How to find the next 100x coin? Use the "narrative scoring" formula to seize opportunities that have not yet taken off

You might have spent countless hours trying to capture the next hot narrative in the crypto space. Judging correctly could make you a fortune; entering too late would make you the bag holder. In the crypto market, the highest investment returns come from:

1. Identifying narratives early

2. Mapping out capital rotation routes before others

3. Exiting when the expected bubble reaches its peak

4. Locking in profits

Then consider: Will the next wave of narratives arrive? Narratives will cycle, and speculative waves will resurge under the following conditions:

・There is genuine technological innovation supporting the narrative, allowing it to rebound after the first wave of hype subsides

・A new catalyst emerges

・A dedicated community continues to build after the hype fades

I elaborate on my thoughts in the article below:

Taking Ordinals on Bitcoin as an example, we can clearly see 4 waves of speculative momentum from the following chart.

December 2022: Ordinals theory released, with minimal on-chain activity.

March 2023: BRC-20 standard triggered the first wave of momentum; activity cooled for six months.

Late 2023 to Early 2024: Continuous development sparked the second and third waves of momentum.

April 2024: Runes launched, prices surged, then faded within weeks.

Ordinals provided months of positioning time and multiple exit opportunities, while Runes offered only a brief single exit window. The field is currently silent. Will Ordinals (including Runes), Non-Fungible Tokens, or other new forms resurge? Perhaps. It depends on my narrative scoring.

Analysis Framework

This is a framework for identifying hot new narratives and determining whether subsequent speculative waves will persist. I am still refining this version, and here is my 1.0 formula:

Narrative Score = [(1.5× Innovation × Simplicity) + (1.5× Community × Simplicity) + (Liquidity × Tokenomics) + Incentive Mechanism] × Market Environment

This formula is not perfect, but it demonstrates which factors are important and their weights. Let's break it down!

Innovation

Innovation here refers to crypto-native technological innovation that I focus on. The most powerful catalyst is zero-to-one innovation. It can appear in new domains (DeFi, Non-Fungible Tokens, RWA, etc.), new tokenomics models (like veToken), or even token issuance methods (fair launch, Pump.fun).

I previously wrote: Zero-to-one innovation has a unique ability to change industry trajectories, and its originality can spawn new crypto sub-domains. Due to cognitive bias, identifying such innovation is challenging. When something new emerges, it might receive little attention (like Ordinals) or even be seen as noise. Therefore, maintaining an open mind and trying every new trend (especially controversial ones) is key to gaining an early advantage. Without genuine technological innovation, a narrative is just a fleeting speculative bubble.

This cycle is unique because its innovation (AI) comes from an external source. Thanks to AI, we've seen innovations like Kaito InfoFi and AI agents. Some examples from this cycle include:

· Ordinals

・reStaking

・AI Agents

· InfoFi

· SocialFi

· ERC404

My goal is not to list all cases but to build a mindset for identifying them. Innovation level can be scored from 0 to 10.

Simplicity and Meme Potential

Not all innovations have equal spread. Some are easy to understand, some are not. Complex narratives (like zero-knowledge proofs, reStaking) spread slowly, while simple or meme-like narratives (like WIF) spread quickly. Can you explain the concept in 5 seconds? Is it memeable?

Examples:

・High Simplicity (10/10): AI, Memecoin, XRP as a blockchain bank

・Medium Simplicity (5/10): SocialFi, DeFi, Non-Fungible Tokens, Ordinals

・Low Simplicity (3/10): Zero-knowledge proofs, Modular chains, reStaking

Complex narratives need time to develop, and price increases are also slower. Moreover, simplicity can drive community growth.

Community

Bitcoin is the greatest zero-to-one innovation, but without a community, it's just a piece of code. Bitcoin's value comes from the story we give it. People still don't understand why Cardano or XRP perform well with limited innovation - the reason is: a dedicated community. Or in a more radical way: Memecoin.

They have no technological innovation, but Memecoin is now a $66 billion market cap sector, entirely thanks to a group of people rallying around a token. The tricky part is calculating community size: is it X platform followers, X topic heat, or Reddit subscriptions and post volume?

Some communities are hard to identify because they use different languages or communicate on different channels, like Korean users discussing XRP on local forums. Kaito's proposed "Mindshare" is an excellent indicator, but the Loudio experiment shows that having massive mindshare doesn't necessarily mean building a real community.

