The 91st issue of Uweb’s famous teacher’s cutting-edge class: The three-pan theory helps you understand the underlying logic of the bull market. The following is the essence of the interaction between Uweb principal Yu Jianing and the author of the three-pan theory Encrypted Wei Tuo. Enjoy:
1. The Ponzi scheme is an inevitable product of human economic development and has promoted the expansion of credit. It becomes a scam only when it is used to make illegal profits and deceive investors.
The Ponzi scheme is often considered a scam, but in fact it is an inevitable product of human economic development. The Ponzi mechanism becomes a scam only when it is used for malicious purposes. First of all, it is necessary to clarify what a Ponzi scheme is: a Ponzi scheme is an economic system in which there is a mismatch between the demand for funds and the expected return, and this mismatch requires increasing funds to fill and resolve. To illustrate with a simple metaphor: in ancient times, people had no concept of currency, and transactions could only be exchanged for money and goods. Such an exchange is extremely inefficient because it is necessary to match the needs of the other party and it is impossible to form idle resources. With the emergence of credit currency, people can use a unified medium for transactions, reducing the difficulty and time of exchange. The introduction of credit currency can form an idle resource or idle currency state globally. In this case, the liquidity of currency is improved, resulting in a mismatch in expected returns. For example, people with idle currency can choose not to rush to consume, but use it for other investments, thus changing the local supply and demand relationship and price.
From a broader perspective, the Ponzi mechanism and resource mismatch have driven the expansion of credit, thereby promoting the development of the human economy. Therefore, we must understand the existence of Ponzi and look at its essence with a neutral eye.
2. The three-disk theory divides the Ponzi economic system into dividend disk, mutual aid disk and split disk, which attract funds through sunk costs, short-term capital flow and asset increase respectively.
The three-plate theory divides the Ponzi economic system into three categories: dividend plate, mutual aid plate and split plate.
Dividends are when users pay sunk costs (such as non-refundable funds or opportunity costs of liquidity) in order to obtain the promised long-term, fixed returns. For example, the cost of buying a mining machine or depositing a wealth management product is irreversible, and the expected return is a stable return. The income from mining machines and the interest on bank deposits are examples of dividends. The second type is POS staking or restaking, which requires a large capital investment and leads to opportunity costs due to the lock-up time. For example, by staking Ethereum or Solana, the annualized rate of return may reach 5% or 7%. Another less obvious dividend is the "0-draw" model. This type of model does not involve monetary sunk costs, but rather time and energy. For example, participating in mini-games on Telegram or the previous Pi network, the cost paid by users is time and energy. Even so, after long-term participation, users often feel the psychological sunk cost. When these platforms require users to pay a small fee to obtain rewards, most people will choose to pay because few people can clearly recognize the true situation of sunk costs psychologically.
Mutual aid does not require sunk costs, but is a Ponzi system that obtains a promised fixed income through short-term capital supply. Participants can enter and exit funds at any time, expecting to get returns from it. Traditional micro-lending and P2P platforms, liquidity mining in Crypto (such as Uniswap, Raydium), FOMO3D, and the early Pi network are all examples of mutual aid. From a global perspective, MEME and Dogecoin are also models of mutual aid. The capital supply and income returns in this type of system often show Ponzi characteristics, and finally collapse due to the break of the capital supply chain.
Split refers to a Ponzi scheme that attracts new capital by increasing the number of assets per unit of capital within a system at a specific point in time. For example, China's real estate market increases market supply by building new properties, thereby raising housing prices and making the assets of early investors appear to have increased in value. Split models in the crypto space, such as Ethereum's ICO, Solana's Pump.fun, and the use of Eigenlayer's pledged assets to launch new chains, all use similar logic to increase the total amount of assets to attract investment.
These three types of market patterns show their respective characteristics in different economic systems. By understanding the definitions and mechanisms of these types of market patterns, we can better grasp their operations and impacts in the market.
3. Bitcoin itself relies on mining machine manufacturers to form a price flywheel. Ethereum in the POW era was a dividend-sharing platform, and later turned to POS through ICO.
The dividend plate, mutual aid plate and split plate in the three-plate theory are applicable to the analysis of economic systems such as Bitcoin and Ethereum in the POW era. Bitcoin itself is not a dividend plate. It has not gone through the fundraising process, and its pricing is not really formed until the pizza is purchased. The dividend plate characteristics of Bitcoin are reflected in the mining machine manufacturers. Mining machine manufacturers obtain funds by selling mining machines, and use these funds to hoard Bitcoin, push up the price of Bitcoin, and attract users to buy more mining machines, forming a positive flywheel effect. When it collapses, it will be a reverse flywheel, and the collapse speed will also be very fast. The first super-drastic price change in history was in 2013 when BTC rose from more than ten US dollars to more than one thousand US dollars. The reason was the emergence of ASIC mining machines that year. The intervention of mining machine manufacturers really made the price of Bitcoin produce a flywheel.
