Driving Ecosystem Growth in Web3

Recorded in the Hodl Up studio, with Jake joining remotely.

Hodl Up: What makes a good crypto project a good crypto project?

Hodl Up: Tokenomics. You keep killing me with these questions at the beginning of the episode. Give me time to breathe, man. Okay, let me take a couple of seconds. It's probably tokenomics. It depends on the purpose of the token in the project, because for memecoins you don't need any of that. But I'm talking about the general idea.

Hodl Up: Think of memecoins in 2021. They all had a white paper.

Hodl Up: Yes. The PDF white paper.

Hodl Up: PDF white papers, and they'd all have some sort of gaming beta plan, the metaverse, remember? And then an NFT collection for early holders, stuff like that.

Hodl Up: Do you also remember the grammatical mistakes? That was one of the ways to tell whether it was going to rug or not.

Hodl Up: Yeah, before we had all these GMGN tools to tell you whether you were going to get rugged. But I miss that time.

Hodl Up: I miss it as well, because they were simpler times. You could tell there was a bit of effort, and not just in developing the token, because there was no pump.fun where you just click a button and launch a token. You had to know the programming language for that specific chain, or pay someone to do it for you, which meant it was harder to launch a token.

Hodl Up: And then these developers would go on to make websites and PDF decks with the roadmap, the white paper, and so on. So even if I got rugged at the end of the day, it still showed me they'd put some effort into it.

Hodl Up: A few hours.

Hodl Up: I'm not promoting rugging or anything like that. I'm just saying that even getting rugged felt a bit better.

Hodl Up: You got the adrenaline rush, because you made the investment believing in it.

Hodl Up: But today you see a funny name and a token allocation, and that's basically all you need. They don't even have a website. They have a link to a TikTok video that went viral, for example, or a community on X, which anyone can open. It's crazy. I think this is value extraction at its finest, because if we dive deeper, most of the memecoins that have taken off over the past 15 months or so, not only the successful ones but even the rugs that had their ride and reached the millions, can probably be traced back to about a hundred people. That's the cabal everyone talks about, the Illuminati of the space, and I think it's the cancer of the space as well. Maybe a lot of people made money, but that's value extraction at its finest. I'm not against memecoins. I'm a degen in the way I trade them, and I'm going to keep trading them. That's basically gambling at this point, but still. I'm just never going to get used to a few people front-running the whole show, slowly draining liquidity out of the market, letting those coins bleed out, then buying back in lower so it pumps, with all the speculation and hype. Because I also love altcoins. I also love builders. That's what I've been trying to tell everyone with these episodes. I know the potential this industry has. I'm not technical, and I know I keep mentioning that, don't I? But I know the way memecoins are going right now is so unsustainable that it could mess up the whole industry.

Hodl Up: And we'll probably be left with only Bitcoin, Ethereum, Solana, and that's it.

Hodl Up: And that's not how I envisioned the future of crypto back in 2020 and 2021. Value extraction is what's killing me right now. Anyway, today we have a guest.

Hodl Up: Yes, we do.

Hodl Up: And he specializes in growth.

Hodl Up: Yes, he does.

Hodl Up: And he's probably here to answer some of the questions we have about these specific issues.

Hodl Up: Yes, he will. May we join the call?

Hodl Up: Yes, we may. Hallelujah.

Hodl Up: Hello, Jake. How are you?

Jake: I'm good, man. How are you? Thanks for having me.

Hodl Up: Good, good. We appreciate you finding the time to join us for this episode. Dren and I were talking earlier about what makes a good project a good project, the whole journey, in terms of both the community and the back-end stuff. We're really excited to have you, and to have someone from Magnet, because we like what you've been doing for other companies. You came up with the Magnet Method, which has proven quite useful for Web3 projects. But before we go into the details, I want to hear a bit about your origin story: how you started in crypto and how you transitioned into what you're doing now. I know you joined during the ICO boom in 2017, if I'm not mistaken, so feel free to talk about that.

Jake: For sure, man. I think my first real experience with crypto was when I had my first business. Famously, I've never had a job. I've only ever tried to run my own stuff. When I was 17, I set up my first proper company, and the first few years went quite well. I dropped out of university to pursue that business and moved to London, and the guy living below me was a crypto influencer. This was in 2017, I believe. He was super bullish on crypto and knew so much about it, and what he's gone on to do in the space since shows how deep in the loop he was from the beginning. Being friends with him, he was always saying, "These coins are going to do well, this is going to do well," and that kind of got me in. My first company was in financial education, so I knew about crypto from there, and I'd bought crypto before I met him, but he's the one who really pushed me from buying normie cryptos, which I did in my first year at university, to really exploring the space. I ran that company for four to five years. It didn't work out in the end, but it's the best education I've ever had. After that I thought, "Okay, it's time. Roll up the sleeves. 2021, full-time in crypto. Let's get it." And that's pretty much it.

