Recently, I’ve been pondering a question: why do some people make dozens or even hundreds of times profit on dirt-cheap tokens, while others get trapped immediately after entering? Actually, there’s a complete logic behind this, worth analyzing carefully.

First, let’s talk about what “dirt-cheap tokens” are. The term sounds informal, but in the crypto world, it refers to projects that can explode in a short period, with hundreds or thousands of times gains, or even crazier increases. But there’s a premise: you need to get in early enough, the data when it rises is real, and the liquidity pool is sufficient for you to exit safely. Otherwise, it’s just paper wealth—visible but unreachable.

Dirt-cheap tokens fall into two extremes. One is the “Pixiu contract,” which basically means only in, no out—once you buy in, you can’t sell. This scam exists both domestically and abroad, operated mainly by the same old faces, just rebranded under different aliases. There’s also an upgraded version of Pixiu, which copies the names, Twitter, and Telegram accounts of popular dirt-cheap tokens, but once the contract address changes, you buy in and become a true sucker.

The other type is genuine community-led meme coins. These projects, to become legendary, almost rely solely on community effort. Logically, this model itself isn’t flawed, but it requires two conditions. First, once you buy in, you must follow the project team’s instructions and strategies. Second, you need to be able to bring in people around you to participate.

YFI’s success back in the day is a good example. People thought it was because of technical prowess. I’ll say directly: any project team bragging about their tech is just talking nonsense. What really made YFI rise? It’s the “verification system.” The community would bring in large holders, and periodically verify their holdings. As long as your holdings remain or even increase, you can stay in the group. If you reduce or clear your position, you get kicked out. This ensures the top holders’ chips stay put, and small retail investors can’t stir up trouble. Without big selling pressure, the price rockets. If someone tries to dump, the big holders absorb the sell-off—everyone wins.

There’s also the “newcomer recruitment” system—invite links, airdrops, whitelists, etc. Essentially, it’s an incentive for everyone to hold and add more. Staking mining, staking dividends, deflation mechanisms—all mean the same thing: lock your chips, give you some sweeteners to keep holding.

But here’s a crucial point. Truly legendary projects only appear in community-led dirt-cheap tokens, and they must meet several conditions. First, large holders must participate in verification, recruitment, staking, and similar mechanisms. Second, you need to get in early enough so your chips are cost-competitive. Third, it’s best if you can contact the project team, understand their plans, and judge whether they have real vision. AMA sessions, Telegram, Discord—these are channels. Asking questions is always good. If they ignore you, try again. If still ignored, just walk away.

The most core point is: if the project team is your friend, or your friend knows the team, or you have access to different resources, then it’s a different story. I can’t say too much about this, as it involves many core interests of project teams. But I can say plainly: this is the key. You might meet all the previous conditions, but if you lack this, even huge funds entering will just get you cut.

Imagine you’re a top ten holder, but you don’t know the project team, or even what good news they’ll announce next. You’re just attracted by the hype, deluding yourself into thinking it’s an overseas “golden dog,” with big dreams, and you want to go all in. Do you really think you’re safe? From the project team’s perspective, all your data is transparent. You think you’re a big holder, but they don’t give you any permissions. You’re like a wolf wandering into a wolf pack’s territory, with dozens of eyes watching you, trying to make ten, hundred, thousand times profit. Isn’t that naive?

Sometimes, you see friends making 50x or 100x on a dirt-cheap token, cashing out, and think they’re awesome. But once you understand the logic, I can only say they’re lucky. Very lucky. Because every dirt-cheap project has market makers. Good communities are built by everyone’s effort. Your friend might just be an ostrich—buy and hold without telling anyone. The project’s success depends entirely on those constantly operating small partners. Your friend is the kind project team hates—no effort, just picking fruit. Basically, they’re just lucky not to get cut. That kind of luck isn’t something everyone has. No one can be lucky all the time in the short term. But if you rely on that luck to play dirt-cheap tokens, over the long run, it’s all arranged for you.

Now, about “Golden Dog.” A good dirt-cheap token can turn into a “Golden Dog,” but the “Golden Dog” itself isn’t meaningful. If you talk about tech, it has none. If you mention other things, many also lack substance. Eventually, even the vision and roadmap can be absent. These projects might have already gone public or raised huge funding, but their upside is limited, and the downside is unlimited.

As for regular projects—angel rounds, seed rounds, private placements, public offerings—often they raise a lot of money, with top-tier teams. Isn’t that just “doomed”? These projects are just for show. The announced news is usually internal info that’s been digested multiple times before release, aimed at trapping retail investors. Retail investors want 50x or 100x profits, but angel, seed, and private placements are already set for thousands of times. Why should you profit? Retail investors’ only role is to cover the exit of insiders.

These projects tell stories, claim to have technology, aim for real-world applications, or introduce new concepts. But are these really important? Bitcoin is from the ancient era—slow transactions, no scaling, does it have tech? I’ve always wondered why everyone looks for causal relationships between real-world use and coin prices. Do you worry about Feng Shui when flipping houses? Do you trade stocks to help your boss get through tough times? Then you’re just wasting your effort. Do you buy coins just to see real-world applications? Some public chains have been around for years, but as long as I don’t see real adoption, I can keep telling stories.

If you don’t have channels or resources, don’t bother with regular projects—they’re not worth much. Secondary market trading is also an option; most will end up losing everything anyway. Ultimately, whether dirt-cheap tokens or other projects, the most important thing is to understand the underlying logic, know what you’re doing, and not follow blindly. Watching the market and researching projects on platforms like Gate, thinking more, asking more—this is always better than blindly going all in.