To identify a true community, especially in early stages, the best method is to immerse yourself: buy tokens or Non-Fungible Tokens, join Discord or Telegram groups, observe who's discussing it on X (non-paid promotion).

If you feel a genuine sense of belonging and connection, it's a strong bullish signal. In my view, Hyperliquid is the fastest-growing community. Binance and OKX's attacks on HYPE actually strengthened its cohesion, giving the community, support team, and protocol a mission and goal. Hyperliquid has become a movement.

I believe innovation and community are the most important factors, so I allocated 1.5 times the weight to both. Similar to innovation, I added the same conciseness variable to community factors: the simpler the narrative, the easier it is to spread.

Memecoin (such as Pepe) is easy to understand, and while Hyperliquid is less simple, it still successfully cohered a community. Runes and Ordinals both brought technical innovation (allowing issuance of fungible tokens on Bitcoin, which was once considered impossible) and have strong communities. But why did prices fall? Because there is a third factor to consider.

Liquidity

Innovation ignites the narrative, community builds stories and beliefs, but liquidity is the fuel that allows you to ride the wave and safely exit at the peak. This is the key to distinguishing between "sustainable waves" and "last ones holding when the music stops". Casey Rodarmor, the creator of Runes, performed excellently in building a fungible token model, but perhaps he should have simultaneously established an AMM pool on Bitcoin similar to Uniswap to maintain Runes' momentum.

Runes Memecoin struggles to compete with Solana or Layer2 Memecoin because they lack passive liquidity pools. In fact, Runes is more like an NFT traded on Magic Eden: while having decent buy-side liquidity, it lacks sufficient sell-side liquidity for large exits. Low trading volume cannot incentivize first-tier CEX listings.

Non-Fungible Tokens also face liquidity issues. This is why I had high hopes for the ERC404 Non-Fungible Token fragmentation model, which could have provided passive sell-side liquidity and annual yields through trading volume. Unfortunately, it failed. I believe liquidity is the primary reason why DeFi options have struggled to rise for years.

During recent market volatility, I wanted to hedge my investment portfolio with options, but on-chain liquidity was terrible. I had high expectations for the crypto options platform Derive, but its future is now uncertain. Liquidity is not just about deep order books, continuous new funds, CEX listings, or high total value locked (TVL) in liquidity pools, though these are important. The liquidity in the formula also includes protocols that achieve exponential growth with increasing liquidity, or projects with built-in liquidity guidance models, such as:

・Hyperliquid: More liquidity means a better trading experience, attracting more users, which in turn brings more liquidity

・Velodrome's ve3.3 DEX: Building liquidity through bribery mechanisms

・Olympus OHM: Protocol-owned liquidity

・Virtuals DEX: Pairing new AI agent releases with VIRTUAL tokens

Token Economics

Token economics is equally important as liquidity. Poor token economics can lead to selling. Even with deep liquidity, the continuous selling pressure from unlocks is a huge risk.

・Excellent cases: High circulation, no large VC/team allocations, clear unlock plans, burn mechanisms (like HYPE, well-designed fair launch), etc.

・Poor cases: Malignant inflation, massive cliff-like unlocks, no revenue (like some Layer2 projects).

A narrative with an innovation score of 10/10 but a token economics score of 2/10 is a ticking time bomb.

・Subtotal = 67.5 + 52.5 + 15 + 3 = 138

・Multiplied by market environment (0.5): Runes narrative score = 138×0.5 = 69

In comparison, Memecoin scored higher in my subjective assessment (116 points):

Innovation = 3 (due to Pump.fun's innovative issuance model, not completely zero)

Community = 9

Liquidity = 9 (integrated into AMM, high trading volume = high LP rewards, CEX listing)

Incentive mechanism = 7

Simplicity = 10

Tokenomics = 5 (100% circulation upon issuance, no VC, but small group risk / rush purchase, no revenue sharing)

Market environment = 0.5

Summary

・Scan narratives early: Use tools like Kaito, Dexuai, focus on innovation and catalysts

・Strict scoring: Assess honestly. Poor tokenomics? In a bear market? Lack of incentives? Market environment changes constantly, new native innovations in emerging fields may revive narratives (like Runes' AMM DEX)

・Exit before incentive mechanism declines: Sell at token release peak or airdrop landing

・Respect trends: Do not fight macro trends. Hoard cash in bear market, deploy funds in bull market

・Maintain an open mind: Try protocols, buy popular tokens, participate in community discussions... Learn through practice

This is just my 1.0 version formula, which I will continue to improve.

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