These days, someone is again watching large on-chain transfers and hot and cold wallets of exchanges, shouting "Smart money is coming" at every move. I used to be quite convinced by this too, thinking that just watching the chain was enough. But the time I learned my lesson was when the on-chain game pool collapsed: it looked lively on the chain, but in reality, it was a false prosperity created by inflation pumping out yields. The more people queuing to claim tokens, the thicker the selling pressure, and the pool’s depth was gradually drained. In the end, you think you're riding high volatility, but you're actually just catching a continuously draining market.

To put it simply, output isn't the problem; the real issue is when output doesn't correspond to actual consumption or recycling. Now, when I monitor pools, I first write down conditions: the speed of new output, whether the recycling mechanism is genuinely burning tokens, and whether I can accept the withdrawal costs amplified by impermanent loss... Whether I’m obsessive or not, at least I don’t just look at the chain anymore. I also need to consider emotions—too much uniform excitement can actually be a warning signal.