A well known occurrence in the blockchain especially as it deals with the rave of the moment of any new event tends to be taken advantage of by some interesting section of the industry, who instead of putting together their skills for better development of the ecosystem will instead opt to device schemes and scammy activities in a bid to lure unsuspecting members of the community to steal from them. It’s a strange situation the blockchain community have constantly found themselves in, engaging in nefarious activities when one can utilize the same platform in profitable ways. However these events are not exclusive to the blockchain.
As blockchain continuously finds relevance with the traditional world, it behooves members of the community to ensure that the true spirit of openness, fairness, trustless nature of the blockchain is upheld at all times. The Twitter hack of July 2020 masterminded by a Florida teenager, where high profile verified members of the Twitter community were targeted and hacked brought Bitcoin and the whole cryptocurrency sector to a major negative spotlight.
By requesting Bitcoin fraudulently using this hacked big profile resurrected once again major issues faced by Bitcoin in its early days which have also continued to hurt its growth. Beyond the tech community, Bitcoin and cryptocurrencies have continued to find relevance among the average Joe in the street and any chance of them getting ripped off their money sends the wrong signal across.
Polkastarter attempts to be one of the first DEX protocol and fundraising platforms built off the polkadot protocol to take seriously the incidents of scams perpetrated on the blockchain and now on the decentralized finance networks.
Because of the ease of listing on existing protocols like Uniswap, Primal Network and Bounce with almost no verification of the team, fraudsters are starting to take advantage of this obviously lacking checks and compliance systems. The incidences are starting to trickle in too. In a series of recurring events, scams carried out by DeFi projects exist today but are not restricted to the following:
Anonymous Sushi founder, a fork of uniswap was alleged to exit scam with $14 million of investors funds after the token went up as high as $10 in just 24hrs of trading, news of him returning the money much later wouldn’t affect the token price positively since the damage is already done.
Yam protocol the DeFi high yield farm faced an heavy price crash in a desperate bid to “fix a bug in the code” from roughly $167 per token to $14 and subsequently $4 in less than 24hrs. And the list of scam done on DeFi space in a short time is gaining numbers. While investors suffer heavy losses.
Despite its permissionless abilities and its decentralized nature Polkastarter have activated the antiscam feature which ensures that only projects with true intention to build to last are listed. Anonymity of decentralized network is always taken advantage of by these bad actors resulting in an increase number of projects with exit scams. This situation is well observed in Uniswap, where scammy projects could pull out liquidity anytime, allowing the price of the listed tokens to crash to near nothingness and the investors gnash their teeth in regret and loss in a never ending circle of pain.
Full KYC integration on the Polkastarter protocol will mitigate this occurrence since the identity of the team behind listed projects are known, there will be little chance for scammy ventures and activities. In fact, I’d trust that the bulk of the projects that eventually utilize the platform for trading, fundraising, OTC and auctions are properly verified and investors’ funds are secured in the network.
Because of the ease of operation and the huge difference in existing solutions, it’s expected that projects are going to discover Polkastarter in no time.
Polkadot is hot and everyone wants to get in. Sharding isn’t an entirely new subject in cryptocurrency, although some blockchain claim to have implemented sharding features but findings reveal otherwise. In polkadot, projects can swap from one blockchain to another with ease. Polkastarter is built on Polkadot networks and affords projects listed the unique advantage of swapping across different blockchains seamlessly.
This is the upside to the permissionless and decentralized exchange platform, with antiscam features, users are protected at all times from actors who may want to take advantage of the simplicity of the blockchain protocol. Any attempt to protect users in the blockchain is a welcome one. Protocols making the right effort to implement such a safe net strategy in their structure shows they care for their users.