Stablecoins, Major Coins, Altcoins, Air Coins, and Pyramid Scheme
I. Stablecoins
Definition: Cryptocurrencies that maintain relatively stable prices by pegging to fiat currencies (e.g., USD, EUR), physical assets (e.g., gold), or algorithmic mechanisms. Core Characteristics:
Price Pegging: Typically pegged to USD at 1:1 (e.g., USDT, USDC) or gold (e.g., PAXG).
Stability Mechanisms:
Collateralized: USDT is issued by Tether with USD reserve collateral, while DAI is issued by over-collateralizing crypto assets like ETH.
Algorithmic: FRAX adjusts supply and demand via algorithms (partially collateralized + algorithm), while UST once tried to maintain a $1 peg through arbitrage (has collapsed).
Use Cases: Serve as an "intermediary currency" in crypto trading to avoid market volatility, or for cross-border payments, DeFi lending, etc. Representative Coins: USDT, USDC, DAI, PAXG.
II. Major Coins
Definition: Cryptocurrencies with high market capitalization, broad consensus, mature ecosystems, and long-term market validation, typically leading projects in each sector. Core Characteristics:
Market Cap and Liquidity: Rank among the top (e.g., top 20) in market cap, with huge trading volumes and universal support from exchanges.
Technology and Ecosystem: Own independent public chains or mature use cases, with active communities and robust developer ecosystems.
Risk Resistance: Less affected by market volatility than niche coins, though price fluctuations still exist. Representative Coins:
Store of Value: Bitcoin (BTC), Ethereum (ETH).
Platform Ecosystem: Binance Coin (BNB), Solana (SOL).
Stablecoins: USDT, USDC (considered mainstream tools in some contexts).
III. Altcoins
Definition: A general term for all cryptocurrencies except Bitcoin ("Alt" stands for "Alternative"), including tokens from mainstream public chains to niche projects. Core Characteristics:
Diversity: Cover different sectors like public chains, DeFi, NFTs, metaverse, etc., with varied technical architectures and use cases.
Coexistence of Risks and Opportunities:
Some high-quality altcoins (e.g., ADA, DOT) feature innovative technologies and may appreciate with ecosystem development;
Most altcoins have low market cap, poor liquidity, and are highly volatile due to market sentiment.
Difference from Major Coins: Weaker consensus foundation, less mature ecosystems, and some projects rely on hype rather than practical applications. Representative Coins: Litecoin (LTC), Cardano (ADA), Polkadot (DOT), UNI (DeFi governance token), etc.
IV. Air Coins
Definition: Tokens issued by "air projects" with no actual technical support or use cases, relying solely on false propaganda to attract investments—essentially scam tools. Core Features:
Lack of Substance: Whitepapers lack technical details, no open-source code, no launched products; project teams only package concepts with empty promises (e.g., fabricating blockchain technology, exaggerating use cases).
Marketing-Driven: Attract retail investors through community hype, false media reports, and promises of high returns, with prices often surging short-term before crashing to zero.
Scam Model: Project teams dump tokens rapidly after listing ( "crash selling") or run away with funds directly ("zeroing out"). Typical Tactics: Claim to be "100x coins" or "blockchain + high-tech," but with no development updates and fake or anonymous team information.
V. Pyramid Scheme Coins
Definition: Tokens from scam projects that use cryptocurrencies as a gimmick but adopt pyramid scheme models (hierarchical recruitment, entry fees, and compensation based on downline numbers). Core Features:
Pyramid Scheme Nature:
Entry Fees: Require investors to buy "mining machines" or tokens as entry qualifications;
Recruitment: Reward members for recruiting downlines, with higher rewards for more layers;
Team Compensation: Use downlines' investment amounts as income for upper layers, forming a pyramid structure.
False Propaganda: Package as "state-supported projects" or "international top teams," lure investments with terms like "static returns" and "dynamic dividends," and promise guaranteed high profits.
Legal Risks: Essentially illegal pyramid schemes. China explicitly prohibits any form of pyramid schemes and illegal virtual currency activities. Typical Cases: "OneCoin", "Volcker", "Plus Token" and other similar projects have all been investigated and dealt with by the police.
Risk Warnings and Identification Tips
Stablecoins ≠ Risk-Free: Algorithmic stablecoins may collapse due to mechanism flaws (e.g., UST), and collateralized stablecoins require attention to issuers' transparency (e.g., audit disputes over USDT reserves).
Beware of Air Coins and Pyramid Scheme Coins:
Verify technical details in project whitepapers, open-source code (e.g., GitHub update records), and team authenticity;
Stay away from pyramid scheme slogans like "risk-free profits," "passive dividends," or "recruitment commissions"—such projects will inevitably collapse, with participants mostly being bagholders.
Investment Principles: The cryptocurrency market carries extremely high risks. It is necessary to fully understand the fundamentals of projects, avoid investing based on hype or following the crowd, and especially be wary of niche tokens without practical applications.
China adopts strict regulatory measures against virtual currencies, explicitly defining virtual currency-related business activities as illegal financial activities. It is recommended to abide by laws and regulations and stay away from virtual currency speculation.
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