AI Investor Timo Shares On-chain Trading Insights

In a recent online communication, AI investor Timo shared his experiences and insights on on-chain trading. Timo primarily invested in the primary market of the AI sector in the Web2 space, while his Web3 trading journey began in 2017 with the purchase of Bitcoin. After experiencing the ups and downs of contract trading, he started to focus on on-chain trading from the beginning of last year, venturing into various areas such as inscriptions, token swaps, and pre-sales.

Timo emphasized that when trading AI assets on-chain, it is important to invest in projects that one can understand. His main strategy is to look for opportunities with potential returns exceeding ten times and higher caps, while strictly controlling position sizes, with no single project investment exceeding 15% of total capital. This strategy currently has a success rate of over 90%.

For AI targets worth noting, Timo analyzed them from the perspective of the industrial chain:

1. Protocol Layer: Needs to address the issue of smart interaction between Agents.
2. Model Layer: Professional domain models and reducing inference costs are key.
3. Data Layer: The filtering and processing of high-quality data is crucial.
4. Tool Layer: The open platform may become the direction for future development.
5. Application Layer: AI Agent needs to focus on high-frequency applications that can attract Web3 users.

When selecting a project, Timo recommends conducting fundamental analysis from four aspects:

1. Narrative: Determine project cap, focus on user needs, liquidity, and infrastructure.
2. Control of Funds: Strongly manipulated markets usually have a longer lifecycle and greater imaginative space.
3. Products and Technology: The market is becoming increasingly mature, and attention needs to be paid to actual capabilities.
4. Team Background: Look for "regular troops", verify resumes and research achievements.

For the timing of opening a position, Timo suggests paying attention to the operations of market makers, as it is usually more reasonable to enter when market makers are accumulating.

To avoid trading mistakes, Timo emphasized the importance of thorough research and suggested communicating directly with developers to obtain firsthand information. At the same time, he reminded investors to be patient in building their positions, not to rush into full positions, and not to overly rely on technical analysis.

In terms of valuation, Timo proposed two methods: for new projects in existing tracks, a benchmarking valuation method can be used; for entirely new projects, personal judgment is required. He suggested setting profit-taking targets at different stages and adjusting flexibly based on individual circumstances.

Timo believes that short-term investments focus more on market perception, while medium to long-term investments should pay attention to the essence of the project. He emphasizes four key points for continuous growth: narrow down oneself, maintain curiosity, learn to review, and accept external opinions.

Finally, Timo shared the three individuals who had the greatest impact on him: Mises, Duan Yongping, and Taleb, as well as three recommended books: "Fooled by Randomness," "The Crowd: A Study of the Popular Mind," and "Built to Last." He emphasized that understanding the rules of the game is crucial before participating in the market.