a starter guide to the crypto mmo

Jan 02, 2025

the greatest risk in investing lies in the “what you don’t know you don’t know” quadrant. traditional finance (tardfi) has decades of experience and regulators that minimize this danger, what we deride as “investor protections”. crypto is the comparative wild west, a surprisingly small arena relearning tardfi’s rules in blood. this creates an unequal playing field, where some players understand the “unwritten rules” better than others.

this guide is intended to impart those lessons, hard-earned. unfortunately, selection bias dictates those most in need are likely watching youtube videos or following lilmoonlambo, not following me (as one writing a guide would tend to think). hopefully you, the sophisticated reader, can still find some useful amongst the obvious.

i’ve chosen to frame crypto as an mmo because it has all the characteristics of one. health, levels, online friends, pvp, pve, a town square, an economy - its all there, just the coins are worth more than wow gold. these are the monetary metaverse origins.

concepts are roughly presented in order of perceived potential impact to your outcomes (if not already implemented/understood).

grouping up

many that embark down this path are natural contrarians and/or solo players. definitionally one must be, to ignore the warnings of friends and family - if they know at all! and any experienced success only reinforces the feeling of personal advantage. “i only need listen to the market” - this solo player states.

discard this independence. the issue with only listening to the market is: it’s a lagging teacher. it will only tell you your wrong after you’re wrong, and this industry moves too fast for such lessons.

find a good group of ethical, hardworking, likeminded grinders. the most important trait to look for is resilience - befriend those who seethe at mistakes and take action, avoid those who simply cope. a high-trust chat can cover more ground than a solo player, and will tell you when you’re right or wrong quickly. the most helpful, if abrasive, is directly - but indifference is feedback too.

if you’re having difficulty finding a group, consider your value proposition. generally, unless you meet and befriend people irl, invites are based on “potential added value” and “culture fit”. the best machines are made up of strong individual cogs - work on increasing your reputation until you can join the chats you want as an equal, not a charity case.

here are a few helpful friend archetypes i’m fortunate to have alongside me:

the guide: teaching truisms early on, as i hope to pass on
the partner: 10 hours and 2000 dms a day during the right regime, working on plays together
the signal: a more discerning partner, who helps differentiate between good and bad schizo ideas
the prospector: a less discerning partner, who surfaces new opportunities to sift through
the wizard: a technical ringer
the expert: situationally appropriate expert advice

what most people think are cabals are usually just group chats of friends that came up together, and now wield influence.

the importance of the home base

all group chats are not made equal. there is a concept of a “home base” chat group - the one you log into first, respond to first, and most importantly - the one you share stuff in first.

when choosing whether to invite someone to your high-trust chat (for productivities sake), counterintuitively you must discount higher profile accounts, as they likely have established home bases. instead, the best profile is a still hungry grinder who doesn’t yet have a group.

growing complacent

a group chat has a natural cycle of life.

in its prime, the majority of the chat is motivated and hungry. usually this comes from newer sharp entrants who haven’t made it yet but likely will.

at its dusk, a chat grows rightfully complacent. the members have made it to higher levels, where the gameplay is slower, more methodical. there is less actionable to chat about day to day, and thus topics often switch to life/political etc.

if one enjoys staying at the cutting edge, it can be helpful to befriend new up and comers and join chats that haven’t made it yet. remember the energy and hunger you had when you first came up, and surround yourself with it again.

pick a class - find edge

in order to succeed long-term in this space, one must develop real edge. buying a coin that goes up during the bullrun is not real edge - though identifying bullish conditions is. sitting in a groupchat that spoon feeds you plays is a kind of real edge that often decays quickly. consistently making money in an area of expertise is real edge.

different strategies suit different temperaments. a patient, risk-averse player should not enter the pump.fun arena, and likewise a degenerate will not farm very long before getting distracted.

below are broad overviews of different skillsets i have seen work, categorized by general risk profile.

dps - traders

these are the different types of directional trading styles, offering high reward at a high risk. the success stories from those who rise overshadow the masses losses. to play a dps main one must have a high capacity for risk, strong risk management, mental resilience, and energy in the face of defeat.

