Dialogue with trader ZEPUMP: 200 times in 100 days, he summarized two important principles of trading Meme

How to understand the popularity of MEME?

FC: What was your most successful MEME transaction? How long did it take? How much money did you make?

Zepump: Actually, I don’t trade very frequently. The time when I really wanted to buy BTC was probably in May or June last year. At that time, I really felt that I needed to focus on this market. I didn’t buy much at that time, because I usually find projects quickly and buy them early. I bought them when the market value was less than 1 million. I didn’t buy much either. I bought less than 10,000 yuan at the beginning, and then I started to increase my position little by little.

FC: Could you please tell me which target?

Zepump: Its Harry Potter.

FC: So it wasn’t you who sent it?

Zepump: It was definitely not posted by me. If I had this kind of operational capability, I would have become rich long ago.

FC: I want to know about this process. You just said that you also increased your holdings. Let’s first talk about your thinking process. How did you discover it at that time, and why did you decide to buy?

Zepump: I discovered this by chance. I usually check Twitter quite a lot, and I happened to see some smaller bloggers talking about Jingtao, so I paid attention to him. Jingtao had posted this thing (Harry Potter) before, and I saw that it was definitely something I had never seen before. Then I looked at it carefully and studied it, and then I rushed to it without thinking too much. Then, I gradually felt that the most important thing was to truly participate in the community and build it together. I think this is still quite important for memes, especially for community projects like this.

Because memes also have different types, I think, one is this kind of community project, and the other may be a banker coin, the gameplay of banker coins is different, it doesn’t matter whether your community has it or not. But for this kind of community type, you have to really participate in it, you have to go out to CX. Because many people said before that I posted it, or that this Harry Potter is a Chinese plate, I said that it is quite awesome that Chinese people can post such things, anyway, I have never seen it, and I think that Chinese people may not understand mem itself so well, so they may not be able to make such a plate.

FC: We must not touch on regions first, as regions are quite sensitive recently. I will follow up on what you just said. You just said that you followed a small blogger and then mentioned a person. Because actually when we talked about base two days ago, one of the guests actually told me that he now focuses on small bloggers first. When he sees a person with thousands or tens of thousands of fans mentioning a meme, he may give it priority. On the contrary, he may think that those big fans are already at the back end of the communication chain. So did you think along this path at the time? Or is the person himself very important?

Zepump: What did you say?

FC: When you talked about that person with a few hundred fans, did that person have a high weight?

Zepump: I haven’t seen it. There may be similar ones now, such as the black man Newsy Johnson, but there was no such style before, so many people would imitate his speech. At that time, I carefully read the things he posted. Yes. And then he was not very popular at that time. At that time, I followed him, and there were probably only a few hundred fans. Then I followed him, and he followed me, and we always quarreled for no reason. Later, he became a big V.

FC: I see. So he has nothing to do with Harry Potter?

Zepump: It doesn’t matter, he is just a GEM Hunter, he just rushes to the local dog on the chain, yes.

FC: I see. Why are you interested in his language? For example, why do you think he speaks in this way?

Zepump: This style feature, first of all, is because no one else has said it, and secondly, a foreigner pretends to be Chinese and posts those nonsensical things. I think I have never seen it before, so I think it will be popular. In fact, I will make predictions when I see some projects or people. I predict whether it will be popular in the future. If it is popular, I will pay attention to it. Yes, including projects, I will not look at the present, I will look a little further.

FC: I see. This is quite interesting. But what I understand is that what you just said is that the most important thing is uniqueness, right?

Zepump: Yeah, just new things that haven’t been seen before.

FC: Ok, unique and potentially spreadable. Because today I actually read a report on memes, which actually also wrote about the definition of memes, because this itself comes from the book called The Selfish Gene. Now you understand that memes are, for example, in your words, for example, if your buddy asks you what a meme is, what would you probably tell him?

Zepump: The meme you are referring to is the meme coin, right?

FC: Yes, or if someone asks you, what are you hyping up memes for, how do you usually explain it to them?

Zepump: I think you can understand it this way. If you think of meme coins as short videos, such as the short videos on TikTok, and then think of the so-called value coins as the videos on YouTube or Bilibili, you may find it easier to understand this thing. That is to say, people nowadays, especially young people, may not have so much time to watch these long videos. If you give me a 10-minute or 15-minute video, I am too lazy to watch it. If you give me a one-and-a-half-minute video, I can understand it all. This is the best, and this can catch my eye, so I will naturally choose TikTok or Tik Tok instead of the videos on YouTube.

I think this coin is the same. Since you have this meme coin, everyone has realized that if I can speculate on this attention in a short period of time, why should I buy a so-called value coin and wait for you to develop it? I don’t have time to look at that thing, so I might as well shorten my attention span and speculate on short-term things.

