In this episode, WuBlockchain dives into the AI memecoin investment trend and the recent surge of ACT, with guests Defioasis, Maodi, and Chen Yiyi sharing their experiences with ACT and similar cryptocurrencies. Within a week, Defioasis earned a 2 million RMB profit, while Maodi sold just before Binance listed ACT, missing a substantial opportunity. The discussion covers the market dynamics behind ACT’s rapid price increase, community engagement, token distribution, and how to assess memecoin potential and risk. The guests also explore their strategies, such as Defioasis’s long-term confidence in ACT, low-price accumulation tactics, and the lessons learned from taking losses on GOAT and ACT. Chen Yiyi provides further insights from on-chain data analysis on evaluating memecoins.

Disclaimer: The views expressed are those of the guests and do not represent WuBlockchain’s position. WuBlockchain does not endorse any product or token. Readers are advised to comply with local laws and regulations.

The audio transcript was generated by GPT, so there may be some inaccuracies. Please listen to the full podcast on:

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Why Buy ACT? Reasons for October Accumulation

Maodi:

Defioasis, having profited the most, can you walk us through what happened with ACT?

Defioasis:

(Summarizing from my Twitter post) ACT’s surge was an unexpected windfall. Until two days ago, I had buy orders at 0.021–0.022 on Bitget, just a week after my initial purchase on November 5. I thought ACT might rise with the AI meme trend, but I didn’t expect Binance to list it so soon, sparking a widespread rally.

Reflecting on why I bought ACT, it came down to a few key points:

1. Belief in the AI Meme Narrative: This year, WLD and TURBO were among the earliest and most notable AI meme tokens. TURBO was stable at a $3 million market cap for a long time after OKX listed it, offering ample entry time before it rose nearly 300x. WLD reached a peak FDV ranking among the top four, driven by the OpenAI narrative. The appeal of AI memes lies in the combination of fast-evolving AI technology in the wider tech scene and the meme’s viral trend in crypto, which creates a strong potential for growth.

2. Binance’s Perpetual Contract Launch for GOAT: Although I missed out on GOAT initially, Binance’s announcement of a GOAT perpetual contract on October 24 drew me back to AI memes. Binance has the ability to lead market trends, and the AI meme narrative has straightforward yet compelling appeal.

Toward the end of October, I created a watchlist of seven tokens, primarily AI meme coins: ai16z, degenai, ACT, LUCE, BAN, Shoggoth, and CB. My top picks were ai16z, ACT, or LUCE. These tokens shared several characteristics: clear narratives, unique concepts, and manageable market caps. ai16z presented itself as an AI agent-based fund manager DAO, ACT promised to break the “black box” of AI agents, BAN played on Sotheby’s banana meme, and LUCE was the Pope’s pet.

I initially entered ai16z at $0.025, ranking it above ACT, but its high volatility and limited liquidity led me to shift to the more stable and widely held ACT.

3. Framework for Selection, Inspired by Murad’s Insights:

Murad’s insights were helpful, emphasizing:

● A 70–80% retracement within a $20–30 million market cap;

● A broad, growing holder base;

● Support from influential community figures.

The growth in holders was particularly convincing. Initially, I doubted this metric, but after seeing ScopeScan’s data showing that rising holder counts correlated with a 65% win rate for memecoins, I prioritized ACT over ai16z. Furthermore, ACT had a secondary exchange listing on Bitget, unlike ai16z, which brought added liquidity and the potential involvement of market makers.

Finally, I align my personal strategy with alpha investments in sector leaders. My core holdings are ORDI and PENDLE Eco, which I have held without selling since last year. Throughout 2023, I made only small trades in memecoins to stay attuned to sector trends. This approach allows me to focus on tokens with a market cap around $20–30 million that demonstrate staying power.

Despite the luck involved — I didn’t expect Binance to list ACT so soon — I was prepared to hold for several months. However, my experience has shown that quality meme projects provide enough time for steady entry, and for me, the $20–30 million cap range is ideal, with a steadily growing holder base.

Chen Yiyi:

I was also exploring AI meme tokens. GOAT was the top pick in terms of narrative and community engagement, and ACT followed. While there were issues with ACT’s public perception, largely due to actions by AMP, the community interest remained high. When AMP announced a pause in token sales, I began accumulating, seeing this as a promising start, much like Defioasis.