trench warriors

shitcoin traders have the widest range of aptitude of any class - the worst (and average) are very bad, and the best are very good. players like req and nbs take full advantage of the information set available. if you consider yourself a “shitcoin trader” and are not running your own onchain analytics you have room to improve. this is the only true alpha in this category imho.

while a popular starting class due to the low capital requirements and high potential upside, the trench warrior style does not scale to higher levels. the issue is liquidity - new launches are very illiquid and trying to trade with larger size means more slippage. in fact, often buying too much supply of a coin kills it - as one takes on a proportionally larger responsibility for distribution. shitcoining doesn’t scale well horizontally with more volume/trades, as the failure rate is so high.

those who make it out of the trenches are advised to not return, save special occasions or serious demonstrated edge.

good new thing hunter

good new thing hunting is about finding a new token with a strong fundamental thesis, positioning early, and riding the subsequent appreciation. unlike a trench warrior, whos holding period is in days if not hours, a fundamental narrative can take weeks to months to develop, although ideally the market agrees. this is my preferred style, and the one i believe is most repeatable without “getting lucky”. the ideal range for a “good new thing” is buying around 50-100mm market cap and exiting around 1bn mark, which means this strategy can scale into the higher levels without issue.

why new thing? because the core thesis is “the market isn’t pricing this properly, it should be worth more”. this is easier with new things than old things for two reasons:

time - the market has had less time to price it properly
flows - there are less existing holders to sell and more sidelined buyers

it doesn’t entirely have to be a new token - an old token pivoting can work too, with a little more headwind due to existing supply.

how do you find a good new thing? the answer is “you’ll know it when you see it”, but assuming you don’t know what you’re looking for, this is my starting checklist:

is it new/novel?

this is the most important one. first movers can gain more momentum than you expect, with a very high upside reflexive risk/return. a new meta brings new opportunities to talk about this industry, and all attention calls back to the original.

does it have a flywheel?

shitcoins have a natural flywheel - as they go up, holders get richer and more excited, tell a few more friends, and thus the cycle goes. other flywheels are more intricate. a bonding curve is generally a fantastic flywheel in of itself, because you can be deterministically early with a guaranteed payout, which bootstraps the activity.

is there onboarding friction?

onboarding friction allows for your entry, for the thesis to develop. if there’s no onboarding friction, then why are you so lucky to be buying it cheap? maybe it is fairly priced. this also assumes there is a path for that onboarding friction to be reduced - think rollbit migrating from solana to ethereum, hyperliquid spot ecosystem growing, even the bitcoin etf. the friction reducing allows for more flows to enter, to the benefit of those who put in the effort earlier.

meme priest

while a gem hunter relies on the crutches of “fundamentals”, a meme priest is untethered from such nonsense. meme priest’s are this cycle’s nft traders, intuiting vibes to find alpha. just like nfts, buying and coma-ing is the best trade until its not.

this path requires extreme conviction - one must be able to withstand drawdowns that also deteriorate said vibes. the best priests change the odds of success themselves. consider baproll and spx6900, or dbl and fartcoin.

also consider that bitcoin is, on a grander scale, a giant memecoin. when i look back on my own history, i find if i simply fell into a coma each time i bought a memecoin, i would have outperformed much of my “active investing”. i wonder if the same applies to you - something to take away perhaps.

leverage wizard

the highest risk of failure of all classes, the leverage wizard can be indistinguishable from the “problem gambler”. the issue, from experience, is most traders use too high leverage, hold onto losers too long, and generally overtrade. i have made this joke before: “there are no successful leverage traders - only ones who haven’t blown up yet”.

leverage trading lies to you, by being deceptively easy a few times a year - think around the bitcoin etf approval, or trump election. the rest of the time its a brutal pvp battleground. even when profitable, the leverage wins often pale in comparison to simple asymmetric spot plays.

i strongly recommend against picking this class.

