Crazy price action this week.
GBTC had $386.6m worth of outflows, which caused a huge marketwide correction.
There are rumors that the SEC may be preparing to classify ETH as a security. I wouldn’t be too concerned, as they took a major L against XRP (Ripple).
This correction is a good thing—it’s a breather for us to catch our breath and prepare for the next move.
Here’s what we got today:
- Memecoin guide. My approach to memecoin investing.
- Chart of the week. Solana is dominating crypto transaction volume.
- Around the web. $ETHFI airdrop is here, BlackRock is starting a tokenized fund on Ethereum, and more.
Today’s email is brought to you by Radiant — the leading omnichain lending protocol.
Here’s your Edge 🗡️!
My Approach to Memecoins
Memecoins have taken over Solana.
At the end of February, Dogwifhat’s market cap ~ was only $300 million. But by March 15, it had crossed $3.15 billion. Other major Solana memecoins, such as $BONK and $SLEF, also experienced impressive growth.
The latest meta is memecoin presales. In just the past eight days, memecoins on Solana have raised more than 122 million in presales (Most are scams by the way)
And now degens are turning to Base for memecoinary. What can you do about this mania?
My Approach to Memecoins
Memecoins will always have a place in crypto, especially among retail users.
- They’re fun. Dog coins are cute. Modular DA is a headache.
- High risk and high reward play. To make 100x, you need to take extreme risks.
- They’re for retail. Bull market pumps are powered by retail money. So, you need to go where they are.
- Unit bias. People want a “whole unit” of a token. They want 1 $DOG. Not 0.002 $ETH. Memecoins have a higher token supply, and more tokens can be bought for only a few dollars.
I wanted to share some quick insights on approaching memecoins without getting wrecked.
First, keep meme coins as a small part of your portfolio. I recommend no more than 10%. Build your portfolio with solid projects, and you can have memecoins in the high risk buckets.
There are two types of memecoin investing.
Established Coins: The first style involves established memes like $DOGE and $PEPE.
They have established communities already, and mindshare. While you may not be able to make 100x with these tokens, you may be able to make 3-10x when the euphoria hits.
Moon Coins: Most of the time, you’ll get rekt. But if you get lucky, you can make that elusive 100x. It’s almost gambling.
But don’t wait for 100x to take profits. Even the more successful memecoins dump after hitting a 5x or so.
So, if the token hits 3x, take profit. You can then leave the rest as a “moonbag”. If the token makes another 10x, you still have exposure.
You can always use a barbell approach where you have one of each.
How can you find memecoin gems?
You’ve now learned about the general approach and strategy for memecoin investing. Now you need specific methods for finding memecoins that can pump.
Method #1: Look for coins that meet certain conditions
Here are a few criteria that I look out for:
- >100k in liquidity
- >10 million in market cap
- >100k in six-hour volume
- Trending in the last 6-24 hours
But don’t consider the above to be an unbreakable law. Those criteria change as the market changes. For example, >10 million might seem okay for now. But as the market becomes more bullish, coins will hit the 10 million mark more easily, and you might need to change that condition to >20 million, etc..
You can use Dexscreener filters to find tokens that meet certain criteria.
Method #2: Follow smart money accumulation
Wallets that make consistent gains in certain areas are called “smart money”. They usually have an edge over you. They might be devs or have insider information etc.. You can find this smart money and track their trades.
Once you spot a pattern of buying or selling, you can predict whether a pump or dump is coming.
There are several ways to find smart money wallets. Our Double Your DeFi course explains them in more detail.
You can also track smart money wallets using free websites like DeBank or Blockchain Explorers. There are also paid versions, such as ChainEdge, Nansen, etc.
Method #3: Coins as monetizable culture
Some crypto coins correspond to most cultural phenomena, especially internet culture and American politics.
If you think any cultural phenomenon will be big, taking a position in the associated token might be smart.
When Elon announced Grok AI, I soon spotted the $GROK token in Dexscreener. At that moment, I knew that it was going to be big. And it went on to make 20x in the coming weeks. (
Similarly, there are tokens associated with both Joe Biden and Donald Trump. If either of them wins the election, the token associated with them will likely also increase.
Investing in tokens associated with major upcoming cultural events is a valid strategy.
Of course, there are other strategies, such as joining alpha groups on Telegram and Discord. However, I don’t really recommend that. Many of these group admins can dump on you.
Now what?
You have found a potential gem. What should you do next?
First, make sure that the contract is secure. You can use De.Fi/scanner to evaluate the token contract.
Second, look at the token distribution. Lots of tokens in only a few hands is bad. They can dump on you. But too many token holders is also bad for memecoins. >70 token holders for a token indicates that the token has reached its maximum number of holders.
Third, do the pumpamental analysis. Monitor the sentiment on Twitter. Who’s pumping it?
As of now, the Solana memecoin season seems to be slowing down.
And chatters about a memecoin season on Base are on the rise. If you want to degen into memecoins, try looking into tokens on both chains.
Radiant Capital is Cementing its Lead as the Best Omnichain Money Market With New Upgrades
Most lending protocols are limited to a single chain.
So, what if you could supply collateral on one chain and borrow on another chain?
Enter Radiant Capital. A cross-chain money market built on top of Layer Zero and Stargate.