Community Trust Crisis and Lessons from ACT Developer’s Token Sale

Maodi:

I took the opposite approach, becoming a “counterexample.” As Chen Yiyi started buying during the uncertainty over how much the developer might sell, I began selling off my ACT holdings.

My approach to the recent memecoin frenzy was a bit unconventional. I initially bought GOAT when its market cap was around $200–300 million, drawn in by its unique concept — something fresher than typical animal-themed meme projects. I didn’t base my decision on on-chain data; instead, I went with gut feeling, as Chen Yiyi suggested with the idea of “just feeling right.” When I noticed the appeal of GOAT’s “AI + meme” angle, I bought in. After a drop, I kept buying, and eventually, it surged to $600–700 million. Then Binance listed a contract, pushing it as high as $800–900 million.

For a memecoin, I thought a $1 billion valuation would be hard to break through. So, I started looking for the next project and noticed ACT, which was heavily influenced by a figure known as “the Wizard.” I learned that ACT was supposedly one of two AI projects backed by a16z. It seemed like a promising “top competitor” to GOAT. At the time, ACT was priced at around $0.03, while GOAT was at $0.07–0.08. I figured ACT should be at least one-tenth of GOAT’s value and began accumulating it.

However, an unexpected issue arose when the developer began selling tokens. Despite the community’s pleas to pause, they couldn’t reach him initially, and later he responded by saying he was attending his grandmother’s funeral. When he continued selling, I felt it was too much, so I liquidated all my ACT. Ironically, Chen Yiyi started buying at those lows, viewing the project as solid from an on-chain perspective.

Soon after, I couldn’t resist and started building a position again. My first reentry was around October 23, with ACT’s market cap at $30 million. By November 8, I sensed the AI and meme hype was cooling down and moved my funds. Unexpectedly, Binance listed ACT shortly after. So, despite my early involvement, I ended up taking losses twice by exiting.

Long-Term Logic for Holding ACT: Opportunities in Low-Cap Memecoins

Maodi:

I have a question for you both, who held on and profited. Before Binance listed ACT, why did you keep buying and accumulating?

Defioasis:

I tend to focus on memecoins in the $20–30 million range, which I find ideal for holding. Tokens that sustain this range often reflect a certain level of resilience.

The AMP token sale incident actually created an opportunity for ACT. I watched a video by Murad, where he mentioned that a good memecoin, even after volatile drops, can recover if it has the right dynamics. Such major fluctuations are usually tied to unique events. In ACT’s case, the AMP sell-off was chaotic but galvanized the community to rally behind the token, with the Wizard and others pushing back on social media.

Defioasis:

My perspective is that Binance’s introduction of GOAT futures showed it could open a new market segment. I am optimistic about AI’s potential within crypto since AI technology is advancing rapidly outside the space. Memecoins are currently one of the few lucrative areas in crypto, so this trend is unlikely to fade anytime soon.

The strong external investment in AI and AI technology, combined with the memecoin narrative, offers considerable growth potential. After Binance’s GOAT futures listing, I took a renewed interest in the AI memecoin space, seeing it as an important entry point.

Community Engagement and Token Distribution’s Role in ACT’s Support

Chen Yiyi:

Maodi’s perspective is fascinating — he could almost be a case study. GOAT had a relatively unproven niche, with FDV targets at only about 50% upside, yet Maodi still bought in and continued accumulating on dips. This demonstrated his strong instinct.

In my view, AI agents are one of the hottest narratives, drawing interest from VCs and major institutions. GOAT and ACT have established themselves as “category leader” and “top competitor” within AI memecoins. Community engagement is key, with both positive and negative discussions fueling continuous activity. This focus makes AI memecoins a promising niche within the meme sector, especially with the AI agent angle becoming a hot topic.

I also focus on token distribution. Many exchanges prefer decentralized control, avoiding projects that are too tightly controlled or that display extreme price movements. Before listing, they assess token dispersion and control, which affects market stability. I closely monitored AMP’s sell-offs and related addresses to gauge potential new entries. Despite some speculative behavior, AI memecoins remain a niche with substantial potential.

Defioasis:

On token-holder growth, I used to think it was easy to manipulate, but Murad highlighted that consistent growth in holder count is vital. With ACT, I saw its holder base was relatively large. Even after AMP’s sell-off, the count continued growing. This demonstrated the community’s vitality and its ability to sustain engagement, which was visible in the holder data.