farmers - tanks

nigh indestructible (save for smart contract risk), tanks take very little losses, while their upside is far more capped. playing tank is recommended for the very patient, risk averse, or otherwise occupied player.

stable farmer

providing liquidity to users or projects is a lucrative job. in general, there are a few different sources of consistent yield, and most stable farming opportunities rely on one or a mix.

funding rate trade

when bitcoin is at all time highs, as it is at the time of this writing, there is a tremendous demand to buy on margin. this pushing the funding rate, the annualized rate that longs pay shorts, very high - often above 20% on major coins like bitcoin, ethereum and solana. a high funding rate trickles into all corners of onchain stables, obviously usde but aave and other lending markets as well.

rwa yield

treasury bills are the most common and liquid real world asset that has been successfully bridged to crypto. i would avoid real estate and most other forms of real world asset yield, as the liquidity is low and negative selection high.

emission yield

projects emitting tokens to users who provide capital was the discovery that created defi summer. today it is more complicated, as points programs make the returns less predictable, but even points programs can have upside surprises. this is true pve, as the projects are happy to pay with tokens they print for useable liquidity.

while fitting none of the categories above, “marketmaking liquidity provider” is a new entrant from this cycle that is not quite stable but has high enough returns to qualify. the gmx liquidity pool was the first major implementation, followed by jupiter and hyperliquid. i think both jlp and hlp are fantastic vehicles to deposit capital into, because everyone is so shit at leverage trading.

i would generally recommend against leveraged stable farming - too many things can go wrong at that point.

sybil/wash farmer

for the hardcore runner, this strategy presents the best risk/return by far as it typically risks very little capital. the idea is to participate in a new protocol (as a user, as trading volume, etc) such that the expected reward is greater than the cost. it is also a dying art, as projects wizen up to the extractive nature of this farmer and implement linearly designed rewards.

at the core of this farming is an implicit understanding - projects want metrics (users, tvl, volume) to support valuations and attract new users. unlike stable farmers, who provide generally useful liquidity, sybil/wash farmers provide an illusion. still, many projects are willing to pay (tokens they print) for a good dune dashboard.

most serious operations I’ve heard of are programmatic, always fighting detection. i decided to never touch zksync after a casual mention of a 12k bot farm.

one practical way to implement this - when you interact with a good new thing, touch it from several accounts that you actually use organically. in related news i have a few extra hypurr nfts if anyone wants to otc.

support - other

neither really trading nor farming, these styles are orthogonal enough to get their own category.

insider

there are many forms of the insider; some helpful, some nefarious. regardless, it is a privileged position to be in, with far less downside risk compared to the average buyer.

what is the difference between an investor insider and a preseed insider? usually project quality - previously you could have used vc capital as a signal but those norms are shifting.

most project founders are more open to a dm than you realize, especially at earlier stages. nbs’s presale strategy of waiting for the presale to fill up, sending after and dm-ing the dev is a form of this.

builder

i’m not a builder and don’t have any real success building, so my only serious advice to a builder would be: stop reading this and go back to building. maybe it can help with your user profiles, but i don’t think anything i can say would be better than continuing to iterate and find pmf. think of the best builder you know. are they reading this?

onchain rogue

the space has many corners, and those with the technical proficiency, required curiosity and energy to dive deep can find and monetize the edge cases. sniping, sandwiching, randomness exploits and more await those who care to find them.

leveling guide

it’s important to contextualize any leveling attempt as either a speed run or a hardcore run.

a speed run can restart. this is what we call “hypergambling”. ideally you have a separate income stream, or are a student with high earning potential in front of you. less fear of death means a speed run can take risks a hardcore run cannot.

a hardcore run has higher loss aversion. life savings, third world country, dependants - anything that makes hitting zero an impossibility.

four figs and below

if you already have a job/are a student, skip to the next section

at this stage, your time is much better spent fiat farming - a minimum wage job is a 150% apr farm, and surely you, my reader, can achieve greater.

the truth is you simply don’t get enough out of a portfolio of this size to warrant spending time on anything but sybil farming, and that does not demand fulltime attention. 10x’s are rare, save them for higher levelups.