Hodl Up: The thing about joining crypto, especially in 2017, is that you probably got scammed quite a lot. I joined in 2020 or 2021, and it was crazy, because there's not enough education, in my opinion. Do you remember any instances of losing a lot of money because of, say, a wrong URL? Personally, I bought into an NFT mint a day before the mint was actually live, because I didn't even check the link. I wasn't educated. That was back in 2021. Did anything like that happen to you? And why do you think it happens? Is it about education, being informed about what scams are out there? Because crypto is a whole different ball game compared to other industries.

Jake: To be honest, man, I probably have a different opinion here, which is that there are more scams in crypto today than there were back then. What I mean is the number of tokens. In 2021 there were around 420,000 to 430,000 tokens in circulation. Now there are millions of tokens launched every month, and it's just not possible to create millions of sustainable tokens a month. At least the tokens back then, even if they were complete garbage, had concentrated liquidity. You could get into a project, then everyone would find out about it, and it's not like 10,000 projects were being shilled at once, which is the case today. Back then, a very limited number of projects would be "the next big thing," and they'd go a thousand x. So even if it was a scam, you could still make money if the marketing and storytelling were good. I'd say you're more likely to get scammed now, especially with how easy it is to launch a token through all the launchpads out there. Obviously pump.fun played a huge part in this. It's much easier for the everyday person to launch a token now, compared to 2017, when you had to have real knowledge of blockchain technology and know what you were doing.

In terms of general scams too, scammers are getting more sophisticated. Let's not forget the Bybit hack earlier this year. If you look at the on-chain data on the volume and value of scams this year, we've seen all-time highs in different areas. So whenever you're a newbie getting into crypto, whether in 2017 or now, there will always be risks, like clicking the wrong links or not doing proper due diligence. But in terms of the overall scam landscape, whether it's projects being extractive or actual scammers trying to hack away at things, it's more prevalent now than it was back then.

Hodl Up: Since you mentioned pump.fun, I want to touch on that. I work in marketing, and I joined the market, as I said, about five years ago. Back then it was much easier to find money: to find investors, to find traders for your project. Nowadays, in my opinion, and according to statistics I checked recently, it's really hard, especially for real builders, say infrastructure projects, to get users. So do you think this memecoin supercycle, even though people are losing a lot of money, is the value extraction happening in the industry right now? And is that why big projects coming into the space with a lot of VC investment aren't performing well after launch?

Jake: In my opinion, there's not the right value exchange in crypto. What I mean is that the people who really sit down and try to build something are often the ones who don't get rewarded. It's the people who come and play the game, who know how to launch a memecoin, bundle it, control the supply, pump it, and sell into the chart. Those are the people who've made a lot of money in the last 12 to 18 months. I'm not completely against memecoins, because they are culture in Web3. If it's a real memecoin project, its utility is almost the culture and community it nurtures, what it stands for, the lore, things like that. So there's definitely a place for memecoins. But as we know, the majority of memecoins that launch are never going to go anywhere. They're scams. Plus, unless you have a lot of money behind you, it's very hard to actually make a memecoin take off. So even builders who come in wanting to create a culture for the right reasons, not looking to rug, still might not make that memecoin a success. It's a very hard thing to do, especially when liquidity is everywhere, because everyone's trying to pull it in.

The problem we have is that, back in the day, all the liquidity was on Ethereum. Now we have multiple big chains, and liquidity moves between them. You see it all the time with the next hot thing, as we've seen a few times in previous years. I don't want to name names, because I respect chains for trying to build things, so I don't want to call anyone out, but there are chains that had a lot of liquidity and TVL on them, and then those people moved it onto the next big chain, and the next one, and anyone building in that ecosystem is left paying the price. So there's a lot of what I call fragmented liquidity, which makes it very hard for builders to gain attention.

The other thing is that there are so many shiny objects that it's very hard to know where to put your capital. Are you going to be a trenches player and go fully into memes? Could alts take off again? Is there a new ecosystem to put my money in? Base is doing well, let me go over there. Or this is the next big thing. There's too much. Back in the day that wasn't the case. Liquidity was mainly in one place, and on top of that there were few options. Now there are millions of different digital assets people can buy, and retail inflows are slowing down. The biggest inflows are coming from institutions, and as we've seen, that's going into the top end of the market. So a lot of smaller builders trying to bring something unique to the space will struggle to attract any of that liquidity, because institutions don't yet have the means to invest in them. There's a gap, and I think it'll get bigger and bigger between the top end of the market and the rest. We've seen it with the market cap added to Bitcoin, Ethereum, and Solana in the past few months. The alt market hasn't seen that. Normally Ethereum pumps, and then you see heavy rotation into altcoins. We might still see that. But maybe the reason we haven't seen it like in previous cycles is that the money pumping the top end of the market isn't going to recycle, because it's institutional money. Don't get me wrong, there will be some recycling, because retail also holds these Bitcoins and will fund the rest of the market. But a lot of the driving forces right now are on a scale much bigger than we've ever seen. I know I've rabbited on a bit there, apologies.

