

The most crucial thing is that we have learned to calculate. With a large number of ETFs coming our way, we are facing more mature investors. In the future, within a unified account, trading friction is decreasing. Today you buy NVIDIA, Alibaba, Tencent; tomorrow you can buy Bitcoin ETF in the same account, whoever you buy will determine who is expensive and who is cheap. The core question is, why should Solana, Ethereum have a PE ratio 100, 200 times? If over multiple cycles your revenue performance is below expectations, then the PE ratio must be lowered. The investment system is becoming more and more mature, but many people have not thought about this issue. The key is to look at the core revenue and the fundamentals.

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

Layer 2 has significantly weakened Ethereum's economic value

LF: My last question was originally going to be, if you had to choose between Ethereum and Solana, how would you choose? But obviously, that question is no longer needed. So, can you talk about how Ethereum has ultimately made you give it up? Why? Are Ethereum's developers not good enough?

Pihma: I believe the key shift in Ethereum's core happened in 2018 and 2019. When you asked me about a bearish area back then, I mentioned Layer 2. I said Layer 2 would greatly undermine Ethereum's economic value. I have actually researched 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 is settled at the settlement layer? How much can Layer 1 earn in a day? Once Layer 2 splits, OK, after Base and Arbitrum have earned all the money, how much of it is handed over to the central Ethereum government? Is this revenue-sharing method reasonable? After the Layer 2 local chiefs gain a significant amount of economic ownership, will they have other ideas seeking armed independence? Will they seek a more profitable market-driven operation? I think these are the issues that Ethereum has not thought through in the past.

I think everything can be quantified and explained with certain financial metrics. The gross profit margin of a public chain is actually very high. If you can't figure out who earns this money, you don't know who will foot the bill, which is a very important issue. So personally, I believe Ethereum's move to Layer 2 is a somewhat incorrect approach, with no clear feedback to Ethereum, as all the money has been taken by the Layer 2 local chiefs.

Closing

Liu Feng: Finally, I would like to dedicate this podcast episode to a very good friend that both Pihma and I know. He is a dedicated fan of Pihma and left us in the second half of last year, which we deeply regret. I think if he were here, he would listen to this episode very attentively, so I would like to dedicate it to him. Thank you also to Pihma for sharing.

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