The currently deployed version of the protocol, Radiant V2, lets you lend/borrow the most used assets from BNB, Arbitrum, and Ethereum. They’re the #2 biggest money market on Arbitrum and #3 on BNB, with over $300m TVL.
But why lock tokens in Radiant?
- Extra emissions on deposits and borrows (paid in the form of $RDNT).
- 85% of fees are distributed to users and paid in bluechips (Bitcoin, Ethereum, and Stables).
- Voting power for governance via the Radiant DAO.
Hold on, this is about to get even bigger. With the upcoming launch of v3, Radiant is going to introduce several new features:
- RIZ (Radiant Innovation Zone). Isolated markets for trending assets. This covers LSDs, AI, Gaming, RWAs, NFTs, and even memecoins.
- 1-click Leverage Strategies. They leverage cross-chain liquidity to do easy on-chain trading.
- Dual Emissions. Markets listed on the RIZ can emit extra tokens on top of $RDNT emissions.
Join the Future of Omnichain Lending
Solana is dominating transaction volume.
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The above chart shows the % of transactions on different chains. And Solana (green bars) is clearly dominating. Solana has been responsible for ~50% of transactions for several weeks.
There are several reasons for this:
- Cheap fees: Solana boasts transaction fees of <$0.005, significantly lower than other L1s
- Bot activity: This is a result of cheap fees. Solana’s transactions are said to have a much higher % of bot transactions. This isn’t necessarily a bad thing. Bots can add value to an ecosystem as well.
- Airdrop farming: There are several high-quality projects on Solana that haven’t released a token yet. Low fees on Solana make these projects attractive grounds for airdrop farming.
- Memecoin Mania: One of the biggest narratives of this quarter was Solana memecoins. It started with $BONK and has become a huge driver of Solana activity. We talked about this in the first article.
- Counting methodology. Different chains can have different definitions for transactions. In Solana, many of the infrastructure-related transactions, such as vote transactions, are included under transactions. This inflates the number of transactions on Solana.
Solana has become a massive ecosystem with its metas and narratives. Here are some of its top protocols.
- Jito is the Liquid Restaking Protocol of Solana. Their airdrop was a big catalyst in bringing attention and liquidity to Solana.
- Kamino is the biggest lending platform with >$1 billion in Total Value Locked. MarginFi is another notable competitor.
- Jupiter is the leading swap aggregator on Solana. They also have a perp platform. Raydium is the top dedicated DEX on Solna by TVL.
- They also have other novel projects such as Parcl, which is a platform for speculating on real estate prices.
However, high transactions are also exposing Solana’s flaws. Many users are complaining about failed transactions on Solana. And Solana monitoring services like Solana Beach confirm it.
Compared to Ethereum, Solana has a “move fast and break things” philosophy. They fix issues as they come up. So, the team will soon fix the issue of transactions failing.
While Solana has been hot for a while, there’s always the question of who’s next?
Next week, I’ll cover 3 ecosystems you should watch in Quarter 2.
🔍 Tools Spotlight
L2.watch: In the last newsletter, we talked about BTCfi. This website tracks all the BTC L2s. If you want to start researching the BTC L2 landscape, this is the best place to start.
Memecoin Monitor: This nifty little website lists most memecoins. You can filter memecoins by their blockchains, market caps, and categories, such as Dog-related, Political, Pepe, and more.
🚀 DeFi Catalysts
Metis has successfully completed the upgrade to a decentralized sequencer. It is the first Ethereum L2 to do so.
YearnFi launched V3 on the Ethereum mainnet. V3 claims to offer better automation, composability, and flexibility.
CatalystAMM launched the final testnet before the Catalyst mainnet. It has new features like multi-chain pools, instant-finality via solvers, and more.
Ton Foundation is going to launch a community rewards program worth over $115 million from April 1st. It will boost metrics and attract attention to the chain.
Immutable, Polygon Labs, and King River Capital are setting up a $100 Million Web3 gaming fund.
🪂 Airdrop Alpha
EtherFi launched its $ETHFI token. Those eligible for it can claim the token right now.
Polyhydra Network‘s airdrop is live. Eligible users can claim $ZK airdrop from the dedicated website.
Manta Network introduced the Manta Restaking Paradigm. Users can earn 2x rewards on EtherFi points until the end of May.
Velar, which aspires to be the liquidity protocol on Bitcoin, launched its points program.
UniLend Finance is airdroppping $UFT tokens to all $UFT stakers on the UniLend Finance v1 platform.
📰 Industry News
BlackRock introduced BUIDL, a tokenized RWA fund on Ethereum. It is fully backed by cash, U.S. Treasury bills, and repurchase agreements.
EigenLayer announced its multi-phased approach to the mainnet launch of EigenLayer and EigenDA.
Libre, the tokenization-specific ZK L2, is live. It’ll provide onchain access to tokenized funds from Brevan Howard and BlackRock.
Swell Network is building the L2 for restaking. Their tech stack is integrating with Polygon CDK, EigenDA, AltLayer, and Chainlink. The L2 should increase the value of the upcoming Swell token.
🧠 Twitter Alpha
- 10 important lessons from the market.
- Arthur Hayes on DCAing out of BTC
- Binance is making a huge comeback.
- Treat crypto like a game; you win by learning about the meta.
- Ether.fi drama behind the scenes