Hodl Up: I fully agree with you. I remember four or five years ago, if you wanted to launch a token, you had to pay quite a lot of money to someone who knew the programming language, say Solidity. And one of the biggest complaints from people not yet onboarded into crypto was that the barrier to entry was too complicated. It was a bit difficult to join. But now pump.fun, for example, has completely removed that barrier, and anyone can launch a token. They don't need to know anything about tokenomics, or about crypto at all. This could be my nostalgia bias, because I like the 2021 cycle more than this recent one, but I'd prefer a slightly higher barrier to entry than there is today, because right now it's letting any type of actor into this industry. And as you said, from a business development perspective, it makes things pretty difficult, because money may be flowing into the market, but it's being dispersed across the millions of tokens launching every day. So my question is: do you think the barrier to entry should be a bit higher, or is it fine the way we're going?

Jake: The first thing is how you'd put a barrier to entry in place. That could be regulation, for example. I'm an advocate for tighter regulation in crypto to prevent certain activities that are currently going under the radar, extracting value and taking it away from the market. But at the same time, you need to find a balance that still lets proper builders and projects operate in a sandbox. If every project faces a huge barrier to entry that takes a lot of time and money to get through, then a real builder who doesn't have that money yet, but means well for the market, won't be able to come to market at all, because the barrier is too big. One great thing about crypto is being able to launch assets in digital form with such a low barrier, whereas traditional financial assets obviously have huge barriers. The rise of this internet capital markets era wouldn't be possible without lower barriers to entry and a kind of participation we haven't seen before. So there's a balance. I think we need better frameworks to cut out extractors, but I don't think the barriers to entry need to suddenly become super high, because that would also stop real builders from coming through and building projects.

Hodl Up: Just a few weeks back, Dren and I had this exact conversation, and we were on totally opposite sides. Personally, I like pump.fun as a website, as a project, and for what it brought to the industry, but I don't like how it evolved. As we said, the barrier to entry is so low that anyone can get in. While we're recording this episode, I could launch five, 10, or 100 tokens, one of them might go up, I hold 5% of the supply, sell it all, and rug the community. But I think that as an industry we're still so early that we need projects and tools like this to stress-test the industry and see where it goes. Without pump.fun, how would we know that Solana can handle so many transactions and so many users?

Jake: Yeah, I guess there are two sides to the story. pump.fun did Solana a lot of justice, for the reasons you mentioned. Solana had a lot of scrutiny in the early days about not being able to handle that kind of throughput, and they proved it could with the whole memecoin cycle. But at the same time, from pump.fun's position as a business, what was their actual objective? If it was to be a launchpad for builders to bring value to crypto, then they completely failed their mission, because if you look at the number of projects launched through pump.fun that have added value to the space, you could probably count them on one hand. Millions of tokens were launched through pump.fun, and they carry on. They're still here today, still enabling this to happen, even though they know full well it's taking from the space right now. If they'd said, "Okay, this isn't actually what we wanted; we wanted to build something valuable for the space," then why haven't things changed? They have done product development. They launched PumpSwap, for example, but that just puts more money in their pockets. Where's the development that puts more focus on letting people use the launchpad for good? The second thing they did was launch a token. There was absolutely no need for a token. You've already made hundreds of millions of dollars. Why take more money from the space? What are you going to do with it?

Everyone has their own opinion, and that's mine. When pump.fun first came to market, it could have gone really well, or not. But I don't feel they've taken responsibility for what the platform ended up being, which I would have liked them to do: "Okay, how do we change this so more projects that are actually valuable to the space launch through pump.fun? How do we prevent rugging? How do we prevent extractors?" I haven't really seen that. Maybe we'll see it in the future. I'm not going to write them off completely; we might see different features that address it. But the features we have seen haven't fixed any of the problems identified with their initial product, if that makes sense. With the brand and name they have in the market, and the technology they've already built, I'd like to think they can steer it towards adding some real value to the space. But time will tell, and again, this is just my opinion.

Hodl Up: Personally, I never believed in Solana last cycle, by the way, because it just kept going down. I remember it crashing seven times, and the eighth time, I think in 2023 or 2024, I told all my friends, even Dren here, who's a big Solana advocate, a Solana maxi: "It's done for. Ethereum is going to take over the market again." But then pump.fun entered the industry and ran this huge stress test, and I was amazed. I'm still amazed by what Solana can do.

