Few Understand This Shows DeFi is Loosig its Footing

Few Understand This Shows DeFi is Loosig its Footing

September 23, 2020 Decentralized Finance DeFi 0


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Few Understand This Shows DeFi is Loosig its Footing

A leaked Telegram chat has the DeFi community decrying that some of the space’s most well-known influencers were orchestrating a pump and dump scheme around a token called $FEW, an accusation the crypto personalities involved deny.

The question is whether the group was created with the specific purpose of leveraging the members’ follower base to push the price of a token they would later sell. The answer is probably not the same for everyone. There were more than 500 people in the chat at some point, and it’s unlikely that all of them had the same intentions.

This latest drama highlights that speculation surrounding self-proclaimed DeFi projects is reaching a frenzy. A dollar sign placed in front of certain words —specifically those related to memes or food items— spouted out on Twitter in some cryptical haiku-like message peppered with fire and rocket emojis, will create an irresistible urge to buy that token, regardless of what or who is behind it.

Next Big Thing

How did we get here? Because of the success of this new DeFi wave of meme-based, community-owned and led, hacked overnight, unaudited projects. After seeing coins like YFI, YAM and MEME soar, everyone wants in on the next big thing.

This wouldn’t be an issue if those so eager to get rich off a DeFi experiment actually had the intention of producing something of value. The problem is when the only goal behind a token is for those who issued and own it, to shill it on Twitter and quickly sell it to others for a quick profit.

It’s unclear whether that was the intention of those involved in $FEW, but leaked chats have some in the DeFi and the Ethereum community speculating that to at least part of the group, it may have been.

Reverse Engineer MEME

So what actually happened: Yesterday someone started a Telegram group dubbed “The Experiment” and invited well-known crypto personalities. That someone might be a Telegram user who goes by the name of “Sam Mr.Boson,” as he appears to be the admin in leaked chat logs.

According to those screenshots, he created the group with the intention to “reverse engineer MEME,” which means: get a bunch of people in a Telegram group, airdrop a token, list it on Uniswap, ride the hype around that token to create an actual project around it, and hopefully see said token rally so everyone who held on to the airdrop has half a million dollars on paper a few weeks later.

Token Airdrop

Mr.Boson said the plan was to airdrop a token to the first 50 in the group. About an hour later, the 50-people target is reached and now conversation starts shifting to jokes about the “few understand” meme, some talk about what the project will actually do, while others are still trying to figure out what actually is going on.

The group grows to more than 500 people in less than four hours, according to Taylor Monahan’s play-by-play. By this time, many were asking about the token airdrop and sending their ETH addresses, while putting pressure for the token to be listed on Uniswap.

Promoting FEW

42k FEW tokens were created after that, and 40k were distributed among 52 addresses, with 769 going to each address, and 2k remaining, according to Etherscan.

Meanwhile, recognized and respected names like Alex Masmej and Anthony Sassano appeared to have been promoting the token on their Twitter feeds, while others like DeFi Dude said he was ready to start shilling the token in the chat. They have all since apologized for their statements, said it was all a joke and meant as fun, not as an effort to cash in.




Contributor: Farmwell

  • A glimpse into the SNX OTC market. Over-the-counter markets tend to be opaque and marked by information that can be difficult or costly to obtain. This makes OTC markets a really interesting topic in the context of DeFi and Ethereum, where market participants transact on a publicly verified ledger. Specifically, participants use technologies such as Airswap and Deversifi’s trustless smart contracts to execute OTC deals between parties who otherwise don’t know each other.

    The OTC market for SNX is an important place for larger players to get bids filled without incurring much slippage. Approximately 79.72% of SNX are locked as collateral for minting synths like sUSD. This leaves a small percentage of the supply available for accumulation. Just 3.8% of all SNX are available on Binance, Uniswap, Kucoin, and Poloniex.

  • Since March 2020, SNX OTC deal volume through Airswap totaled $21,064,281.12. During the last six months approximately 4,520,232 SNX have been swapped, or 3.78% of the circulating SNX supply and 2.24% of the total supply. A typical SNX OTC deal size is 122,168 SNX, giving an average deal value of $569,304.90.

Image 2020-09-18 at 10.05.40 AM

  • As far as tempo, July was the busiest month for SNX OTC brokers as 11 trades were conducted in that month. But the average deal size was also just the fourth-highest of the six months examined in July. Meanwhile, in July and August combined SNX buyers went through OTC brokers 17 times, while buyers went through OTC brokers 20 times from March through June.

  • Binance’s SNX listing in July is likely to weigh negatively on future OTC activity for SNX. Binance has a wide distribution to users across the ecosystem and amassed more than 5 million SNX in its wallets, making Binance the largest SNX holder among centralized and decentralized exchanges. Deals worth more than $1 million will likely continue to be done via high-touch OTC brokers, SNX OTC broker Nocturnalsheet tells Our Network.

    A major kudos goes out to Kaleb Keny, a.k.a. KALEB on Discord, and Alex Svanevik of Nansen.ai for assisting with the data for this write-up.