Dividend Ponzi Explained
Mining Rigs, Crypto Games, Anti-Collapse Strategies - Bitcoin's Revolutionary Impact on Dividend Schemes
+-----------------------------------------------------------+
| DIVIDEND PONZI |
+-----------------------------------------------------------+
| |
| [User Deposit] --> [Pool] --> [Linear Dividend] --> $$ |
| | ^ |
| +---- Later deposits ----------+ |
| |
| Pool: YES | Free Exit: NO | Fixed Return: NO |
| Risk: LOW | Analogy: Creditor |
+-----------------------------------------------------------+1/ Bitcoin/POW Mining Schemes
Bitcoin/POW era mining schemes represented by ETH are typical dividend schemes: invest in mining rigs and electricity (deposit) to receive fixed returns (block rewards).
Bitcoin's revolutionary impact on dividend schemes has three key points:
- No project team
- Fixed returns are coin-denominated, not fiat-denominated, no rigid redemption
- Mining rig and electricity investments aren't recovered by project team, don't provide return liquidity, but are sunk costs
2/ From the Operator's Perspective
Bitcoin:
- ✅ No reserves needed
- ✅ No real payout ratio (block rewards aren't fiat-denominated rigid redemption)
From the user perspective, Bitcoin "nominally" satisfies all "perfect Ponzi" expectations:
- No entry fee (although requires hashpower and electricity, not deposits to project team)
- Free entry/exit (no lockup, though opportunity cost exists)
- High returns (as high as your dreams)
- No project team (legally no risk)
3/ Mining Coin Liquidity Issues
Mining coins are typically truly decentralized because mining coins have no native liquidity. They need to find liquidity in the market (someone willing to bid and ask), to find their "pizza moment" (pricing Bitcoin).
This process either happens naturally like Bitcoin, or is artificially catalyzed by someone proactively becoming the "market maker."
The only way to inject principal into the mining coin model is deploying hashpower, i.e., "buying mining rigs"
4/ Mining Operator's Positive Cycle
Therefore, the first operator of all mining coins after Bitcoin is the mining rig or pool. They can easily construct a positive dividend scheme cycle:
Miner buys rig --> Funds pump price --> Price rises
^ |
| v
Sell coin/rig <---- More buyers join ------+This is impossible in traditional dividend schemes because project teams need massive reserves for rigid redemption. Mining operators can use secondary leverage - 1 unit of pumping can generate 5x rig sales.
5/ Mining Rig Scheme Core Advantages
Buying mining rigs locks principal, electricity costs are sunk costs that increase with output. No need to consider whether global market liquidity (reserves) is sufficient for selling rigs at original value.
Mining operators control chip structure through hashpower. Based on current chip status, pump prices as much as possible to increase rig sales. Can even "profit on primary, lose on secondary"
A mining coin, as long as rig sales + liquidity > output circulation, can keep pumping
6/ Case Study: $MOBILE (Helium)
Using US mobile $MOBILE as example:
- Helium mining rigs must be purchased (though multiple rig vendors exist)
- Reportedly their Miami main base stations are self-controlled
- Reasonable estimate: at least 50%+ Mobile output control
- First year 50B output was pre-mined, as of Aug '23 actual circulation only ~30B
Pumping expectation formula:
Sales growth expectation ≥ (Annual new sell pressure / Rig cost) × Liquidity coefficient7/ Remember Market Maker Logic
Market makers mostly react to current chip structure, not price based on entire mining coin model lifecycle
Mobile-like mining coin models also apply to early mining coins 1-2 years old, including:
- $KAS
- $HONEY
- $SMH
DePIN or POST are just fugazi, essentially aliases for mining coins. Of course, it's not just those with mining rigs that count as mining - anything with miner-rig structure counts.
8/ Crypto Game Sector
The most typical is almost the entire Crypto Game sector:
- @Stepnofficial
- @AxieInfinity
- @playbigtime
- @LootRealms
Essentially all are more innovative mining rig dividend schemes.
Crypto games don't need traditional players, but massive three-shift operations, 18 people with 6 accounts, professional studios selling hourglasses and buying crystals
9/ Game Sector Selection
Crypto game fundamentals don't "improve." This sector, except for fully on-chain games choosing "legitimacy" (to Vitalik), has already made its value return direction choice: becoming "mining games."
When selecting game sector targets, must check for:
- ✅ Clear mining structure (Mining rig NFT - Output logic)
- ✅ Miner community presence (Professional studios)
10/ Dividend Scheme Limitations and Backup Plans
Dividend schemes are far from the only solution, not even the best solution.
When market liquidity is scarce or chip structure becomes more dispersed, mining rig schemes enter phase two (like AR, FIL, XCH etc.), requiring mutual-aid and split schemes to share sell pressure.
Mining coins without these backup plans, after losing upward momentum, will inevitably see both volume and price decline, losing liquidity and reaching a dead end.
11/ Anti-Collapse Strategies
How to adjust after chip structure disperses to prevent collapse:
- Reduce hashpower or ban accounts — Change supply structure
- Nest new dividend or split schemes — Create staking or consumption
- Find long-term liquidity — List on exchanges
Mining rig dividend scheme plot:
Sell rigs --> Pump on DEX/small CEX --> Sell more --> List on major CEX --> Adjust*Listing on DEX or small exchanges can effectively prevent major exchange credit trading teams from trading against you
Core Formulas
Scheme continuation condition: Rig sales + Liquidity > Output circulation
Operator profit: profit = Total deposits - Total fixed dividends
Collapse condition: Chip structure over-dispersed + Upward momentum lostEverything is a scheme. A good project in Crypto must first be a good scheme.