if you live in a jobless region, join a protocol, as community manager or however they’ll have you. the simplest way to do this is to actually be native to the community as the protocol grows and they need to hire.

five fig hell - focus on increasing fiat

welcome to the trenches. every dollar here is precious as ammunition for the 10x you’ll eventually find.

many try to be trench warriors without putting in the technical effort that it actually takes, or try their luck as leverage wizards. these are the ones forever stuck in five fig hell until a bull run comes along and lifts them out - just as often to fall back in again.

instead, i have seen memecoin holders and good new thing buyers consistently graduate - buy and hold spot with conviction.

whether you’re playing on hardcore or not, sybil farming takes very little capital to participate, and it only takes one big misguided nonlinear airdrop to graduate from this tier.

six fig hell - find the 10x

this is the sweet spot - you have enough capital to make a 10x trade worth it, without being too big as to worry about sizing or slippage. in the good new thing hunter section, it describes the ideal opportunity as 50/100m -> 1bn.

i have personally escaped six fig hell four times now, having been so lucky as to never fall below. each time the strategy was the same:

obsessively monitor for good new thing opportunities
play around a bit to confirm thesis
full port with conviction and wait for thesis validation
take profits when the entire timeline is talking about it

when i look back, each escape had another commonality - i bet on an exchange token. after all, speculation is the killer product market fit of crypto.

seven fig hell - find a few 2-3x

the strategy for exiting seven fig hell is largely the same as six figs, just repeated. riding the swings gets harder as the numbers get bigger, but you get used to it.

the hardest thing to consider is sizing - oftentimes you’ll find yourself wanting to buy more of something than the liquidity allows. this forces diversification. at six figures you want all your capital available to throw at your best idea - at seven often thats not realistic.

because of this, this is the first level that i would start seriously considering private rounds. while often presenting great upside, there is a significant illiquidity that comes with private deals. that illiquidity is ok if you have too much liquidity in the first place - otherwise it becomes a real cost.

parking capital in stable farms in between good new things becomes more attractive at this level too. patience is a virtue.

eight figs and beyond

what is there to say - no one that has reached this level needs advice beyond “dont fuck it up”

dont stand in fire

avoid these common mistakes.

avoid trading while on tilt

learn to recognize your own tilt. when you feel it creeping up, close positions and walk away for a while. nothing good ever comes from chasing losses.

avoid punting after a big win

often big wins are followed with a dumb loss - scaled up due to the recent win. “euphoria trades”, as i call them. keep the same rigor to your process regardless of your emotions.

avoid roundtripping

constantly think about “whos left to buy”, as everything is flows. oftentimes something will feel safe because everyone is holding it.

forget about upnl/old ath

dwelling on past mistakes is wasted energy. coping about such things clouds your mind and obfuscates the next play. ball up top.

“ive watched people lose the most money on “insider” information” -cl207

think very hard about where you sit in the shill radius. the farther away you are from the source, the more likely your edge is actually exit liquidity

losers average losers

also known as “don’t fight the market”. if the market is telling you you're wrong, don’t add to the position without outsized and justified conviction.

oldcoin bad, new coin gud

i refer you to my thread on flows for more in depth coverage of this topic here

traits of the best players of games - david sirlin

david sirlin, a competitive fighting games champion - thank god we didn’t get that autism - wrote a book called “playing to win” in which he details his approach. nothing will be too surprising to anyone who has participated in a high level organized competition. the traits he outlines as necessary for a successful winning player seem remarkably apt for crypto participants as well. in no particular order, they are:

deep knowledge of the game

knowing historical precedents helps to extrapolate

love of the game

you must love this game to put in the required hours to win

mental toughness

this game will break you

mental attitude towards winning/losing/improving

do you cope or seethe when misfortune strikes

technical skill

do you have edge

adaptability

can you adapt your edge to new regimes

yomi

can you predict the actions of other participants

appraisal

can you relatively value the “goodness” of things

oldcoin bad, newcoin good