FC: I think your analogy is very good. According to your logic, whether it is Tik Tok or Douyin, you know that the most popular videos are those that copy other peoples popular videos and then combine them with their own characteristics. So I dont know if memes have this characteristic, for example, they may continue or iterate on the previous hot topic, and then new things will appear?

Zepump: I think I will respect originality more. As a copycat, I don’t particularly appreciate this. I won’t touch copycats. Yes, and I don’t like animal coins.

FC: Why?

Zepump: Because I think it is difficult to have a community culture in animal coins. I think it is difficult. Of course, it may happen occasionally, but generally speaking it is relatively difficult. For example, if you make a dog or cat now, it is purely a bet on whether the dealer will pull the market, not whether the community can generate this kind of cosplay culture in the future.

How to screen targets and build trading strategies?

FC: Lets talk about trading strategies. For example, if you trade memes now, what key points would you set for your entire investment strategy? In other words, how do you find the next Harry Potter? How do you set these key points? Or how do you understand them?

Zepump: You mean how do I choose the target?

FC: Yes, select the target.

Zepump: I think I would look at it from two aspects. For example, if a coin comes out, first I need to look at its community and the vibe of the community. If it is a bit chill, I think I might buy it. Then you think about its spreadability. This thing is called memeability in English. Does the meme itself have spreadability, or do you have the ability to create a second creation to CX this thing to others. Because memes are also iterating, if you are still playing with the previous format of memes, it is actually difficult to become popular again, because everyone likes new things.

FC: You told me before that when a community forms an emoji, it’s actually a very important beginning. Can it give some concrete ideas about what chill is or what a good community is?

Zepump: I havent seen many good communities so far. I can give you a few examples. First of all, I think chainlink is a typical example. It is a so-called oracle project, but it is actually a meme. Yes, because it became popular on 4chan, where many people would post memes of various images of its founder, which is equivalent to everyone treating him as a leader-like feeling like a club. You might make fun of him or something, which means that all creations are created around the image of one person.

Then a bunch of Internet geeks like this image, which is fat and big, including chainlink. I think he made PEPE popular to a certain extent. Because he often uses an image called APU in his meme, which is equivalent to a variant of PEPE. Many of his memes will design this image into a community.

Another one that I think is well done is Magic in the past, Magic is Treasure Dao. They also have their own set of images. When they first came out, they were a monkey called Small Brains, and I participated in it. They can make people in the community identify with each other, so that you can change your avatar on Twitter to his little monkey, and then follow each other. After following each other, it is equivalent to forming a so-called echo wall, which means that if you keep in the echo wall and hold Magic, everyone will get more and more excited, and the cohesion of the community may become stronger and stronger.

FC: Does the term “echo wall” come from the community or was it given to you?

Zepump: I named him that.

FC: To put it bluntly, the further it spreads, the louder it becomes, right?

Zepump: It’s not this concept. The echo wall is called echo chamber in English. It is a closed environment where everyone talks to each other, and saying the same thing constantly reinforces this concept.

FC: I understand. Interesting. Please continue with your third point.

Zepump: The third project is Harry Potter. First, it has a coin, and then it has its own NFT. I think NFT is a bit like mylady, crazy. I think what they do is not much different from Magic. What is better than Magic is that they have stronger community creativity, including that they basically have new secondary creations every day, and the community is also more likely to make things happen. Their team participated in boxing matches and donated wells to villages in Nigeria. Anyway, there are always things that can keep you in this industry and keep you relevant.

FC: What I just wanted to talk about is this group that shares projects with each other. The first reason is why you can join? The second reason is why they are willing to share with you in the early stage, because in essence, you may also be the one who takes over to some extent.

Zepump: Yes, I think first of all you have to have the ability to find this project, and then you have to have a certain influence of your own, I think you may be able to join these groups, or you have been in the industry for a while, and have some degen friends, and you admire each other, then I think you will naturally be pulled into the group, its that simple.

FC: I mean, there are two reasons why you should go. The first is that you are very good at finding projects, and the second is that you have influence. You will also become part of the echo wall, making the whole atmosphere better or letting more people know about this matter. Is that what I understand?

Zepump: Yes.

FC: OK, I see. I will continue to talk about our trading strategy. Now we have found the target, and we have also talked about our methods from the source. The next question is about capital allocation. For example, another friend of mine may have 2,000 US dollars, and he may have 100,000 or 200,000 US dollars. His strategy is to buy one every day, and then after buying, I may sell the 100,000 US dollars as soon as it doubles, and then I can play with the rest of the money. What is your strategy?

