$MYX In the small-cap virtual coin market, the dealer may indeed achieve multiple profits in the short term through the model of 'controlling spot + perpetual contracts for repeated harvesting', but in the long term, there are insurmountable contradictions, and it will ultimately become ineffective due to 'ecological exhaustion' or 'risk backlash'. This can be dissected from the following angles:
1. Short-term feasible: Use 'spot control + contract leverage' to create fluctuations and harvest accurately
If the dealer holds more than 90% of the spot and does not sell, the core logic is to achieve 'zero-cost (or low-cost) harvesting' by controlling small fluctuations in spot prices, triggering retail investors' liquidations or stop losses in the contract market:
- Controlling spot creates 'controllable volatility': the dealer only needs to use a small amount of funds to manipulate the spot (for example, first raising by 5%, then crashing by 8%), which can cause the contract price anchored to the spot to fluctuate synchronously. With contracts carrying 10-100x leverage, a 5% rise in the spot may yield a 50%-500% profit on long contracts, but an 8% drop could directly cause high-leverage long positions to be liquidated (an 8% drop under 10x leverage triggers liquidation).
- Utilizing the 'casino mentality' of retail investors to set traps: Retail investors in the contract market often lack risk control, are accustomed to chasing rises and killing falls, heavily leveraging, and are unaware of the 'truth of control'. The dealer can repeatedly switch between long and short positions to harvest by 'first pulling up to attract long positions, then suddenly crashing to liquidate bulls', or 'first crashing to force shorts to enter, then pulling up to liquidate bears', achieving high profitability efficiency in the short term.
- The 'additional income' from funding rates: If the dealer controls the market to make contracts favor one direction for a long time (for example, continuously raising prices to favor long positions), the funding rates will be positive for a long time; at this point, if the dealer holds long positions, they can receive additional fee income from shorts, further increasing profits.
2. Long-term unfeasible: The three core contradictions will collapse the 'harvesting cycle'
The fatal problem of this model is the 'reliance on a continuous influx of new retail investors', while the market's 'retail investors' are not infinite, and risks will continue to accumulate:
（1）After retail investors are 'drained dry', the contract market loses liquidity
- Repeated harvesting will cause old retail investors to lose and exit, while the entry speed of new retail investors depends on the attraction of the 'profit effect'. However, the price fluctuations of controlled coins are completely manipulated by the dealer, lacking real trends; once new retail investors enter, they almost inevitably incur losses, ultimately leading to a situation where 'no one dares to play'.
- When liquidity in the contract market is exhausted (for example, the daily trading volume of a certain coin's contract drops from 100 million to 1 million), even if the dealer creates fluctuations, it is difficult to trigger enough liquidations (because retail investors hold too few positions), and harvesting profits will significantly decline, even failing to cover manipulation costs (such as fees for spot transactions and reverse expenditures of funding rates).
（2）The 'marginal cost of price fluctuations increases'
- Initially, the dealer only needs small fluctuations (5%-10%) to harvest high-leverage retail investors; but as retail investors gradually 'learn' (for example, reducing leverage, setting wider stop losses), the dealer must create larger fluctuations (20%-50%) to trigger liquidations.
- Significant fluctuations in spot prices require the dealer to invest 'real money': when raising prices, they need to absorb a small amount of sell orders in the market (even if the circulating supply is 1%, a significant rise may trigger early retail investors' profit-taking sales); when crashing prices, they need to sell part of the spot (even if holding 1%, under low liquidity, it may lead to uncontrollable price collapse), which will consume the dealer's holdings and funds over the long term.
（3）The opponent's 'harvesting risk'
- When the dealer's harvesting model is exposed (for example, the market discovers 'they always crash after lifting prices'), other large players or 'smart money' may position themselves against it: for example, opening short positions in advance when the dealer raises prices, and opening long positions in advance when crashing, betting against the dealer.
- Due to the extremely poor liquidity of the spot controlled by the dealer, once facing concentrated reverse operations from opponents, they may be counter-killed due to 'inability to close positions quickly'. For example, when the dealer crashes the market to force short positions to liquidate, if the opponent uses large funds to buy the spot and open long positions, it may cause prices to suddenly rebound, causing the dealer's short positions (if opened simultaneously) to be liquidated.
（4）The vicious cycle of 'control costs' and 'trust collapse'
- Maintaining control requires continuous investment from the dealer: for example, paying exchange fees, dealing with regulatory risks (some platforms will delist highly controlled coins), and even spending money to 'market make' to maintain false liquidity; these costs will accumulate over time.
- More importantly, when the market fully realizes 'this is the dealer's cash machine', not only will retail investors exit, but even exchanges may delist the contracts for that coin due to 'concerns about compliance risks', directly cutting off the dealer's harvesting channels.
3. Essence: This is a 'fund-based harvesting of retail investors', and the inevitable outcome is 'collapse to zero'
The core profit logic of the dealer is 'using the losses of new retail investors to pay the (few) profits of old retail investors + their own profits', but virtual coins themselves do not create value; they rely on 'new retail investors entering' to maintain the cycle. Once the inflow of new retail investors is cut off or there is a 'control error' (for example, being targeted by opponents or breaking the capital chain), the entire system will collapse:
- Ultimately, the dealer will either 'crash the market and liquidate' (even if the price goes to zero, at least recover some funds), or due to 'no one taking over', the spot and contract prices will simultaneously drop to zero, trapping themselves in 99% of their positions (these positions lose actual value due to lack of liquidity).
Summary
'Controlling spot + perpetual contracts for repeated harvesting' may work in the short term (from a few months to 1 year), especially in a bull market environment where retail investors are willing to enter; but in the long term, due to contradictions such as 'exhaustion of retail investors, increasing costs, opponent sniping, and trust collapse', it will inevitably become ineffective.
For investors, the essence of trading contracts for such coins is 'a zero-sum game with the dealer', and the dealer holds absolute information and control power; the profits of retail investors are merely 'temporarily granted by the dealer', and they will almost inevitably incur losses in the end. Staying away from small-cap controlled coins is the most fundamental risk control.
