Does a Wave of Shutdowns Prove Online Mutual Aid Is Unsustainable? Absurd!

Some say that the wave of online mutual-aid platforms shutting down in earlier years has already proved that the online mutual-aid model is unsustainable.

I think that conclusion is drawn far too early — even absurd.

To judge whether an institution is sustainable, you should at least let it run in a relatively complete institutional environment, let it undergo enough time of practice and adjustment, and then observe whether it died because its own mechanism could not be maintained, or was terminated because the external environment changed.

The development of online mutual aid in China, however, never went through that process in full.

The wave of shutdowns certainly exposed many problems in the industry: some platforms pursued scale excessively, some had immature rule design, and some drifted away from what mutual aid is. But at most, that proves that some platforms and some practices of that time had problems — it does not prove that the mechanism of “online mutual aid” itself is unsustainable.

When something that has not yet fully shown its potential and has not yet completed its institutional iteration exits on a large scale because the external environment changed, and one then uses that exit to conclude backwards that it is “inherently unsustainable,” the logic simply does not hold.

In fact, if we set aside the specific successes and failures of certain platforms and simply study the operating mechanism of online mutual aid itself, we find not only that it may be sustainable, but that it rests on some very interesting foundations for sustainability.

1. Online Mutual Aid Does Not Depend on Amassing Huge Capital

This is a very important feature of online mutual aid.

Traditional insurance must collect premiums in advance, build reserves, and safeguard future payouts through a whole system of asset-liability management.

Online mutual aid can take another path:

Once a risk occurs, members of the community share the cost together according to rules agreed in advance.

In other words, what it truly depends on is not an ever-growing pool of capital, but a mutual-aid community large enough, structurally stable enough, and whose members are willing to keep taking part.

As long as that community retains sufficient capacity to share costs, the protection can continue to exist.

So the core question for online mutual aid is not:

“How much money have we saved up?”

but rather:

“How many of us are still willing to keep helping one another?”

These are two entirely different logics of protection.

2. The Law of Large Numbers Itself Is an Important Basis for the Sustainability of Mutual Aid

Illness and accident are uncertain for a specific individual, but for a sufficiently large group, the probability gradually shows statistical regularity.

If a community has several million or even ten million people, then roughly how many qualifying mutual-aid events will occur in a year can be estimated over time through data.

This means mutual aid is not a kind of unforeseeable “emergency collection.”

On the contrary, once there are enough participants and the membership is sufficiently dispersed, individual uncertainty can be spread across the group.

One person cannot bear hundreds of thousands of yuan in critical-illness costs, but if several million people each bear a very small part of it, it can become a cost everyone can afford.

This is precisely the most basic mathematical foundation of risk-sharing, and an important basis for the long-term existence of online mutual aid.

3. “However Much Occurs, That Much Is Shared” Has a Built-In Capacity for Self-Adjustment

Online mutual aid has another very interesting feature: it naturally has a certain capacity for dynamic adjustment.

If mutual-aid events are relatively few in a given year, members share less;

if there are relatively many, their share increases.

Unlike certain fixed-fee models, it does not have to predict risk and cost very accurately decades into the future.

It can adjust dynamically according to events that actually occur.

In that sense, online mutual aid is not a wholly static institution, but a system that can keep adapting to actual changes in risk.

As long as those adjustments remain within a range acceptable to the vast majority of members, the system can keep running.

That elasticity is itself a capacity for sustainability.

4. It Even Contains a Natural “Self-Correction Mechanism”

This is the point I think is most worth studying about online mutual aid.

Suppose a mutual-aid plan’s institutional design is unreasonable, causing contributions to keep rising.

What happens?

Some members who consider it “not worth it” will leave.

And if too many leave, the platform must reexamine the rules: is the protection responsibility too broad? Is risk control inadequate? Is there too much fraud? Has something gone wrong with the membership structure? Are costs too high?

Conversely, if a mutual-aid plan is reasonably priced, stable in its rules and fair in settling claims, more people will be willing to stay for the long term, and even more will be drawn to join.

So a healthy online mutual-aid community inherently contains market-like feedback:

whether the rules are good will ultimately show in whether members are willing to keep taking part.

That feedback forces the mutual-aid organization to keep searching for the balance point between “degree of protection” and “burden on members.”

And finding that balance point is precisely the key to sustainability.

5. The Internet Has Drastically Lowered the Cost of Organizing Mutual Aid

Mutual aid has in fact always existed in human society.