Jake: I think what the pump.fun guys have been doing, their whole mission, is just businessmen doing business at the end of the day, because they built a phenomenal revenue-generating business. That's the credit you can give them; they absolutely nailed it. But, as I mentioned, there are definitely questions about the value it adds to the space, and about what problems it might have caused. Like I said, I still think there's an opportunity for them to turn this around and develop pump.fun into something else. But it's in the name, right? Pump.fun. At the end of the day, it's a bit of fun. They probably didn't set out to build a really serious builder launchpad. And there are many launchpads that are more on the serious, utility end of the scale that have never achieved a fraction of pump.fun's success. pump.fun can just say, "Well, if we're doing all this wrong, why do we have so many users? Why do so many people use us?" They've built a product people want to use at the end of the day. So there's that side of the story too; there are always two sides to every story. They're a launchpad that gained huge traction over others who tried to build launchpads just like it and never reached their level. Maybe that's because they serve users' interests in this space better than other launchpads have. So in my opinion, I'd like to see them try to deliver tangible results in terms of the number of good projects that come out of the launchpad and add value to the space. But are they already adding value because of the number of users on their platform? Who knows?

Hodl Up: In my opinion, there are two ways to judge whether an innovation is good. The first is to look at the metrics, and in pump.fun's case it ticks all the boxes. The other is to look at the intangible value it brings. As an innovation, what did pump.fun bring to the industry? Just more memecoins and more token launchpads. That's what I've observed so far. So my point is that we shouldn't judge these products or innovations only by what they bring statistically.

Now I want to pivot a bit to what you've been doing at Magnet. I believe you've run into this issue as well, with clients or projects you've worked with that didn't perform in terms of statistics. How do you convince them that it's not the end of the world, that having an organic community is better than having the hottest trending token on DEX Screener, for example?

Jake: For me, and I actually put this out yesterday: when I published the Magnet Method, which is a five-step growth framework for crypto, the five steps were marketing-led growth, product-led growth, business growth, token-led or asset-led growth, and community-led growth. You have to have all five. When we saw memecoins rise, there was no product growth, because there wasn't a product, and there was no real business growth, because they weren't trying to scale a business. There were only the other three sides: marketing, the token, and the community. You could still adapt the frameworks within those three levels of growth for a meme project, but that's not how I think you create real sustainability over time. It has to revolve around actually building a product that does something in this market.

The perfect example right now is Hyperliquid, because they built a product with such clear product-market fit. What they did so brilliantly is that the success of their product puts money directly back into token holders' hands through their 97% buyback, which took them from TGE to a $13 billion market cap within eight months. They're one of very few projects that went out, got solid product-market fit, started generating revenue, then launched their token and started benefiting holders. A lot of projects do it the other way around: they launch the token and then try to work something out. The problem is that if you have no sustainable buying pressure coming into your market through your product at launch, all you'll end up with is selling pressure, and the only buying pressure you can bring is based on speculation and hype. That's not sustainable. You have to have buying pressure coming from actual utility. We've heard that word so many times, but you really do need it if you want to defend yourself across different market conditions. Otherwise you're just depending on speculation and hype.

The crazy thing is that nobody really wanted to listen when I wrote about this 18 months ago and then published a book earlier this year. But now look at probably the hottest project and name of this cycle. I'm not saying they've read the Magnet Method, they probably haven't, but the point is that they've covered every angle of growth. And that's the second thing: a lot of founders believe the product, the business, and the token are separate things. That's completely untrue. Each should benefit the others, building an ecosystem. And the final belief we're always tackling at Magnet is that a lot of people think marketing will fix everything, that marketing is growth. Marketing is not growth. You can drive the craziest awareness in the world, but that doesn't mean people will actually want to use your product and stick with it. It doesn't mean people will want to buy your token, because you might have terrible on-chain data that makes it an unattractive place to operate and hold. So there are many other things to consider. Marketing is very important for growth because it fuels the top of the funnel, but it's not everything. The token is the greatest growth asset, because you can leverage network effects and viral growth off the back of it. And, like I said, I think product will play a really important role in the future of building sustainable tokens in the alt market.

Hodl Up: That sounds really simple as steps on paper, but how easy is it in today's market? I don't think it's ever been this chaotic, even with investors, angels, VCs, everyone. Even projects with a really solid product and product-market fit, that have everything: how do they get users? How do they get their name out there without being overshadowed by the hype? Let's say I have a project today. I've been building it for three years, and I start pushing, investing in marketing and everything, but the next week another pump.fun alternative goes live and there are billions in volume flying around. As a founder, and this is just a tip for any founders who might be listening, how do they overcome that?

Jake: I'd say this, and again I'll use Hyperliquid as an example. What Hyperliquid also did was build their own distribution channels. Their founders had their own audiences, and they put the time into nurturing them. If you're a project right now, you might want to try to bring on someone who already has an audience and give them some form of incentive in the project. It's doable. Then you have enough organic distribution to fill that early community. You put a product in their hands that they start using and quite like, and then you create the lore that there might be an airdrop at a later date, so they keep using it. You gamify the use of the product. You listen to the feedback and keep refining the product, so that when they do get the airdrop, they don't just dump it and disappear; they're already using it.