Ethereum started as a dividend-sharing platform with a more complicated mechanism. Unlike Bitcoin, Ethereum raised funds through ICO and later switched to POS mechanism, which also led to subsequent problems of Ethereum.
4. Sunk costs are crucial to market returns; Bitcoin mining machine costs are stable, which can suppress selling when prices fall, while low-cost staking under Ethereum POS can easily lead to price drops
Sunk costs are key to ensuring sustained returns. Taking Bitcoin as an example, if the sum of sunk costs and secondary market liquidity is less than the realizable dividends (i.e. the portion that can actually be realized), the market will face the risk of collapse. The collapse model clearly shows that when new incoming funds and external liquidity are not enough to cover the realizable dividends, the market will collapse. To prevent this from happening, mining machine manufacturers need to ensure that new funds continue to enter, which is usually done by raising the price of Bitcoin to attract miners to buy more mining machines, thereby increasing liquidity. However, this price increase mechanism will eventually encounter bottlenecks, and the dual pressure of price and mining machine costs may cause the market to enter a death spiral - that is, both prices and mining machine values fall, forming a negative feedback loop. The operating costs of Bitcoin mining machines include fixed costs (the mining machine itself), variable costs (electricity costs), hosting fees, and maintenance costs. These costs are unrelated to Bitcoin's price fluctuations and are usually settled in fiat currency, so miners will have an average cost in mind. If the Bitcoin price is lower than this cost, miners may choose to shut down, which will reduce the selling pressure in the market and help the price to recover.
After Ethereum switched to POS (Proof of Stake), the cost of mining machines and related expenses became zero, so there are no more variable costs such as electricity costs. This has led to a significant reduction in the cost of staking mining, and miners are not subject to the same market pressure. This has led to a large amount of low-cost staking in the Ethereum network, and miners' selling of Ethereum will not be price-restricted, which may cause prices to fall further. Under the POS mechanism, the high cost of new entrants into the market has hindered the entry of new miners, which is different from the situation of Bitcoin miners. Bitcoin miners entered the market earlier and the cost was relatively low, which enabled them to participate in projects more actively and promote market development. Under the Ethereum POS system, the entry barrier is high and there is no corresponding incentive mechanism, which makes it difficult for new projects and funds to enter the market, further leading to a decline in market activity.
In general, Ethereum's weak position in the current market stems from the cost structure and market behavior of its POS mechanism, which is in sharp contrast to Bitcoin's mining machine model.
5. Solana generates inflation through staking. Its market structure is similar to dividends and splits. The official actively participates in ecological projects to promote the value of tokens.
When analyzing Solana, we need to consider it from the perspective of the entire plate. Solana uses a mechanism similar to POS, which is similar to POH. It is a public chain that generates blocks through staking. The newly added Solana generates inflation through staking, so Solana can be regarded as a dividend mechanism similar to Ethereum. Unlike Ethereum, Solana has very limited nodes. Although it can run nodes by itself, the threshold is extremely high. Solana is financed through venture capital, and its chip concentration is much higher than that of early Ethereum. Due to the high concentration of staking and nodes, the new selling pressure is also concentrated. Many large nodes such as Helius have close ties with the Solana Foundation, which makes the selling pressure almost linked to the decision-making of the Solana Foundation.
Solana's market structure is similar to a dividend-to-split model, and Solana is unique in its strong official market participation. The founders and foundation of Solana, including some branches such as Super Team, actively participate in the secondary market of its ecosystem, significantly affecting the market performance of the project. Ethereum is very taboo about this kind of participation, and relevant parties Direct intervention in the market is generally avoided. Solana's stakeholders actively support and promote the project on social networks, which has a direct impact on the market.
When Solana officials participate in the secondary market of ecological projects, their main purpose is to use their lower costs and huge influence to indirectly affect the asset prices of these small projects (such as Radium and Jupiter). Compared with Solana itself, the market value of these ecological projects is smaller, so only a small amount of funds is needed to manipulate their prices or cause price fluctuations through specific events.
The Solana Foundation uses low-cost Solana tokens to push up the prices of specific ecosystem projects and indirectly boost the value of the Solana tokens themselves. This approach is similar to Ethereum's strategy of promoting price growth by promoting split projects in the early days. Solana officials have concentrated resources and social influence to drive up the prices of low-liquidity projects such as Hive Mapper and Mobile. These operations often trigger strong market reactions and attract more developers to join the Solana ecosystem.