Clan mutual aid, trade-union mutual aid, industry mutual aid, community mutual aid and charitable mutual aid are essentially nothing new.

The biggest problem in the past was that the cost of organizing was too high.

It was very hard to get several million strangers to build a transparent, efficient, low-cost mutual-aid system.

The internet changed that.

Identity verification, online joining, publication of rules, case investigation, member oversight, cost-sharing and information disclosure can all be done online.

What once required a vast organization can now be supported by an information system.

So the real innovation of online mutual aid is not that it invented “mutual aid,” but that:

for the first time, the internet made ultra-large-scale mutual aid among strangers a low-cost possibility.

Technological progress will not make that capacity disappear; it will keep lowering the cost of organizing.

6. The Marginal Cost of Online Mutual Aid May Fall as Scale Grows

Whether a mutual-aid community has 100,000 people or 10 million, the cost of its back-end systems does not rise a hundredfold.

Many kinds of infrastructure — rule-making, system development, risk models, case-review systems, information-disclosure systems — clearly exhibit economies of scale.

As membership grows, these fixed costs can be shared by more people.

At the same time, the more members there are, the more fully risk is dispersed, the richer the data, and the more accurate the judgment of illness incidence, fraud risk and contribution levels may become.

So online mutual aid contains an important positive cycle:

more participants → more dispersed risk → richer data → finer management → lower unit operating cost → more reasonable burden on members → greater ability to attract and retain members.

If that cycle can be established, it is in itself a very strong mechanism for sustainability.

Of course, the reverse — a negative cycle — is also possible, which is why institutional design matters so much.

7. It Does Not Require Every Member to Receive a Fully Certain Promise

This looks like a shortcoming, but it may in fact be a source of institutional flexibility for online mutual aid.

Insurance emphasizes contractual certainty: how much you pay, what protection you receive, must form a clear legal obligation.

Mutual aid places more emphasis on community members bearing risk together according to the rules in force at the time.

This means online mutual aid does not necessarily need to promise a level of protection that stays completely unchanged for decades.

If economic conditions change, the mutual-aid amount can be adjusted;

if medical costs change, the rules can be adjusted;

if the age structure of members changes, the way costs are shared can be adjusted;

if risk incidence changes, the system can be adjusted too.

As long as such adjustments are transparent and fair, and member consensus is formed through reasonable procedures, the mutual-aid system can keep adapting to its environment.

An institution that is truly sustainable need not be one that never changes in a hundred years; it may instead be one that can keep adjusting itself as the environment changes.

8. The Most Important Point: Society’s Demand for Low-Cost Risk Protection Will Not Disappear

Whether a model can exist for the long term ultimately depends on whether there is long-term demand for it.

Critical illness, accidents and family financial risk will not disappear.

At the same time, not everyone can afford sufficient commercial insurance, and not every risk is suited to being solved entirely by government finances.

So between social security and commercial insurance there inherently exists a very broad space:

Are people willing to pay a very small cost in exchange for the chance to have a group share major risks together?

I believe that demand will exist for the long term.

As long as the demand exists, someone will always be searching for lower-cost, more efficient ways of sharing risk.

Online mutual aid is one of them.

So what exactly did the wave of shutdowns prove?

It proved that some platforms failed.

It proved that problems once appeared in the industry.

It proved that online mutual aid needs more scientific institutional design, more transparent governance and clearer boundaries for operation.

But the one thing it did not prove is this:

that “people sharing major risks with one another through the internet” is itself unsustainable.

Indeed, the law of large numbers provides the mathematical basis for dispersing risk, dynamic cost-sharing provides the flexibility to adapt to changing risk, the internet lowers the cost of large-scale organizing, economies of scale can bring down unit management cost, members’ freedom to come and go creates a feedback mechanism, and long-standing demand for protection gives mutual aid its social foundation.

Add to that the fact that it does not require amassing a huge capital pool as a precondition for operating, which removes part of the risk that comes with funds sitting idle for long periods — and taken together, these factors at least show that:

online mutual aid has a potential for sustainability very much worth studying seriously.

Whether it can ultimately last ten years, twenty years or longer must be answered by practice.

But China’s online mutual aid never really completed that experiment.

An experiment terminated halfway cannot be used, in itself, as evidence that the experiment failed.

So rather than rashly declaring that online mutual aid has been proven a failure by history, it is better to ask a more valuable question:

If online mutual aid were given clear boundaries, reasonable rules, transparent governance and enough time to perfect itself, how far could it actually go?

I believe we have not really seen that answer yet.