THE ROBOT IS GOING TO LOSE
How Bad Actors in Defi Make Good Ones.
Author: Louis Bell editor: Josh Anonymous
“On day one of the launch of GXY — I remember the auction being like 19 million TRX (editor note; approx .02 cents per TRX) . It may have been higher day two… like crazy high.
I found the site because I saw on YouTube that people were crushing it with DSP, and T2X — GXY was a new version that was just starting…get in, it will run like these other platforms and you’ll love it.”
I had met Yo on Telegram. I was new to all of this. The group on Telegram that I met him through was called Inspired Finance, and Venturi was a new project that was being hyped up by the admin.
Venturi — A unique platform with unique game theory. At least that was how The Eternal Cryptoptimist — a man involved in GXY from day one, and also the admin of Inspired Finance — described it in a sentence. This was the new project.
Yo was invited over and dropped in to tell us a bit about Venturi and I ended up talking with him. He told me he had an article he wanted written and one thing led to another — we got talking about Venturi a bit, but there was also this massive fiasco of a Tron project called GXY that had scammed tons of what he hoped would be future users of Venturi, and he wanted that story fleshed out into what became this article. To clear the air maybe, and restore some trust.
One thing that stood out to me about Yo was his genuine demeanor. He seemed to really care deeply about those involved in projects he had a stake in, he clearly had beef with those who had left thousands of people ripped off.
According to Eternal- the GXY auction on Day 2 was indeed higher than 6 million Tron. At final count the number he estimated GXYMike to have run off with was in excess of 700k USD.
Make Something of Nothing
It was clear to me that Yo wanted this GYX mess all out in the open and explained before the launch of Venturi. Here I was talking to a bunch of well meaning and obviously successful people who were launching a project with a completely philanthropic look and feel to everything they were doing. There was a sour taste left in everyone’s mouth to remove. And a part of making that happen was dropping the veil on the GXY fiasco — and pointing the finger at the man behind the crime — GXYMike.
This GXYMike character had ripped everyone off. Hard. The drama unfolded as such in Eternal’s words.
“GXYMike cloned a platform and website and didn’t even put in the effort to change the website. It was apparent he wasn’t in it for the investors when he pulled about 20 million TRX out of the contract and staked billions of GXY so no one else could get profit. A few of us were trying to bring the platform back and even started a new Telegram and Twitter. After a few weeks we figured out what he did with the stakes and that is how Venturi became an idea.”
I collected snippets from talking to Eternal. But my main point of entry into this story was through Yo — who was eager to get the full story out into the open. As I interviewed more and more people and gathered a variety of perspectives, I let him continue as I wrapped my head around it all.
“Around day three GXYMike started saying he could not stake his day one and two coins because he lost his password which was on his phone because he was partying with hookers and doing blow and the cops arrested him and confiscated his phone.”
There was no sympathy in his words — slander this bastard in the article — go ahead. That was the tone.
All of this was public in the GXY chat around October of 2020- and according to Yo it caused a mass freakout. That was when he befriended Eternal. What followed was the developer then just disappeared — seemingly without a trace- and those who had bought in freaked out even more.
“That was when I made a backup of the site to help all of these foreign people get access to their crypto because most couldn’t interact with the solidity contract on the tron network directly.”
He continued in more depth — explaining his efforts to help these people out — and wanting some kind of happy ending to emerge from the wreckage that was unfolding.
“I found a more tech savvy guy in the group. “Nomad”- and he had money in it too and we all started working together to figure out how to salvage our play on the platform.
“After Day 10 it became apparent that we were on our own. I got in touch with a guy that GXYMike hired to do the website UI from searching Github- and he gave us access to the Github and we redirected users to that so they could claim their stakes.”
“We started a little roundtable discussion because this dev GXY Mike was trying to shut down the official Telegram group too. We started a competing Telegram group and invited users over. In the roundtable we were trying to find ways to make this token work for people… So many people went in on days one through five it was crazy. To cut a long story short- GXY Mike bolted on day 10 with about 700 000 US Dollars in crypto. He left the rest of us with nothing.”
Such was the story.