Zepump: Generally, if it’s a meme that I really like, I’ll first buy it and hold it, then I’ll help CX. If CX goes up, I’ll continue to CX. If it doesn’t go up, it doesn’t matter. If it goes back to zero, then I’ll be too lazy to sell it. Anyway, it’s back to zero and I won’t be able to sell it for much money.

FC: How much do you usually allocate to have this mentality? For example, if you take 50%, will you be indifferent?

Zepump: No, I think these are all small positions, because once it rises to a certain level, I will never touch this meme again. If I didn’t buy it in the early stage, I would not chase the rise later. For example, PEPE was around 3 million when I discovered it, but I think someone had issued this coin before. Although I like PEPE very much, I think this thing has already existed, and if it has existed, I think I might not touch it because it has no originality. So no matter how much it rose later, I felt that this coin had nothing to do with me.

FC: I think this is very good. In fact, we always say that we need to have a stop doing list. I understand that valuation may be a more important signal for you. So how do you judge the valuation? For example, at what range do I give up, leave, and stop playing? I think this is actually quite difficult.

Zepump: I think it has something to do with the market at the time. In May last year, the price of a coin suddenly rose to 3 million, which was actually quite high. At that time, I expected it to be around 10 or 20 million, because there was no meme that said it would rise to such a big level. Now, I think 10 or 20 million may be a cheap price.

FC: Actually, it is just looking at the average valuation of the market, right?

Zepump: Yes, and it is related to the chain. For example, there are more local dogs on Solana now, and naturally there will be more money on it. At this time, a project you have on Solana may be worth 10 or 20 million, and the concept is different from 10 or 20 million on Ethereum. 10 or 20 million may be cheap on Solana, but 10 or 20 million on Ethereum may be relatively expensive.

FC: So it depends on which chain it is on, and the proportion of the overall meme on the chain, and then determine the range of your valuation. The next question is, like meme, we call it a big sector now, do you think it will continue in the cycle? Or will it fail under certain circumstances? In other words, when do you think you will stop playing in this sector?

Zepump: I don’t think I will stop playing, because just like the problem of short videos mentioned before, once you watch short videos, your attention has become like that, and it will be difficult for you to go back. Once you have tried a project that can skyrocket in a short period of time, you will never go back to those so-called VC coins or value coins. I think it still has a great impact on the industry. I think the influence of VC investment in this industry may gradually become smaller and smaller.

FC: So pessimistic.

Zepump: Yes, actually, this was my opinion last year. The reason why we invested less in VC later was that we felt that the user habits were also changing.

FC: I see. What do you think about these celebrities issuing these coins on Solana?

Zepump: This is very short-term. I forgot who said a good point, that is, the moment a celebrity posts something, the attention is already the highest, and then the attention or influence will only gradually decline. I think the coins of celebrities and politics are different. For example, for coins like Trump or Maga, because this year is an election year, once there is news on them, it will continue to strengthen its influence. But as a celebrity, it is difficult for you to be on the headlines every day.

FC: I see. For a meme, the most important thing is the screenwriter.

Zepump: I think choosing the subject matter is very important.

FC: It has to be sustainable, right?

Zepump: Yes, it can’t be short-term. If you want to hold on to the meme for a long time, you need to find that kind of cultural symbol. You have to judge whether this thing can continue. It is not a short-term so-called hot search or keyword, but it can survive for a long time, live in this blockchain world.

FC: Can you give two examples, for example, if a coin meets these two criteria, it may live longer?

Zepump: You yourself are already a cultural symbol. For example, PEPE is actually a cultural symbol. I think this target is worth holding for the long term.

FC: I see. I think everyone should read Hua Huas Super Symbols Are Super Creativity. So what do you think will happen to memes in the future? For example, if you watch short videos, dancing became popular first, and now the plot accounts are hyping up CPs. What do you think will happen next?

Zepump: It’s hard to say, but I think the live broadcast function of pump.fun is a major update.

FC: Because this is a variable, people may get information more intuitively, is that what you mean?

Zepump: Yes, the way of dissemination may also be different. It has live broadcast, and there may be some new things.

FC: OK, got it. Lets move on to the next part. Did you buy that bom?

Zepump: I didn’t buy it, because I bought a lot of this kind of Art NFT before, and I am still pessimistic about this kind of artists in the cryptocurrency circle, because they don’t care so much about long-term things. Including turbo, which has risen very sharply in the past few days, I also bought it before, but I think I was deeply hurt, because this artist was so stupid that he suddenly wanted to issue another coin for satire, and the whole community collapsed. It was all good at first, because he was the so-called first coin issued by chatGPT. He didn’t know how to issue coins before, and after he helped to issue it, it was actually quite popular. But later he made a stupid mistake, and I felt very disappointed with this artist. In general, I think artists’ ideas may be more random, and I can’t predict this thing.