This strategy not only keeps Solana relevant, but also makes Solana tokens the standard for measuring assets through the "staking" effect. Holders not only rely on staking income, but can also obtain high returns by participating in various projects within the ecosystem. Through this method, the Solana Foundation has increased the liquidity of the token and achieved a token price increase without a large consumption of market capitalization funds.
6. To judge whether the dividend market is about to collapse, we need to pay attention to whether there is new capital, liquidity and sufficient profit realization.
The key to helping everyone optimize their investment strategies and achieve better results through the Three Plates Theory is to identify the precursors of the plate's collapse. Before the plate collapses, the daily gains are good, but the key is to exit in time before the collapse or when there are signs of collapse, so as to maximize profits. To analyze these plates, you only need to understand the collapse model of each plate and the basic way for the plate owner to make a profit. By reversely deducing these methods, you can find the best time to exit.
For dividend-sharing stocks, the precursor to their collapse can be judged by several key indicators. If the sum of the new capital inflows (i.e. the newly added sunk costs) and the external liquidity (such as the liquidity of the tokens issued by the dividend-sharing stocks on exchanges or DEXs) is less than the profits generated within the stocks, and these profits can be directly converted into cash to crash the stocks, then the stocks are likely to collapse.
Traditional dividends usually only work in one way: either mining is restricted, resulting in no more income, which is equivalent to the mining machine becoming a useless asset. In this case, it can be considered a pure act of cutting leeks. To analyze the dividend plate, you first need to identify which plates meet the dividend plate model. The key is to see whether there is a silent cost - that is, an irreversible investment that cannot be refunded. For example, in some GameFi projects, after purchasing NFTs, these NFTs are non-refundable and the funds are locked. This model can be regarded as a "mining machine plate". After players purchase virtual assets, they earn income by killing monsters, which is similar to the early play-to-earn model. When analyzing the mining machine plate in the market, you first need to identify what the "mining machine" is. For example, in some projects, NFTs can be regarded as mining machines. However, in some more complex projects, this may not be intuitive and requires in-depth analysis. For example, in the Re-staking scenario, after staking to TVL, you may face losses caused by market fluctuations and miss the opportunity income of other DeFi projects during the staking period. If the final airdrop income is lower than the expected opportunity cost, then this difference can be regarded as the cost of the "mining machine". Secondly, to evaluate whether the design of the plate is reasonable, the key lies in whether there is an "electricity fee" logic. If the plate lacks electricity fee logic, the sunk cost of entering users will not increase over time, which may eventually lead to a system crash. The essence of electricity fee logic is to ensure that the cost of unit output is linked to time, rather than simply output or revenue. For example, in the Bitcoin network, electricity costs are an important factor; in GameFi, physical exertion can be regarded as electricity costs, and physical exertion can only be compensated by the gold standard. Electricity costs may be affected by certain floating factors, thereby dynamically adjusting the cost of unit output. This game relationship can provide a guarantee for the stability of the plate. The final decision on whether to participate in a certain plate lies in judging whether the person behind the plate is trustworthy. There are many dividend plates on the market, and which one to choose depends on the pattern of the plate.
When evaluating a plate, the key is to see whether there is a flywheel effect - that is, whether there is a positive correlation between the sales of mining machines and the price of the currency. If there is a flywheel effect, it means that the plate is in an upward period and there is still some time before it collapses. For example, before the early Filecoin was issued, the exchange had already launched convertible File futures, and the prices of these futures were strongly pulled up, mainly due to the sales of mining machines. If it is found that the sales volume of mining machines is large, but the price of the currency has not risen accordingly, it may indicate that the market has not been effectively promoted, or the project party lacks a pattern, and it is even possible to run away with the money directly after the opening.
In addition, attention should be paid to liquidity management in the early stages of the project. Taking Bitcoin as an example, there was no large trading market in the initial stage. Last year, some DePIN projects also started from smaller liquidity platforms, which could avoid huge selling pressure due to insufficient liquidity in the early stage, leading to a sharp drop in market prices. If the owner can control liquidity in the early stage and recover chips at a lower price, it shows their precise grasp of the project rhythm and pattern. If the mining coin is directly listed on a large centralized exchange, and there is no pre-market quotation and pre-market liquidity before, it is likely to cause a crash.
