Bags vs AI Projects: A Conversation About Risk-Taking Approaches

Trader CryptoD recently suffered losses on the Bags project. This experience led him to a deep reflection on the fundamental differences between two types of projects. His insights are worth the market participants’ serious consideration because they involve how to choose truly healthy projects.

Where Are the Problems with the Bags Model

CryptoD pointed out that there are several obvious issues with projects on the Bags platform. First, there is an over-reliance on news and hype, with the project’s popularity entirely driven by media coverage rather than the actual progress of the product itself. Second, the founders’ personalities are unstable, which makes the project’s narrative and direction prone to sudden changes. More importantly, most of these projects come from well-known teams in the Web2 space. They have some influence on traditional internet platforms but face cold reception when seeking Web3 funding, ultimately choosing to package narratives in the crypto market to consume market attention.

Under this model, the growth potential of the project is essentially limited because growth does not come from product iteration or community building but from pure news bombardment. When the novelty wears off, the market loses interest.

Risk Transfer vs. Co-Growth

CryptoD summarized the essence of the Bags model with a key statement: this model essentially shifts risk onto the market. In other words, project teams are betting on market enthusiasm rather than sharing risks and growth with participants.

Why AI Projects Are Seen as Promising

CryptoD believes that AI projects experiencing a pump show completely different characteristics. Most of these projects start from a very small scale, without hype or funding backing, relying entirely on the product itself and community support. More importantly, the project, narrative, and product are built and grow together with the community. This means participants are not passive recipients but active builders.

In this model, risks are shared, and rewards are shared as well. When the community grows, the project grows; when the project iterates, the community also evolves. This is a true symbiotic relationship, not a one-way transfer of value.

Insights for Market Participants

Distinguish the true intent of projects

When choosing projects, ask yourself: Is this project consuming my attention, or inviting me to build together? The former usually manifests as continuous big news and major events, but with slow product progress; the latter involves the community’s voice having real influence on project decisions.

Observe how risks are borne

If the project team shifts all risks onto market participants while keeping a safe distance themselves, that is a dangerous signal. Truly healthy projects should have aligned interests between the team and the community, all working towards the project’s success.

Summary

CryptoD’s sharing touches on a core issue in the crypto market: what kind of projects are worth participating in. The problem with the Bags model is not its existence but that it shifts risk onto the market, which is fundamentally an unequal transaction. In contrast, projects that grow together with the community and are driven by the product, although starting small, establish a healthier ecosystem foundation. For market participants, learning to distinguish these two models and choosing projects aligned with the interests of the team and community is key to long-term survival and profit.