Five years ago, when my friend Chen Lei's story spread in the community, many only saw that bottle of Lafite by the beach in Sanya—assets skyrocketing from 150,000 to 4.5 million, and the myth of wealth creation through Ethereum seemed within reach. But as someone who witnessed his ups and downs firsthand, I have always felt that the real story begins after the fall from the peak.
1. Carnival and Collapse: A 'Stress Test' of Cognition
Chen Lei once firmly believed that 'trend is truth' until the DAO governance token evaporated 600,000 within a week, waking him up completely: the market rewards not courage, but the thickness of cognition. Those projects that even plagiarize white papers can harvest countless followers through narratives—this reminds me of the tuition I paid in my early days: blindly chasing the 'alpha' of Twitter KOLs, only to become the liquidity harvested by others.
Chen Lei's principle of 'no understanding, no investment' is essentially armor against information asymmetry. I will go further: every project must pass the 'three questions test'—does the technology solve a real problem? Can the team background withstand on-chain scrutiny? Is community discussion a bubble or consensus? This can filter out 90% of traps.
2. Asset allocation: the transformation from gambler to chess player
Chen Lei's 55% (BTC/ETH) + 20% (Layer 2) + 15% (arbitrage) + 10% (cash) allocation seems bland, but in reality, it is rationality earned through blood. I have seen too many people treat altcoins like a lottery, forgetting that a bull market is a generous benefactor, while a bear market is a mirror exposing reality.
My allocation logic emphasizes 'on-chain identity':
Core position (60%): only invest in assets that have passed two rounds of cyclical tests (such as BTC, ETH), their value lies not in the fantasy of hundredfold returns, but in becoming asset anchors;
Opportunity position (30%): allocated to Layer 2 and DeFi protocols with real ecological data, such as projects with cross-chain bridge trading volume increasing for six consecutive months;
Cash position (10%): not only stablecoins but also 'crisis ammunition' for reverse arbitrage during black swan events.
3. Leverage: seemingly a shortcut, but actually a noose
Chen Lei's story of getting liquidated with 15x leverage gives me chills—because the same script is being replayed every day. The essence of leverage is to magnify emotions, not returns. When market volatility exceeds 30%, the survival rate of high-leverage accounts is less than 5%.
My own iron rule is:
Never fully invest in a single asset to avoid becoming a 'forced seller' (forced to liquidate);
Control leverage within 3% of net assets, so that even if it goes to zero, it won't affect life;
Regularly withdraw profits to turn 'paper wealth' into numbers in the bank account.
4. Information battlefield: look less at prices, read more data
Chen Lei sensed the signs of the FTT crash in advance from on-chain capital flows, which is the value of data thinking. I often tell the team: 'KOLs trade with their mouths, we trade with on-chain footprints.' For example:
Monitoring the stablecoin flow of whale addresses often predicts direction three days earlier than the news;
If the protocol's TVL (Total Value Locked) suddenly drops by more than 20%, immediately trigger risk control checks;
The social media sentiment index (such as the fear/greed index) becoming increasingly extreme greatly increases the probability of being a contrarian indicator.
5. Ultimate goal: from 'getting rich' to 'survival'
Now Chen Lei is reviewing on-chain data at a guesthouse in Yangshuo, pursuing an 18% annualized return with more composure than when he raised Lafite back in the day. This makes me think of the essence of the crypto market: it does not create wealth, it only transfers wealth. The real winners are not the lucky ones who hit a hundredfold coin, but the 'survivors' who lived through three rounds of bull and bear markets.
My annualized target is also anchored at 15%-20%, but the path to achieve it is DeFi staking + cyclical rotation:
Dollar-cost averaging in a bear market: gradually building positions near the BTC mining cost line;
Taking profits in batches during a bull market: reduce holdings by 10% for every 50% increase, keeping the base position to ride out the cycle;
Ignore the noise: do not participate in the MEME coin frenzy, do not chase the 'last chance'.
Written at the end
Five years ago, Chen Lei believed that code could reconstruct wealth; now he understands that the only thing that needs reconstruction is his perception of risk. Recently, he told me by the Li River: 'The number in the account balance will fluctuate, but on-chain data does not lie—just like mountains and rivers, there are rules to their rise and fall.'
Perhaps this is the final destination of the crypto analyst: from a fascination with the starry sky to a reverence for the soil. Our job is merely to help more people find a stable path between the two.
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