7. Mutual aid needs to guard against liquidation thresholds, arbitrage loopholes, and withdrawal order issues; when the global debt exceeds the liquidable assets and external liquidity, it will eventually collapse
The key to mutual aid is to prevent three core issues: liquidation thresholds, arbitrage loopholes and withdrawal order.
First, the liquidation threshold refers to the profit ceiling clearly set in the plate. Once this ceiling is reached, investors must reinvest to continue to make profits. This mechanism prevents the possibility of unlimited returns and ensures the stability of the plate. The existence of the liquidation threshold is similar to the traditional exit mechanism, which limits investors from continuing to profit from it after reaching a certain return, in order to protect the overall operation of the plate.
Secondly, obvious arbitrage loopholes must be prevented. For example, in the early dual-pool mining model, investors could continuously withdraw principal and income, eventually leading to the exhaustion of the entire liquidity pool. Therefore, a reasonable plate design should avoid such arbitrage opportunities, ensure that every investment and income has a real economic basis to support, and prevent the plate from collapsing due to arbitrage behavior.
Third, the withdrawal order is crucial. In a closed economic system, the gains and losses among participants need to be distributed in an orderly manner. This is similar to the logic of killing numbers in a casino. By controlling the profit and loss order of each participant, the stable flow of funds in the system is ensured, and the owner of the plate can extract a certain fee from it. If the withdrawal order is chaotic and some participants make continuous profits, others will lose interest in participating, eventually leading to the collapse of the plate. Therefore, the plate needs a clear withdrawal order to maintain the balance and sustainability of the system.
Finally, the risk of mutual aid is relatively low, and its core competitiveness lies in its high returns and quick returns. If the plate cannot provide returns that are much higher than other competing products, it will be difficult to attract new participants. The plate owner makes profits through pumping and rat trading to ensure the continuous flow of funds, but once the global debt exceeds the liquidable assets and external liquidity, the plate will be unsustainable and eventually collapse.
8. The collapse of the split market is affected by market Beta, split ratio, and stock withdrawal rate. It is necessary to monitor market dynamics and capital flow.
The split model is relatively complex, and there are three main indicators that affect the crash:
The first is market beta, which refers to the average rate of return of other products in the same market. For example, if the annualized return of one mining disk is 50%, and the annualized return of another disk reaches 70%, investors will naturally turn to the disk with higher returns. Market beta directly affects the inflow of new funds and investors' expectations. High returns mean more people are willing to participate, thereby increasing the security and attractiveness of the disk.
The second indicator is the split ratio, which is the speed at which new splits are derived. If there are no new projects or funds coming in, the split rate will slow down. A typical example is FriendTech last year, which relied on well-known KOLs on Twitter to issue its own coins to maintain splits. However, due to the limited number of influential KOLs on Twitter, the project could not continue to grow rapidly, and eventually the expansion power of the split was exhausted, leading to a collapse.
The third key indicator is the rate of withdrawal of existing funds. That is, the speed at which investors who have already participated in the market withdraw their funds from the market. If the withdrawal rate is too fast, even exceeding the inflow of new funds, the market will face the risk of collapse. This indicator is particularly easy to observe. The stage of the market can be judged by monitoring whether the project party has obvious behavior of intervening in the secondary market and the market's discussion on the new split market. If the number of new split markets decreases and the market enthusiasm decreases, it means that the market has entered the final stage and investors should exit in time.
9. Stablecoins are mutual aid, relying on liquidation mechanisms and pumping logic, and need to guard against arbitrage loopholes to maintain stability
Stablecoins are generally mutual aid tokens. Taking Luna as an example, its operating model is to use Luna as collateral to generate UST. When UST is unpegged, the system will burn the UST supply and exchange it for Luna, thereby providing a liquidation threshold when the price fluctuates. When the UST price is lower than 1, the system will reduce the supply by destroying UST; when it is higher than 1, the supply will be adjusted through other mechanisms. This logic relies on expanding the overall circulation of UST and generating a certain amount of wear and tear in transactions through the right to mint coins, which is equivalent to an implicit pumping mechanism.
However, Luna's collapse was due to an obvious arbitrage loophole, and the system was unable to effectively manage the withdrawal order. When the on-chain liquidity is insufficient to cope with panic, the mutual aid disk that lacks a self-stabilizing mechanism faces collapse. Similar examples include OHM, which also relies on the liquidation mechanism and the logic of pumping water, and eventually collapsed due to arbitrage loopholes.
If stablecoins want to break away from this Ponzi nature, they usually adopt a split-plate model. For example, USDT and USDC become Quote Tokens by being used as trading pairs in exchanges, thereby establishing a stronger position in the market and promoting the expansion of their own scale.