This is what Hyperliquid did so well. After Hyperliquid's TGE, anyone who dumped HYPE got wrecked, because they had a sustainable model that kept pushing the token price up, and people were happy to keep holding it because they knew how good and how sticky the platform was. What you get from this, as a user, is that you're on the platform and you talk about it, maybe because you like it, maybe because of the lore that there could be an airdrop. And as a project, it's very important to have a way to sustainably mitigate the selling pressure from that airdrop. From HYPE's perspective, they could look at it and say, "Okay, the platform is already generating X amount of revenue. If we put that back into the token, and we look at the potential selling pressure from the airdrop we're giving out, does the revenue buyback match the potential selling pressure, so we can hold our chart?" And like I said, because of the strength of the token, people still hold the airdrop they received, because it's become that kind of asset.

So I guess that's the next stage. Don't just offer an airdrop. Think it through logically. If everyone sells this airdrop, will you be able to bring enough buying pressure, based on the sustainability of your model, to at least reach equilibrium and prevent your token from going down? Because everyone in this space knows that if your token is 70 or 80% down, it doesn't matter how good what you've built is; no one's going to listen. In this space, users have a vested interest in projects. They rarely use something just because it's good. It does happen, but often they use something because they hold the token. They're believers. And when you have that, that's how you activate a network effect, because these people have a vested interest. They love the product, and they're capturing value by holding the token, because you've supported a healthy market by thinking it through. So they keep talking about it, and that creates your future awareness. You don't need to go out and spend all this money on KOLs and so on. If you do these things, KOLs will talk about you for free, because you're performing. They all talk about HYPE, and HYPE doesn't pay any of them, because they built something worth talking about.

I know it sounds much simpler than it is, but that's literally what it comes down to, and it takes a lot of time. The problem in crypto is that getting this process right takes a lot of time and resources, while people around you are launching a coin and making a million dollars in a month. You think, "Why would I go on this journey of building something sustainable that could take years, with no guarantee it'll be successful, when I could just launch a memecoin, put my time into that, make good money, and buy a Lambo?" That's the problem. A lot of good builders who come into this space get corrupted, because they see that "this guy isn't as smart as me. I spent two years building something proper, and he's made 10 times my income just by launching a memecoin. I'm going to do that." That's another big problem. So building something sustainable the way I described is possible. We've seen it play out recently, and I've given you an example, but it takes a lot of time. Hyperliquid launched a couple of years ago, and right now they're getting all the headlines. So it's a story of persistence, of belief, of not being corrupted, and of giving it a good crack.

Hodl Up: I agree with everything you just said. But I have another related question. Do you think the average crypto user's behavior has changed over the years? When I think about it, a decade ago people who joined crypto maybe weren't in it just for the money, because who would have thought, in 2012, that if you invested in Bitcoin it would eventually reach $100,000 per Bitcoin? People joined because of Satoshi's vision and what the crypto movement represented. Even last cycle, I would join NFT communities three months before the mint, because I wanted to be part of that community. I internalized every single project I invested in. But today I've found myself doing this too: joining testnets and participating in ecosystems just because I knew I might get an airdrop once the token went live, not because I cared about what the company represented or what the product actually was. So do you think user behavior in general has changed, and why?

Jake: When you look at user behavior, something I want to mention is that everyone always talks about the next million users in crypto, the next 100 million users. What's talked about less is that, in my opinion, the majority of these users are going to be agentic. So as a crypto project, it's important to build technology in a way that agents can understand, process, and get value from. What I'm saying is that you'll have different markets. You've got an agentic market that's rising rapidly, especially looking down the line. You've got the Web2 market, which, as we've always said, will use applications without knowing they're interacting with the blockchain. And then you've got the Web3 people, the trenches players. Every type of user has different aims in how they'll use this technology and what value they're trying to get from it.

A Web3 user is probably very similar to your mindset, mate: "I like this space. I believe in it. I'm going to use this, and I also know I'll get a benefit from it." That's completely fine. Do your thing. I find myself doing the same, and it's cool. We're just intelligently putting our time where we can get more than one stream of value. Then there's the Web2 side, and very few have managed to crack this yet: setting everything else aside and just building something awesome on a Web3 stack that everyday people will use. And then there's the agentic side, which is about building things like APIs so agents can interact with different platforms, draw value from them, and use them. I always look at it as those three segments. You can be as expansive as you want there. But to answer your question, I think it's always been the case that crypto users want some form of reward, whether through participating for an airdrop or holding a bag and being active in a community, working for their bag to get a result. Web2 users just use an application they'll get value from, regardless of the technology behind it. And then there's the agentic segment, which I think is going to be a big part of this space's future.