FC: Lets talk about your trading experience next, because you just mentioned your trading strategy, but I think it is important to form a trading strategy. Can you tell me, for example, how did you make the most money-losing trade? What did you buy, and why did you buy and sell?

Zepump: I lose money every day. I am like this. If the price drops too much, I will not sell it. If it goes to zero, it goes to zero. I don’t sell it. I think the methodology is different in each cycle. The method I used in the last cycle is completely useless. Because I started to check Twitter in the last cycle, and I saw it relatively early, so I made money from projects that just became popular on Twitter. Foreigners may not be that popular yet, and the Chinese-speaking area definitely doesn’t know about them. I will find such projects to buy, and then slowly list them. After they spread to the Chinese-speaking area, I will sell them. I used to make money from this wave. But now I think the time difference is getting shorter and shorter. Once it is on Twitter, basically everyone can know it relatively quickly. I think this advantage is gone, so I started to study other things later, such as memes. The essence of the currency circle is actually to see who enters early. No matter what you buy, you buy a bad project or you buy a scam, but if you enter early, you also have the opportunity to sell it to the person who takes over later at a higher price.

FC: I would like to ask, which person or what kind of cognitive change do you think is important to you in the whole trading process? The biggest change for me was the 312 incident. I was chasing the ups and downs, and I heard KOLs say that the industry was going to die on the left and that they should go all in on the right. At that time, I felt that I should establish my own trading system. So what did you encounter or see that led you to form your current trading system?

Zepump: I think what is more important is what a friend taught me, which is to continuously slide the take-profit. For example, after you open a contract, you place an order, and start to make a profit, you should continuously adjust your stop-loss point upwards. In the end, I think it is actually more difficult to lose money in this way, unless you start in the wrong direction.

FC: What will you do with the meme?

Zepump: meme I just buy it and hold it, then buy it and hold it and then CX.

FC: What was your reason for selling Meme? How did you decide when to sell?

Zepump: I will definitely not sell Harry Potter until it reaches $1 billion. If I like a project, I will help them find a way to market it, but if I don’t like a project, I will sell it as soon as I remember it when it goes up, and it doesn’t matter if it sells at a loss.

FC: So how do you generally help with these projects?

Zepump: If you can help a project, you can help in various ways. Because I may have more resources on the exchange side, I will find ways to help them list, and I will also help connect with market makers or some partners, or help them think about what they should do. Because many memes don’t have strong resources in the cryptocurrency circle. They have strong publicity or operation capabilities, but they may not understand the players in the cryptocurrency circle very well, so sometimes you need to intervene and tell them what they need to do at this stage and what they need to do at that stage. They may have a good idea, but they may not have other good factors to help them.

How to fry MEME better?

FC: Im actually suddenly curious about personality, because I suddenly found that the people around me who are particularly good at making memes are actually more casual in character. Do the people around you who make memes have anything in common? And should we let go of some of our previous inherent perceptions in order to do better in the meme track?

Zepump: I think what you said makes sense, that is, dont take it too seriously. Many things are more casual, and you dont have to get stuck in a rut. Meme itself is not a very serious thing. It is equivalent to deconstructing all the serious financial things in the past. Isnt Bitcoin the same? In fact, I think the currency circle cannot be taken seriously in nature. If you take it seriously, you will calculate the data, but in fact, the price has nothing to do with the data. I also read a report today, saying that Brave Browser has how many users, so what? No one buys your coin, and your data has nothing to do with the coin. The coin is an independent thing. I dont think it has much to do with your product. If you look at this thing seriously, I think it is easy to make money.

FC: What do you think people around you or yourself are going to do to stay sensitive to the market? Or what have you done in the past?

Zepump: I think checking Twitter is definitely the most helpful thing. At least you know what is happening in the industry. I think most of the obvious things in this industry happen on Twitter. For the hidden things, you have to find ways to get to know the core institutions in the cryptocurrency circle, so that you can understand what is really happening under the undercurrent.

FC: If everyone is checking Twitter, how can I be better than others?

Zepump: You should constantly optimize your follow list. I think this is very important because there is too much noise. In fact, I think it is better to follow more people at the beginning, and then gradually you may feel that there is no need to follow so many people, and you may gradually reduce your follow list.

FC: Last question, what is your latest position? This is not an investment advice.

Zepump: I recently bought Solana, and then bought some degen on base. Although it fell after I bought it, I think base may have a second wave. After friend.tech left, he may be the one to carry the banner. I think I am willing to bet on it.