Monday, December 13
Is Cardano A YouTube Scam?
“DPR” Uses NFT Tech to Fundraise for Prison Reform & Freedom
The Rise of the Meme Economy WSJ
Twitter Memes of the Week
Is Cardano A YouTube Scam?
Cardano — a Web 3 blockchain which is often touted as an “Eth Killer” — came under scrutiny this past week when a Twitter thread exposed a damning, $100 million dollar “incentive” program between Cardano and YouTube Influencers.
The dossier, which was leaked on Dec 3, came from investment blogger, Jack Niewold, Founder of Crypto Pragmatist. It follows:
Mr. Niewold goes on to explain that about 70% of Cardano is locked up or “staked” in pooling contracts, earning the individual investor an average of 5% a year. And while that is better than what TradFi offers, it pales in comparison to the incentive structure Cardano has in place for pooling managers — a person who operates a contract that pools together Cardano coins (ADA) from individual investors, staking it for the long-term.
So who is benefiting the most by pumping the alt-coin Cardano? YouTubers!
YouTubers act as these pooling managers, and while the individual investor sees a 5% yield, these influencers are fetching returns upward of 90%. YouTubers are basically doubling their earnings at the expense of their followers.
The point is that YouTube Influencers have an asymmetry of power and are incentivized to be bad actors. Their misaligned incentives — to report positive news and pump the price — is linked to their ability to earn a honey pot of money; so long as their followers believe that Cardano will “moon” — the idea that a coin will 10x or 10,000x at some point, these influencers can quietly earn millions.
Just how much? YouTuber, Ben Cowen raked in nearly $460,000 last year in his staking pool while his followers locked up 300,000 ADA for less than 5% ROI. Likewise, Crypto Capital Venture took in nearly half a million in profits while his followers only earned 3.79% on their 450,000 ADA staked. In total, this hush-money scheme earns about $100 million a year while locking up tens of billions of dollars in staking contracts. Point? Be skeptical of YouTubers pumping alt-coins.
“Dread Pirate Roberts” Uses NFT Tech to Fund Raise for Prison Reform & Freedom
The infamous DPK or “Dread Pirate Roberts” — a reference to The Princess Bride and the allegorical alias used by Ross Ulbricht in The Silk Road — has used his notoriety in the crypto community to call attention to the “injustices of the American prison system.” Using blockchain technology, PleasrDAO collaborated with Ulbricht to create a new DAO — Decentralized Autonomous Organization — with the goal of 1.) jailbreaking Ulbricht from his two lifetime sentences 2.) use proceeds to help families of the-incarcerated to cover visitation costs and traveling expenses —which often possess as an impossible barrier for low-income victims to visit family in jail.
FreeRossDAO was able to fund raise more than 2,800 Eth from the crypto community, which was then used at auction to buy original NFT artwork created by Ulbricht.
The proceeds from the NFT sales went to a trust called Art4Giving fund. This donor-advised trust was created by the FreeRossDAO as a legal entity to fund new legal proceedings for Ulbricht. According to the Art4Giving site, these funds will also be “dedicated to relieving the suffering of the incarcerated and their families.”
The NFT above, called “Perspective,” sold for a whopping $6.2 million or 1,446 Ether. It was drawn by Ulbricht while in prison using just a graphite pencil, and is part of a collection of artworks which have been created into NFTs to be auctioned off.
In the near future, the FreeRossDAO has plans to create a ROSS governance token by fractionalizing the artwork into a currency (ERC-20 token); these coins will then be as a voting mechanism for proposals, participation and funding allocation for future projects.
The Rise of the Meme-Economy by WSJ
DISCLAIMER
THE VIEWS AND OPINIONS EXPRESSED BY THE AUTHOR ARE FOR INFORMATIONAL PURPOSES ONLY AND DO NOT CONSTITUTE FINANCIAL, INVESTMENT, OR OTHER ADVICE.