Hodl Up: Now I have to answer Dren as well. I know you're the guest, Jake, but I'm going to act as a guest for a moment. Back in 2021 I had that same mindset, and unfortunately I still have it for some projects. In June 2021, I put quite a big bag into a project. I don't want to name it, because I still like them, but they're not performing. It did a 15x, and at the time that bag was huge for me. But I loved the project so much, and I would have felt so bad selling, that I didn't sell. I thought, "Okay, I'm going to stick with them. They'll keep building and performing." Their token had perfect tokenomics, and it still does; they didn't change the tokenomics. What they did was not invest in marketing at all. I think they just got too comfortable. But let's not get into it. What I'm trying to say is that I lost that money, and now it's about 50% below the price I bought at in 2021. Four years of holding, and I'm 50% down.

And now my mindset has changed. Now I think about how I'm going to find the next 100x. I think most people trading crypto right now are thinking the same thing, because they see the TikToks. Let's be honest: we're young people. On TikTok, everyone's living a lavish lifestyle. Maybe they're faking it, I don't know. But something in your head says, "Okay, no, I'm going to chase the 100x." And I think that's a really big factor that disincentivizes people from building real things. Of course, that's why I respect builders, because they overcome this basic flaw of the human brain.

Jake: You have to have life experience. Honestly, I always say this: if I'd come into crypto as my first business, I would be that dude. I'd 100% be that dude. But I did all that when I was younger, man. I'd still like to say I'm young; I'm 27. But when I was 19 or 20, I was driving around in supercars and living in luxury penthouse apartments in London, and I thought that's what success was. In the society I grew up in, we'd look at people with a big house or really fancy cars and think, "They're successful." I didn't really understand how deep the meaning of success was until I got a little taste of it. I was never crypto-rich, but I had enough of a taste to realize that this isn't actually what life is about. It's nice to have nice things, and it still is today, but that can't be your sole driving factor, or life gets pretty soulless.

A lot of the people you're referring to are younger guys who've made a load of money and think that's the coolest thing ever. That's great, but in a few years they'll probably look at themselves and realize they wouldn't have made certain decisions they made to get that money. If you earn really honest money, not by rugging people or launching loads of coins, and you want to go buy those things, do your thing. But you'll still probably realize there's a greater meaning to your life. Like I said, that's not to say you can't have nice things. You can. But I learned that can't be the number one driving factor. Other things come before that, and that has a big influence on how you approach building. That's why I haven't gone out and launched tokens for my own projects, or launched memecoins, because, let's be honest, I have the skill set and the resources at Magnet. In the last year, I could have launched coin after coin and made loads of money. And I know what the outcome of that is: "Okay, I now have a better car in my driveway." What does that bring to my life? So what's the bigger thing? Building a growth engine for Web3 that will power the next generation of the internet. That will bring me more satisfaction and gratification than a Lambo.

Hodl Up: I love this mindset. I think it's the mindset every single builder in this space should have, but it's going to be hard to get there.

Jake: You have to learn it.

Hodl Up: And that's the issue, because most people won't be...

Jake: Sorry, I was just going to add that when I was younger, I had a business mentor who was a very successful guy. He'd just sold his company for 250 million. He saw something in me when I was 19 or 20, and he told me, "Don't buy that car. Don't spend money on these nights out. Dial in. You've got something good here. I'm going to give you my time and help you get there. Avoid my mistakes." And I was like, "Nah, I'm all good, man. I've got this game unlocked, just because I've made some money." I said, "Sure, advise me," but in the back of my head I was thinking, "You're telling me not to buy that car? Dude, I'm buying that car. You can't tell me not to. I deserve it. I've worked hard." And I didn't really understand what any of those things meant. Like I said, you can read it in books or hear it on podcasts, but until you feel it in real life, that's when everything changes.

That's why a lot of people come into this space with a very good moral compass and ethics, trying to do well, and sometimes it doesn't work out. That's part of being an entrepreneur. I've had many things that didn't work out, even though I really wanted them to work out and add value for people. It just didn't happen that way, but I know I did it for the right reasons. At the same time, until you physically feel it, it's very hard not to get distracted. Someone might say, "Don't do that, because money isn't everything. Stay on your building path and believe you'll get the long-term reward when you earn it properly." It's very easy to say and to listen to, but once you've been through it and felt it, you can say no to things a bit more easily.

Hodl Up: That applies to everything, not just business. Unless you experience things yourself, there's no other way to learn. As you said, we can do podcasts all day, but at the end of the day you'll have to get scammed yourself to learn not to click that URL, for example. Now I want to ask you something else, because Atis and I have both worked for Web3 startups in the past, and we've seen how different the environment inside a startup feels in a bull market versus a bear market. In a bull market everything is euphoric, and you get all these promises from founders and CEOs. Then the bear market hits. In the last bear market, after FTX, there were a lot of reasons for FUD and fear in the market, and a lot of builders got cold feet about the entire industry. They didn't want anything to do with crypto anymore because of how big the fall was, because the higher you climb, the bigger the fall. I know that, say, 50 years from now, everything in the industry will be much more consolidated, but how do you convince these builders that Web3 is the place to be, and that they should try to survive bear markets as best they can, because it's worth it? We've seen with different projects that it has been.

