Today there isn't much inspiration, so I'll organize some recent scattered inspirations and write a ramble. This ramble is more about explaining the underlying facts and logic about making money, which may cause some discomfort. Like previous articles, it is all based on personal subjective speculation, so DYOR (Do Your Own Research).
People with a strong sense of morality are destined not to make money.
This argument may be offensive to some, but it is an undeniable fact. I have been involved in project incubation and have written whitepapers, advertorials, and many other things. But most of the time, these contents are made up.
Because I understand the business logic and technical framework too well, I know that most of the content of many projects is fictional. Of course, from the perspective of the project, it is called a future vision, a roadmap, a future plan, a narrative. But all these beautiful narratives about the future are all for the money in your hands right now.
It is precisely because I have a strong sense of morality that I no longer do things like project incubation, because I cannot enjoy making money by taking advantage of the information asymmetry between myself and others in the industry.
On the other hand, as long as you have no moral sense about making money, you will inevitably make money in the crypto field, it's just a matter of how much.
Why do I emphasize Crypto/Web3/Crypto Circle?
In the stock market, your opponents are various financial institutions or financial masters and doctors. They have sufficient professional knowledge, abundant financial tools, and mature information channels. In the real estate market, your opponents are various real estate giants and local policies, they are the ones who make the rules and control the media.
But in the crypto field, most of your opponents are ordinary people, or ordinary people who understand technology. This field does not have mature and cumbersome tools, so the starting point is almost the same, and the lack of tools brings more entrepreneurial opportunities. The entry barrier in this field is so low that you can issue tokens or create chains with just one click (strictly speaking, if you have specific requirements, one-click tools cannot be achieved). Most importantly, there are no rules in the crypto field, it's up to your own ideas on how to play.
Because there are no rules, as long as you have no moral sense in the crypto field, you can easily make money here. For example, thanks to anonymity and globalization, you can rug pull on a large scale. For users, the cost of identifying rug pulls is huge, and 90% of users do not have the ability to do so, whether it's knowledge or technical reserves.
If you are very disgusted with rug pulls, you can call it community governance. Just yesterday, the founder of mfers, Sartoshi, wrote a farewell message and announced that he would "return the project to the community" and then deleted his social media accounts and ran away. Community governance is only suitable for projects that distribute fairly. For those projects that take the money but throw the operational responsibility to the community, isn't this another form of rug pull?
By now, if you still have a strong aversion to this kind of community governance, then you can upgrade the packaging and create a narrative. Combine with popular topics such as the metaverse. Create a cool website, write a roadmap, invite KOLs to promote, and then release NFTs or tokens, raise funds from the public, or if you have resources, you can raise funds from crypto VCs. The cost of this set may be less than $100,000, and then you can raise millions of dollars in tokens and maintain operations by posting announcements on Twitter every day. If you think my description sounds fake and cheesy, then just look at how 90% of NFT projects are doing it.
If you still can't accept projects with this kind of narrative packaging, then you can consider delving into the Web3 field and become a Web3 user yourself to find pain points and research solutions to solve them. Or if you are in the Web2 world, you find yourself constrained by the Web2 system and start trying to create the world you want in Web3 and implement it in technology/product development. In the process, you encounter a funding dilemma, and then you start issuing tokens or seeking institutional funding to solve the funding problem until the product goes live and starts generating profits. This cycle may take two to three years. Can you accept this way of making money?
The above four ways of operating projects are ranked from low to high in terms of moral sense. You can see where your moral sense of making money falls and the lower the moral sense, the greater the probability of making money, although it is not aesthetically pleasing, it is an objective reality.
Most project teams have the same goal as you, making money
This is also something that troubles me a lot. Many projects are clearly just raising money, but many people are still enthusiastic about investing and believe in the project's flawed narrative.
In the crypto field, the majority of projects aim to make money, and the core methods of making money are either issuing tokens/NFTs to make money from the public or making money from investment institutions. As for their narratives, they are all in service of the goal of making money. Once they make money, the project naturally stagnates, and they only need to spend a little money to maintain operations by posting announcements on Twitter. This is called a "soft landing", which means running away without looking like they're running away.
Let's take the project Parrot that I have participated in as an example. The investment institutions involved include Alameda Research, NGC, and they raised about $400 million in the IDO. The project itself is about lending and collateralizing stablecoins, and at that time, there were no similar projects in the Solana ecosystem. With such a project that combines Maker DAO and AAVE, and with the endorsement of Alameda, it is unlikely to suffer losses or a significant drop from the IDO price. But in reality, it has dropped by 99%.
So what did they do after the fundraising? In fact, they did almost nothing substantial. They would post on Twitter every week and share some posters. The usage of the project is almost zero, and the community activity is almost zero. This is a typical soft landing project.
