When data fraud and traffic bribery become the basic operations of the industry, what is left in the crypto sector?

Author: danny

Recently, the project is undergoing a brand/mainnet upgrade and token swap, so we have been in contact with various exchanges. We have built from 2017 to today, and these standard processes are quite clear. Apart from the corresponding compliance procedures and code audits, the rest is mainly about the market budget, how many new users/traffic it can bring, and how to allow existing users to benefit, etc. The project party needs liquidity and new trading venues; exchanges need users and trading volume, which is a mutually beneficial arrangement.

The interesting part is that after a simple business communication, it goes to the research department for evaluation. They raised several points that could lead to our listing being rejected or require an increased budget due to certain conditions not being met. I’ll mention a few interesting ones:

First, they said our data and popularity are insufficient, specifically pointing out our lack of social media data and on-chain data, and they provided several examples of similar projects in the same track. I was puzzled; you are all in the research department, studying projects every day, can’t you tell the authenticity and validity of the data? Come on, an account with hundreds of thousands of Twitter followers has only a few thousand views on its tweets and fewer than 10 comments, and you tell me that’s real? Then, on-chain data consists of multiple transaction records within a single transaction hash; are the retail investors in your project all experts? Can everyone just package transactions by connecting to the RPC interface? This is clearly unreasonable, right? Especially since professional AI data labeling itself has a threshold; it’s unlikely that a large number of labelers would appear to label the same set of data, especially since the subsequent data verification and cleaning costs are higher than the labeling itself, so it’s even less likely unless you don’t care about costs at all or your purpose is not for the data itself.

Second, there’s the endorsement from investment institutions. Most projects going public now (except for memes) need the backing of major VCs. But as an old project, from FunctionX in 2019 to today’s PundiAI, we have been building for over six years using our own money and have never taken a penny from outside. From our perspective as "old-timers," isn’t this a good thing? Purely community-driven, no VC control, and emotionally, it’s a very "sentimental" thing, right? Yet in the eyes of the research department, this has become synonymous with lacking formal institutional endorsement, being "not legit," and having no popularity. I don’t even know how to respond to this…

Third, there’s the token circulation and valuation. From 2019 to now, all the tokens have been unlocked, and our market cap = fully diluted valuation, with nearly 70% of the tokens locked in validator nodes. Then the big shots in the research department said that there’s a lot of selling pressure. I was puzzled; let’s not even mention that most of the tokens are in validator nodes, we are purely a community-driven market, who would sell? Secondly, our old tokens have been listed on major exchanges before; after six years of ups and downs, would they still need to sell on your exchange? Furthermore, the selling pressure is proportional to the market fully diluted valuation; our market cap and fully diluted valuation are less than 100 million. An AI data layer with business, products, customers, and revenue is only worth 100 million, why don’t you look at those projects that have just launched with a fully diluted valuation of 1 billion? Their selling pressure should be of greater concern, right? No, their later selling pressure should be of greater concern, right?!

There are many more points to complain about, but I won’t go into detail. I can understand that the research experts have to look at many projects every day, each with their own viewpoints and data dimensions, and this involves a lot of professional knowledge, but at the very least, they should be able to distinguish between truth and falsehood.

I don’t know when it started, but traffic bribery, data bribery/fraud, project skin-swapping (I’ve even heard of founder skin-swapping?), airdrops to studios, and then handing them over to market makers to sell, etc., have surprisingly become basic operations for projects to go public.

Sometimes I feel that going public, especially for some early coins, is very similar to venture capital; it’s all about the people/team's fundamental qualities. If going public relies on these tactics to exchanges and VCs, then the future development of these projects is truly concerning.

We have been in this circle for so long, and we are somewhat aware of these tricks and tactics. It’s not that we can’t do it, but we are unwilling to do so. Because in the end, these things will only benefit studios, gray industries, and manipulators, at the cost of new retail investors' money, the focus of builders' work shifting, and the overall stagnation of the industry. (P.S.: To say something shameless, the current airdrop tricks are just what we left over from back in the day.)

We have seen bulls and bears and storms, so we know that maintaining our original intention is really not easy. Sometimes I really miss the friends I met during the ICO boom in 2017/2018 (many of the bosses I met back then have retired); the community back then was poor, but every topic we discussed was about how to improve efficiency/safety, how to push to market, and how to support each other in case of hacks, etc., to win together. Back then, introducing a VC or an exchange listing opportunity was all voluntary (omitting a thousand words here), but now it’s all about various kickbacks/referral fees/management fees.

I really miss the pure us from that time.