Maodi:

It seems you both agree that ACT had the “top competitor” status before Binance’s listing. My hesitation came from seeing growth in GOAT, ACT, and other similar projects. I couldn’t tell which held the top positions.

ACT’s Position as the “top competitor” and Related Debates

Chen Yiyi:

While there are other projects like Octopus and GNON, the main players we keep hearing about in the community are ACT and GOAT. So, to me, they’re the real leaders in this space.

Maodi:

That’s true, but I sometimes wonder if I’m stuck in an “echo chamber” effect. When I held ACT, I kept getting related content on Twitter, reinforcing my view of its relevance. It made me question if the growth in data and community support actually meant success. I can point to projects like ARC-20 or Atomicals where increased activity didn’t necessarily lead to good results.

Chen Yiyi:

Yes, relying on surface data can be misleading. A better approach is to dive into the community and connect with the core builders to truly understand the project’s direction.

Before ACT’s Binance listing, many were still observing cautiously, without deeper insights into the community’s development. But now, after a 20x rise, it’s hit the mainstream.

Maodi:

There are times when you have to rely on instinct, not just data. Observing how core builders tackle challenges and bring in resources can be an excellent way to assess a project. For instance, when PEPE 2.0 was gaining traction with thousands of listeners and people urging for a dashboard, I could see a demand for projects with new narratives. In this case, a16z-backed ACT, with a GOAT-like narrative but at a lower market cap, has a strong market position.

Defioasis:

I agree overall.

Maodi:

You mentioned PEPE 2.0 — do you think ACT will follow a similar trajectory?

Chen Yiyi:

With Binance listing ACT, it’s already heading that way. Many people have profited.

Maodi:

Do you think it can reach a market cap of $6–7 billion, or will it take time?

Chen Yiyi:

It’ll need time and a lot of trading volume. In the short term, it might have room to climb further, at least up to GOAT’s previous high.

Defioasis:

We’ll have to wait and see. Comparing it to PEPE might be premature — Nerio could be a better reference point, with its $1 billion market cap. Given ACT’s current $500 million valuation, it might be a bit overvalued short-term.

Risks of Memecoins and Strategies for Choosing Projects

Maodi:

Today’s discussion isn’t to promote ACT but to highlight the high risks of investing in memecoins. I’m an example of how a 20x gain can turn into losses, showing the risks involved. If you were to pick a new project like ACT, what factors would you consider? Let’s start with Defioasis.

Defioasis:

I’d still look within the $20–30 million market cap range, focusing on a few key criteria. First, if a project has experienced big drops but survived and remains stable in this range, it’s likely to be resilient. Second, I monitor exchange listings, like Binance’s GOAT futures, which drew my attention back to AI memecoins. Binance has the clout to lead new trends, so I prioritize their selections.

Secondary exchange listings are also significant signals. Such exchanges offer valuable exposure, and their staff often move to primary exchanges, potentially transferring insights and connections.

Lastly, I look at the overall industry trends. AI remains the hottest sector. AI memecoins started with Worldcoin, evolved with GPT-4’s Turbo, and are now advancing with AI agent narratives. This progression mirrors the rapid development in AI.

Chen Yiyi:

Defioasis shared great insights into his coin selection criteria and the future of AI memecoins. I’d add that a strong narrative is key, as is understanding the distribution of traffic. Engaging with influential voices and key opinion leaders (KOLs) can boost a project significantly, as their influence spreads across communities and holders. Being close to such figures and key traffic sources is important.

Defioasis’s approach of reentering a project after a price correction is also solid, especially if the project has staying power in its niche. For new projects, I focus on those with an FDV around $3 million, exiting after a rally. For more stable investments, I follow Defioasis’s method of gradually accumulating tokens in the $10–20 million FDV range instead of going all in at once.

I avoid chasing high prices. With new projects like GOAT, BAN, LUCE, ACT, Moondeng, and NEIRO emerging every few days, I question if there’s enough market support for sustained growth.

Given Binance’s recent listings of Nerio and ACT, I suspect Binance may be developing a listing strategy targeting projects within this valuation range.

Defioasis:

That’s why I believe memecoins with a $20–30 million market cap have unique potential. Projects that withstand heavy dips often gain greater speculation value and appeal to exchanges that prefer tokens with a history of multiple rounds of redistribution.

Maodi:

Thanks for listening to today’s podcast. Remember, this is not investment advice. We discussed ACT’s recent 20x surge purely as personal stories. Please invest cautiously, especially in high-risk areas like memecoins.

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