Jake: I've actually felt the pain of seeing good builders drop out of this market. One of the first projects I did growth for in crypto had two very talented builders, by far the brightest sparks in that company, and today one of them is in agriculture and the other is in Web2 tech. They have their own reasons, but I feel a big factor is this: you come to crypto, you get over the cold start, you get over the idea that people can own things digitally online, which is what's really compelling and why you want to build in this space, the extra value it can add to an existing Web2 stack. Then, like you mentioned, you hit a bear market or a bad market, everything goes down, and you're the most hated man in the world. And all you've tried to do is build. You know deep down that you're trying to do good, and people are calling you a scammer, and you think, "I don't need this. I'll build this without the Web3 element and launch it that way."

So I agree with your point about how we bring those builders back into crypto. We need more projects that create sustainable growth loops. Neither of those two was heavily involved in the token or the product; one was in operations, and the other was a bit of a maverick who did a bit of everything. But where they didn't have control, they felt let down by other members of the team. So I think there needs to be an element of improved models in how we approach crypto, because the way a lot of projects currently launch and approach crypto, for the reasons I've given in this podcast, doesn't lead to sustainable long-term growth.

At the same time, at the higher levels of the market, the belief we're seeing at an institutional level, and the moves being made at a macro level to include crypto, are big things for the industry. They show that this market isn't going anywhere. It's going to be here in 10 years, 20 years, however long. There are people bigger than us involved in this now. That might be another factor. People might have thought, "I'm getting out, because this isn't going to amount to anything." But now you have that bigger belief from the biggest players in the world, and that starts to change things a little. So I guess those are a couple of the factors that have to play out.

Hodl Up: By the way this market is treating me right now, agriculture looks like the best option for me as well. I don't blame that guy. But since you mentioned that this market is here to stay, just to wrap up on growth, and let's focus on the alt market, because that's where the real builders tend to be: how do you think the space will evolve over the next five years, up to 2030, let's say?

Jake: I think the first thing is that, as a builder, you now have to take a longer-term view. You have to believe in where this space can go and zoom out a little, rather than just living in the everyday trenches. It's important to make predictions and have conviction about where this might be in one, three, five, or 10 years, and how much value you can create in the space by then. We have such a short-term mindset in crypto a lot of the time. We're looking at when the next cycle is, when the next pump is, when all these things will happen, and we don't zoom out enough to look at where this market could go. I think if a lot of people did that, they'd make plans beyond just surviving this one cycle and start building sustainable growth strategies further ahead, and let other people chase the easy money now, though it's not really easy money anymore, but you get what I'm saying. Stop focusing on short-term wins. Focus on long-term wins, and it'll pay off eventually. That would be my number one thing.

The second thing is: don't assume the way people currently launch tokens and try to grow projects is correct, because fundamentally most projects' growth is unsustainable. They move from cycle to cycle, waiting for that little hit of liquidity to help them last another three to six months. They're not built on sustainable foundations. So even if it takes more time and more hard work, if you want to be around, you need to put thought into these things.

The third thing is that, if you're a crypto project launching a token, your launch is so important that you shouldn't rush it. You should map everything out before launch. I spoke to one founder, about four months ago now. I got introduced to their CMO and had a call with the project. He said, "Okay, we're doing this. This is our launch plan." I said, "Dude, this isn't going to work. It's not sustainable." He didn't take it too well, and said, "Look, we'll see how things go. We've locked in our launch now. We'll come to you post-launch." And I said, "Respectfully, don't come to me post-launch, because I know you're setting yourself up for an extremely difficult job." That token is something like 87% down from launch after three or four months. So that's my third point: really put thought and detail into how you're going to grow this thing. Don't sell yourself short by giving a chunk of supply to certain KOLs for short-term speculation, or giving insiders too much so they can make money at launch and leave you in a harder position, or launching before you can create something sustainable, or launching vaporware without a clear sense of how the product will play a key role in your ecosystem. That's for people who are pre-launch. For people who are already post-TGE, it's about really understanding where you are now, what your KPIs are, not just short-term but long-term, and working out a plan to reach them.

