Why do many people say 'Shanzhai = Scam'? Is this statement true?
1. Why do Shanzhai coins skyrocket and then quickly halve? This is determined by the mechanism.
✅ Reason 1: The circulation design is 'extremely unfair'.
When many new coins are launched, only 1%-5% of the tokens are truly circulating, while the remaining 90% are held by the project parties, institutions, and early private placements.
Once the price is raised, they start to release in batches + dump.
Newbies buy these high-priced coins, unaware that a massive sell-off is waiting behind.
📉 Example: 1 million coins in circulation at launch, total supply of 1 billion, with 99.9% waiting to be sold later.
✅ Reason 2: KOL + exchange collaboration to harvest retail investors.
Many projects lay down 'public opinion + hype' before launching, using influencers to promote and community speculation, making people feel that 'the bull market is back'.
On the launch day, the price surges, and a bunch of retail investors rush in.
Next, market makers and project parties jointly 'wash trades', raising the price and quickly exiting.
✅ Reason 3: No real value support, relying solely on emotional speculation.
Shanzhai coins are essentially 'passing the parcel'; no one really cares what they do, everyone just wants to 'catch the limit-up'.
No real users, no cash flow income, no ecological demand, only 'telling stories'.
2. How do project parties + market-making teams 'design harvesting models'?
Stage Content Underlying Logic
1️⃣ Preheat Prophetic stories, buying ads, buying trending topics, asking KOLs to promote Creating FOMO emotions
2️⃣ Launch Binance/OKX new coin launch, surging price Window for selling
3️⃣ Wash Trading Rapid fluctuations, inducing buying and selling Washing away unstable chips
4️⃣ Falling below the issue price Retail panic, institutions complete back-and-forth to break even No one is taking over
5️⃣ Long-term zeroing Shrinking transaction volume, losing topics, no technical support Project demise
3. Is 'Shanzhai coins = scam' true?
This statement is not entirely correct, but 95% of projects are indeed like this. The following is the classification logic:
Type Feature What should you do?
✅ Potential Projects Have real applications, transparent teams, and financing capabilities Medium to long-term layout, regular follow-up
⚠️ Speculative Hot Projects Rely on narrative to hype concepts, technology is not grounded Only do quick in-and-out, don’t get attached
❌ Clear scams No code, runaway team, three-no white papers Firmly avoid
