When bear markets hit, Ponzi schemes will emerge in large numbers, everyone should hold onto their pockets. Today, we will discuss a community token similar to Ponzi schemes. Of course, we won't generalize; this article will objectively analyze and explain what community tokens are, what square community tokens are, how community tokens operate, what pitfalls there are, how to distinguish them, which can be participated in and which cannot, how to make money through community tokens, and how to avoid legal issues when participating in community tokens.

Let’s talk about the origin and concept of community tokens

In the Chinese blockchain context, 'community tokens' usually refer to those that are primarily driven by the community, decentralized consensus, lack a strong central team, and rise through meme/culture/belief/entertainment/social dissemination. The most typical example is the category of Meme coins.

  • Early (2011–2013): After Bitcoin, a large number of 'altcoins' emerged, many of which were just tweaks to parameters, name changes, or new memes to launch coins. The main driving force was the community's meme culture, speculation, and mutual teasing. At that time, people jokingly referred to these types of coins as the prototype of 'community coins' or 'air coins.'

  • The true 'modern community coin/meme coin era': The birth of Dogecoin (DOGE) at the end of 2013.

Dogecoin is recognized as the first true internet meme (Doge Shiba Inu meme), completely relying on community-driven spread and meme culture, without serious business plans, yet unexpectedly becoming a global cryptocurrency phenomenon. It set the template for later meme coins/community coins.

  • Originating from jokes / parodies

  • Super large supply, low unit price

  • Viral spread through social media (mainly Reddit and Twitter at the time)

  • Communities doing charity, organizing events, driving prices up

  • No VC, no serious white paper, founders usually run away or neglect it later

Since the advent of Dogecoin, the strategy of 'the community is the only narrative' has been successfully validated. Later, SHIB, PEPE, BONK, WIF, various cat, dog, and frog animal coins, Trump coin, xAI-related memes, etc., have all followed this path.

With the development of the industry, after several waves of heat in DEFI, Gamefi, etc., those who were once involved in Ponzi schemes have come out again, utilizing community coins ***. With the explosive popularity of Chinese memes, it has lowered the cost for these people to harvest retail investors. Now in a bear market, both Binance Square and web2 platforms are flooded with Ponzi schemes and various community cx organizations, alongside our main character, community coins.

A reminder for the scalpers in mainland China

Let me share some data. According to SlowMist's (2025 Blockchain Security and Anti-Money Laundering Annual Report), in 2025, courts in mainland China had a total of 853 rulings related to virtual currencies, including 568 criminal rulings (about 66.6%) and 282 civil rulings. Many of these criminal cases involve charges such as pyramid schemes, illegal fundraising, fraud, and money laundering, with many projects disguised as blockchain/community coins being classified as organizing or leading pyramid schemes or fundraising fraud.

How do current community coins operate?

According to market data analysis and simple investment research, a large number of community coins on the market now are completely different from previous community coins. It can be said that today’s community coins are all cx, zp, zjp, because the birth of fair launch platforms has made it more costly for this group of pz, cs with relatively low intelligence to swing their knives.

So how do current community coins operate?

First, you need to issue a coin or pick up a coin that has gone to zero. Some have tax rates, some do not. Early participants start to 'hide' their chips to make the market appear clean (top 10, top 100 holdings, developer holdings, fishing wallets, etc.), and then they start to pull in people cx, waiting for retail investors to gradually lift the price and sell off for profit.

Those participating in 'community construction' are often manipulated. According to the elliptic curve algorithm and the constant product of amm, the more you sell, the lower the price. You may look at the coins you hold and see a lot of money, but once you sell, you incur losses; while early community members keep motivating you to build and take turns buying and selling, not only do you lose money but also waste time, a typical case of being sold while still helping to count the money!

Can we participate in community coin construction? How to distinguish good and bad communities?

Everything exists for a reason. When there is a gap in an industry, something will fill that gap, and community coins are one of those things; so how should we as retail investors correctly participate in community coins?

First, conduct investment research and analysis from the market perspective, such as chip distribution, using professional detection tools for data analysis. This can only ensure relative data transparency for you, and in reality, it's also about assessing the intelligence of the core personnel in the community. If they can't handle this well, how can you expect them to build the community properly?

Secondly, conduct a comprehensive analysis of the community from multiple dimensions, such as the community operation model, the education, background, resume, and strength of core personnel. The most critical aspect is to observe the activity level of retail investors in the community and whether the community has the ability to sustain itself, as well as the richness and solidity of the infrastructure ecosystem.

If a community lacks the ability to sustain itself, it's like leading an army of 300,000 into battle in ancient times without provisions. Soldiers can survive a few days without food, but what happens if they go hungry for a long time? Not to mention the lack of combat effectiveness, internal issues will definitely arise first.

Can you make money by participating in community coins?

Don’t think small, don’t think small, don’t think small, go to hell with beliefs, go to hell with beliefs, go to hell with beliefs. Where is the belief now? Community coins are generally more suitable for swing trading. Those with abilities can script for arbitrage, while those without can do manual arbitrage. Keeping some chips to participate in construction and learning over time is also acceptable. Just don’t think small!

If not for the early community personnel, generally zero risk, but don’t show yourself, lower your presence. A major red flag is definitely not to hold meetings on platforms in mainland China, especially where some communities are purely fraudulent, getting brainwashed at certain meetings. Although retail investors are mostly educated verbally, it's still annoying. Also, never engage in any offline activities; if community offline activities are within mainland China, it’s best not to attend. Those with strength won’t hold offline activities in the country.

Let’s leave it at that for now. This article is fully open to discussion. If anyone is dissatisfied, feel free to debate! I have already saved it, and I deleted over 1000 words from the draft!