How to Identify a Token Project that Deserves None of Your Ether: With Example

Note: Old article being moved over because I hate Medium

Today I want to take a look at a token project that I stumbled across today. It is called Slidebits. It is an ERC20 that is currently (in theory) accepting “donations” of Ether in exchange for tokens. That is not a joke, they are literally called donations. I’m sure the SEC will be okay with that… If you get exit scammed by a token project telling you your money was a donation you deserve it.

Second red flag? THERE IS NO WHITEPAPER! I never would consider investing a penny in any project without a whitepaper, and this project couldn’t even go the Tron route and hack together a plagiarized one. There is literally zero whitepaper. No way to analyze it, or judge it. Never give any money to a project that will not even describe how it works.

Next red flag? The token creator can freely mint more tokens at any point they want. Here is the code that allows it:

it(‘should have a mint function’, async function() { const txResult = await token.mintToken(tokenBuyer, 100, { from: tokenCreator });

This is also admitted on the website:

Gotta love when people are upfront about their ability to print more at a moment’s notice.

Also there is evidence of sloppy OPSEC. For example it appears the crowdsale wallet was funded by the creators personal wallet because when we click to the funding address through Etherscan we find that they are a big fan of Cryptokitties.

You also need to worry about projects that have been going for several months and seem to have raised no funds. Now the amount a project raises is not a perfect symbol of the quality of a project, but if they have failed to raise even a fraction of an Ether so far it is quite likely that there is something amiss.

Finally, well there is an obvious appeal to crypto tokens that work with an app on something like Apple’s App Store please remember that this is a centralized point of failure. It lacks the essential censorship resistance that crypto was supposed to have been built on.

Oh and look at that, that is exactly what happened, and look at the reasons for that rejection, there is no reason they won’t pull it tomorrow. (In case it gets taken down: http://archive.li/qvdZZ)

I could continue, but I think it is clear to see some of the signs that should ensure you immediately avoid giving up your money. Oh and if you cannot answer in one second the advantage of it being a crypto-token instead of fiat, it’s probably a scam.

Update 9/5/19: turns out I was right and it does not need a token. Whoops Archived whoops

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Toothbrush

John was shaking.  It all came down to this interview, he had been dreaming of this job since graduation and he wanted to make sure that he was totally ready.  Walking into the bathroom he grabbed his toothbrush, placed a small strip of toothpaste on it, put in his mouth, went to turn it on, and it did one quick buzz in his hand and then stopped.  Pulling it out he looked at the small display where the scrolling words said:

“Firmware must be updated, please check attached phone.”

Pulling out his cell phone, John opened up the app and saw the notification that his toothbrush needed an update.  He clicked the button to trigger the update and sat down on the toilet to do his morning business while it loaded.  A couple minutes later he opened the app and saw an error message saying that download had failed, he quickly clicked the button to download it again and waited increasingly impatiently for the update to download and install.

Again the update failed.  John reboot his phone, and force-rebooted the toothbrush in an attempt to correct whatever was the problem that was preventing him from brushing his teeth.

Again the update failed.  John jogged out to his living room, unplugged his router for 30 seconds, plugged it back in, and waited a couple minutes for it to turn back on and re-connect.  He tried the update one more time.

Again the update failed.  John grabbed the toothbrush and brushed his teeth manually before running out the door.

 

Inspirational Link: https://twitter.com/AndrewCrow/status/1074565600083492864?s=20

 

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