This article analyzes the potential risks and issues of domestic Web3 projects such as Cococat, Pi Network, and Holiverse, aiming to remind investors to participate cautiously. The article points out that these projects are mostly aimed at domestic users and face regulatory risks; founders may bear legal responsibilities at any time; target users are often novices or the elderly, investing in high-risk and irresponsible ventures; and they lack financing from well-known institutions, relying on retail investor funds.
This article may offend some people, but I believe it can help more individuals.
Since I started making videos, I have received inquiries about various projects, with the most inquiries about Cococat, Pi Network, Holiverse, and others like Fifth City Metaverse. Today, I will provide some of my own analyses and thoughts on these projects for your reference. Originally, I wanted to include a photo of myself with Dr. Jiang from Cococat, as we met briefly at an offline seminar, but...
-
Regulatory Risks of Domestic Web3 Projects
These projects are likely issued in our country, regardless of where they are registered, where their official website servers are located, or where the founders and teams are based. Some say that Web3 projects do not need registration, servers, or domains, but in terms of basic facts, their core users are all domestic. You can check their communities to see if this is the case. Several regulations regarding cryptocurrency are explicitly prohibited in our country; domestic Web3 projects are not allowed to issue tokens, mine with mining machines, conduct ICOs, or engage in any organized promotion of cryptocurrencies. Therefore, the first issue these projects face is regulatory risk. In other words, the founders and teams of these projects are always at risk of legal sanctions. -
High-Risk Investments for Novices and Elderly Users
Most of the users consulting me are novices or older individuals, and I believe it is extremely irresponsible to encourage these people to invest. The current stage of Web3 is akin to a wild frontier—immature, chaotic, lacking comprehensive regulations, and filled with experimental and high-risk ventures. To ask novices and the elderly to invest in such conditions is simply outrageous. You can check online to see if the offline events they organize predominantly attract older individuals. -
Lack of Institutional Financing
In this wild frontier, who will invest? It must be institutions and VCs, as they are called venture capitalists. They are better at seizing opportunities and avoiding risks; even if they fail, it does not affect their personal lives. Once the industry matures slightly, novices or capable individuals can consider gradually entering the market. Looking at the financing situation of the aforementioned projects, you can check on rootdata, where all Web3 project financing information is displayed. You will see if any of them have received capital. Some say they have technology and do not need financing, but then why are they asking retail investors for money? -
Self-Built DEX Trading and Long Unlocking Periods
These projects have issued project tokens but have not listed them on well-known exchanges, or even on second-tier exchanges. So where do they trade? They trade on their own decentralized exchanges, using a DEX shell with only a few trading pairs. The product may be simple, but the schemes are definitely complex. For example, if you spend 10,000 yuan to buy their tokens, they will do everything possible to get you to participate in liquidity mining or staking, which means continuing to deposit your tokens into the protocol. This is normal; many DEXs operate this way, and there’s no problem with that. However, they also set a two-year unlocking period. Isn’t that frightening? No matter how high the price rises or how sharply it falls, you will find yourself helpless. -
Misleading Offline Activities and Ideological Piling
They love to hold events, inviting retail investors to a large hotel, hiring a speaker to talk about blockchain and Web3 concepts. Of course, it sounds inspiring—talking about decentralization, privacy, and fairness. These are all true, but what does this have to do with the project? Can the retail investors below understand the code? Or smart contracts? Or token models? A pile of correct viewpoints builds a huge lie, combined with a beautiful slogan, where we see Cococat shining in the sunlight. -
Recruitment and Community Brainwashing Incentive Mechanisms
Recruitment involves a complex referral incentive mechanism, establishing a seemingly united community that follows orders blindly, capturing various territories. Whenever a video goes viral, there’s a flood of promotional content for various projects below. When asked about products, technology, financing, or teams, they stammer and instead tell you how great the project is, how profitable it is, and how to seize the opportunity of the times.
That's all for now. I have also visited several project communities, and in some older projects, some individuals have already realized they have been deceived and have publicly exposed many issues in the community. In short, you cannot earn money beyond your understanding. In such an emerging industry, learning and practicing more is never wrong, but do not invest blindly. Do not think that if you miss an opportunity, it will be gone forever; there are plenty of opportunities. This is just the beginning. Don't wait until the real opportunity arrives, and you have lost confidence or run out of chips.
I also advise these project parties; perhaps some truly have ambition and a genuine heart for Web3, but do not gamble the livelihoods of retail investors for institutional funding. If your project is genuinely good, thank those builders who are truly working hard for the long-term development of Web3.
Welcome to join the community
Welcome to the community WeChat: BQ221858
Welcome to follow Weibo: @QuarkMing202
Welcome to follow Twitter: @xian202766693