And all of this ties into one word: conviction. That's it. Believe in your plan, believe in your strategy, believe that it's going to play out, and forget the noise. That's the main thing. Look at someone like Murad. This is a different field, by the way; it's not a builder's field. But he was the biggest success story maybe 10 months ago. A few months later, his portfolio was down something like 30 million, and everyone was saying, "This guy is crazy." And he kept posting, kept working through his bags, putting out TikTok videos. Conviction, conviction, conviction. And a few weeks ago, his portfolio hit all-time highs, and everyone's like, "Oh, there's a lesson in there." He believed in memecoins, the ones he held, and even through the tough times he stuck with his strategy, because he'd put thought into it and was happy to have that conviction. He stuck with it, and he obviously got the return, whether or not he realizes it; that's up to him. But the point is, there's a lesson there about having conviction, zooming out, looking at the future, and really putting thought into everything you do.

Hodl Up: I think the word "conviction" has become so alien to Web3 and crypto this cycle, in my opinion. Murad is one of the very few people who actually have conviction in their bags. But Jake, thank you very much. I was more of a listener on this podcast, because I learned so much. I'm probably going to order the Magnet Method and read it myself as well. I appreciate it, man. Thank you for your time, and we'll probably do another episode sometime in the future.

Jake: For sure. I really appreciate you having me. One of our growth engine rooms at Magnet is our Laboratory, where we invent different growth frameworks and methodologies for crypto projects. We have the Magnet Method, the Quad Factor of Crypto Growth, Fair Launch Token-Product Fit, and a few other things there, and you can just go and get the PDFs for free. So if you want to learn how we see growth in crypto, go to growmag.net, go to the Laboratory page, and get some PDFs for free. I hope they help you on your journey.

Hodl Up: I'm sure they will. I'm 100% sure they will.

Jake: All right. Got to have conviction, huh?

Hodl Up: That's how we work.

Jake: Exactly, man. I really appreciate you guys having me on.

Hodl Up: Perfect. See you, Jake. Have a good day.

Jake: Awesome. See you, guys.

Hodl Up: It was a nice episode.

Hodl Up: It was simply lovely. Splendid behavior.

Hodl Up: It was one of the most insightful discussions we've had so far. I was surprised. I think we say this about every episode, but with this one, if you want to be a founder, or you're a crypto user, and you listen to this episode, there's a lot you'll finally understand.

Hodl Up: I think the reason we loved this one so much is that we also learned quite a lot, and second, Jake didn't have anything to shill. He just told people things based on his experience and his area of expertise. That's just my opinion, again. But what do you think in terms of growth, since we discussed all of this? Do you think memecoins are the issue? Do you think platforms like pump.fun are the issue? We couldn't really get into it, you and me, because when we get into pump.fun, it lasts hours.

Hodl Up: As an economist, you'd have to look at tons of different variables.

Hodl Up: This guy was a valedictorian, by the way.

Hodl Up: And you'd have to see how each variable would have an impact. Pen and paper. There are a lot of factors at play, from both the user end and the product end. So I'm not really at liberty to say what the main reason is. But it didn't help that the most powerful man in the world, the President of the United States, launched a memecoin, which then trickled down to the rest of the market and led to a massive spree of token launches from influencers, normies, and so on. But you get my point. We've had this discussion before.

Hodl Up: Yes. But now I have to say this, and I never said what I'm about to say: I think the Trump token caused the three-month free fall we had in the alt market back in late January, February, and March.

Hodl Up: I'm not talking about how it affected prices. I'm talking about how it affected user behavior.

Hodl Up: I think user behavior stayed the same.

Hodl Up: No, because if you look at the number of token launches after the Trump token, I'm very confident it's a lot higher than before.

Hodl Up: I know why you're wrong, sorry to say. Don't look at the last couple of months. Look at the first six months of 2024.

Hodl Up: I'll make it easy for you. I'm going to ask my best friend, the AI, about the first half of 2024 and 2025 and compare them. Focus on memecoins.

Hodl Up: Bro, you had a million tokens a week on pump.fun back in March and April 2024. The biggest numbers ever.

Hodl Up: CoinGecko data shows that new token launches, including many memecoins, were extremely high in early 2024. In February there were approximately 200,000 new tokens, in March again 100,000 to 200,000, and that was the renewed memecoin season. pump.fun, a major Solana-based launchpad, reported that over 1 million tokens were launched through its platform in the first half of 2024. Imagine that, 1 million tokens. Our country has about a million people, by the way. It says here that approximately 5,300 new tokens launched per day in 2024. Okay, no, I may have been mistaken, because as of 2025, the projection says it goes from 37 million to 100 million. Let's keep it simple: in 2024 it was 1 million, and in 2025 it's 6 million in six months.

Hodl Up: You're right. That's why you were the valedictorian and I'm the political guy. So, sorry, guys. Shall we wrap it up?

Hodl Up: Let's wrap it up. Thank you for being part of this episode, and special thanks go to Flash Trade. Have you traded on Flash? Any new trades on Flash?

Hodl Up: I have. I don't want to talk about my P&L.

Hodl Up: There's no P&L. It's nonexistent. Is the P&L in the room with us right now?