For the project team, fundraising is their goal, and the project direction is the core of packaging for fundraising. Once they get the funding, it means that the mission of the project is over, and it doesn't make sense to continue investing in the project. So they only need to spend a little money to maintain operations by posting a couple of announcements and keeping the community running.
So how do you distinguish such projects? It's actually very simple, just break down the project. Divide a project into two parts, which I call the futures narrative and the spot functionality.
Futures narrative is when a project describes to you how big the future market is, or how rich the future product features are, or how many partnerships there will be in the future. Or they describe those sci-fi worlds like "Ready Player One" and some unrealistic business logic or logic that goes against the development of electronic science.
For example, I have seen an NFT project that boasts on its official website about doing 3D NFTs and developing hardware for the metaverse, allowing users to socialize with their 3D NFT avatars in their self-developed metaverse. But in reality, they only released a 2D PFP (Profile Picture).
In terms of business logic, they want to rely on heavy assets in the physical industry chain (VR hardware) and rely on soft assets in terms of technology development (metaverse world, interaction system, etc.). It's a mix of everything and it's clear that it's just a narrative package that cannot be practically developed.
And in terms of the development of electronic science, they completely ignore objective problems, such as not considering solving the pain points of VR glasses like field of view and goggle effect, etc. These details completely prove that such projects have not done rigorous market research and planning, and they are just stories made up by copywriters earning a monthly salary of 8,000 to cater to the market or investors.
At this point, some readers may think that my nitpicking on the narrative of the project is meaningless, that everyone is telling stories, and only with a good story can you attract investment and make the price go up.
But this kind of thinking also indirectly proves the lack of rigor in people's investment decisions and the lack of value they place on their own money. It also echoes what I mentioned earlier, that in the crypto field, as long as your moral sense is low, it is very easy to make money because many people are not professional investors and do not make prudent decisions. As long as the story is good and creates FOMO sentiment, you can make money from these people.
Spot functionality refers to what functions you can currently use in the project, what products you can experience, even if it's a beta version or a testnet version of the product. This means that the project has made real investments in development.
Let's take the aforementioned NFT project as an example again. In terms of actual spot functionality, they only have PFP. They don't even have a PFP gallery.
The functionalities that you cannot experience right now are all empty functionalities, empty products. A project will encounter many problems in the process of advancing its product, and these are sunk costs. So projects with products will not easily give up, while those projects with very low sunk costs can quickly abandon them as soon as they make money or if things don't go well. This is also why the price of Azuki plummeted rapidly after the founder self-exposed that he had done three PFP projects last year and "handed over the project to the community".
Because these PFP projects focus entirely on narrative packaging, the team may only need a few people or a dozen people to run them. Similarly, it is easy to abandon them when needed, and it is also easy for the same team to start a new project.
But for "heavy asset" projects in the crypto field, the development team of a public chain is at least dozens of people, especially for large projects like Ethereum, there are known developers involved in the Ethereum merge plan alone, and they number over 150. More than 4,000 people have participated in the entire open-source project of Ethereum, and there are over 200,000 active developers on the Ethereum public chain. It is almost impossible for such projects to be abandoned because the sunk costs are so high that no one can believe it.
Therefore, when looking at projects, pay attention to what functionalities the project currently has and whether it has innovative or self-developed capabilities. The heavier the focus on development, the lower the possibility of the project team running away. In the ranking of moral sense of making money that I mentioned earlier, projects that focus on development tend to have a stronger moral sense.
Strive to learn and improve your cognition, make your own money, make long-term money
This is actually a topic that has been talked about a lot, and everyone understands the principles, but they can't do it. So let me describe this point in a more colloquial way.
To put it bluntly, many people in the crypto field don't really learn, they just blindly follow the market. So as long as you start learning relevant knowledge, you are already ahead of 80% of people.
Take myself as an example, I don't think I'm smarter or better than others. I have many professionals in my circle of friends, financial masters, quants, people working in securities firms, people working in investment banks, and without exception, they are all better than me. I'm just someone who started learning earlier than them, but that doesn't mean that my learning efficiency and acceptance ability are better than theirs. This is what we call information asymmetry, not ability difference.
Perhaps due to sunk costs, these professionals don't have the time or the possibility to give up their current possibly million-dollar salaries to learn a new field like Web3, so this has given many ordinary people many opportunities.
Start your learning journey, learn a little more every day than yesterday, and you will create information asymmetry. There are now many people willing to pay for information asymmetry, or what we call knowledge payment. Some people specialize in sharing information about NFT mints, some specialize in sharing IDO platforms, or like me, sharing my investment experiences.
Over time, self-improvement is also a form of making money.
Author: Liu Ye Jing Hong
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