Hello Steemit community. This is is my first post here. I felt compelled to write this article to inform other new investors of the inner workings of the EOS ICO.
EOS ICO
If you're not yet familiar, EOS runs on an Ethereum contract and has a very unique distribution model. For the available distribution periods, there will be 2 million tokens distributed every day, for the next 341 days based on the number of contributions.
What this basically means is that you're in the blind about how much you're paying for an EOS token.
SCANNING THE NETWORK
I've found that you can use http://eosscan.io to see the current token price based on the price of ETH/number of contributions. It's a great tool which scans the ethereum network for the contract address for incoming contributions.
BUT... even when you think you know what you're doing, you might actually be falling for a gambling scam. Here is a screenshot I captured 1 second before the end of the 36th period:
It shows that 14,033 ETH has been sent to them.
Here's what the eos scan shows:
Over 16,000 ETH, which came out to a loss.
NOT SO ANCIENT PYRAMIDS
Here's where the Ponzi scheme comes into play:
- EOS has partnered with Bitfinex
- Bitfinex has the most market share for EOS in pairs such as EOS/ETH, EOS/BTC, EOS/USD (source: https://coinmarketcap.com/assets/eos/#markets)
- There have been suspicions of EOS pumping their own tokens by using the Ethereum they receive to buy back the EOS that they granted to participants (typical Ponzi scheme tactic)
By tracking the following transactions you can see that Ethereum from the ICO has been going into a Bitfinex hot wallet: https://etherscan.io/address/0x9937dbb2128b55c44d8af7bf36fd76796a814cf4#internaltx
PUMP IT UP
Many people speculate that most likely the ETH is then used to pump EOS, because let's be real - who wants to buy a coin that is coming straight out of an ICO when the ICO is still active? If you say traders then I would argue that there a much higher gains to be made from other crypto, especially now.
All-in-all it seems like a very sketchy operation.
Maybe that's why Daniel needed someone to protect him at the Consensus
I don't ever see Vitalik with a bodyguard ;)
Let me know your thoughts and please keep in mind that this isn't an accusation but rather a collaboration of mine and other members' thoughts and feelings in the crypto community.
Sources:
https://eos.io
https://eosscan.io
https://etherscan.io
https://bitcointalk.org/index.php?topic=2000232.0
https://bitcointalk.org/index.php?topic=1996676.0
https://coinmarketcap.com
https://cointelgraph.com
Probably you are right and they are manipulating the ICO price with the ether they receive.
But all the Blue Chips companies are also doing this no ? They buy their own shares on the market ?
So nothing new here ?
Whether it's new or not, it still doesn't make it safe for investors to participate in. They got their initial chunk of money in the first period and now just recycling 15-20K ETH for the next year, probably hoping that many people will buy and spark a fire to create an actual demand and stable price, which I don't see happening.
There is probably no such thing as a safe crypto investment :-) I agree this year ICO thing is quite strange. They are at a point they dont need the extra money anymore so its very tempting so stabilize the value with their ether holdings.
Maybe its even a nice gesture towards early investors
But that is the exact definition of a Ponzi scheme, and at one point one of 2 things will happen:
#1 leads to #2 through a natural progression so in either case this is a huge theft both in the digital realm and the world financial markets, and crypto accounts for around 0.15% of the ENTIRE world economy. So it's no surprise that the US intel and forces are at war with crypto.
For me a Ponzi scheme would require new money entering to cover for older lost money.
If the statement of them supporting the EOS price is true its always the same money going in and out.
This can continue until the EOS price goes up but than it shouldnt be necessary anymore since people have a different price perception and will act accordingly
Apart from this current valuation is quite logic compared to other cryptos. Its a promising new player with some big names linked to it.
I have no idea of what all those initials stand for but this article makes me wonder if any crycryptocurrency is safe to invest in.
ICO is an Initial Coin Offering, which is kinda a spin on an Initial Pubic Offering (IPO)
ETH - Ethereum Network
Thanks for explaing.
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STOPGreat post..thanks @nsepia. I'm gonna be your first follower :)
Thanks! I'll be on vacation for a few weeks but maybe I'll try to write a few articles, we'll see.
Have a good one !
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STOPexcellent post.
Excellent
Thanks.