A massive scam by a massive asshole. Not the first of its kind and not likely to be the last.
Then again, what did I know about all the technical stuff behind this?
The short answer is not much except what I’d learnt from these guys and one or two friends who were involved in Tron projects. I was a bitcoin guy. I’d started my crypto journey by just buying a bit of Bitcoin — and spending it on crypto advertising, getting some referrals on faucets. Then I moved on to find a new outlet after the December bull killed off months of my hard work. Although I held no specific grudges, I too had been screwed over and scammed; operating my own projects at a profit starting in March 2020- and the profits just kept coming in until I reinvested hard into sites that changed payouts with sorry excuses that didn’t fit the math.
October was my last decent month of dealing with BTC. November I recovered a little only because I held back on spending — but December killed everything. So I moved on — but getting into something new like this I went in slow. This article was a perfect opportunity for me. Not only would I get to do what I loved and hadn’t done in a while for a good freelance pay — but I could learn all kinds of things from the veterans I was interviewing — and how to spot and dodge a scam is a valuable tool in the crypto-sphere.
That’s when I found someone who could provide a more technical perspective on the story.
Yo was the passionate, enthusiastic and heart on his sleeve empathetic type. The Eternal Cryptoptimist was a bit more reserved, our conversations had less sidetrack, yet he was equally full of empathy for the victims. Both of them had boundless valuable input.
Then I got in touch with Nomadic Investor — Nomad as Yo and Eternal had called him in shorthand — and I got something else entirely. A layman’s explanation. Factual and focussed.
I asked him to talk a bit about both projects — Venturi and the GXY scam. GXY was first on the list it seemed.
“In one regard, it’s the devs rights in a platform coded like GXY was to get the first 2 days of dividends to recoup their expenses and make some profit. But, there were some issues in the code that allowed for certain areas to be exploited. Whether that was known to Mike or not, I have no idea. But, by leaving his (GXYMike’s) first few days staked longer than he should have, then removing them all from the platform on the 10th day, it did two things. First, he continued getting the lion’s share of the dividends that should have gone to community members and secondly it completely rekt the share rate, making it impossible for anyone to ever recover.”
So did GXYMike know what he was going to do? Nomadic Investor had after all said that he wasn’t sure if the loopholes were known to GXYMike. I decided to dig a bit and see what the others had to say.
Regardless of his intent when launching GXY, he had ripped people off once the opportunity was there.
As Nomadic Investor put it:
“After Mike left his initial days open, I’m not sure and haven’t heard from a single person that was able to ROI. I know the ones I’ve talked to never came close.”
Eternal was pretty sure that Mike had planned it from before day one.
“Yeah, you asked what I believe though… and to me it definitely seemed like it was premeditated. He purposely minted billions of tokens… I believe he even staked them on day 0. He definitely had a plan in my opinion.”
Yo as well was sure it had been planned from the get go — “just like a business”.
So what was to come from all of this? From what I’ve seen and gathered — a team of philanthropic cryptocurrency veterans came together and tried their best to clean up the mess. At the forefront of this was Yo — Nomadic Investor — and Eternal. They created (along with the help of several other contributors) a “roundtable” discussion group. That led to the genesis of Venturi.
Nomadic investor broke it down as such;
“The roundtable knew what happened wasn’t fair and should have never happened. The users needed more than GXY fixed. They needed a platform they could trust would not rug pull or exit scam them. And they deserved a solid platform where the tokenomics were sustainable. We could have simply thrown another clone out in days and moved on, but there were numerous other clones popping up at the same time. And doing that wouldn’t help any previous GXY users. So, the roundtable went back and forth about how we could proceed. I was adamant I didn’t want that to be a clone of GXY because of the underlying code issues. So, we came up with a list of ‘must haves’ for what we needed to do and I began coding what was to become Venturi.”
So in a sense — Venturi is an apology to the victims of GXY. But much more than that — it’s a labour of love created by a few people who share ideals.
Venturi — due to it being founded by a team involved in GXY first as participants and later as teammates battling to mitigate damage — will certainly have to work hard to remove the GXY shadow. But GXY was just a copy of a copy. And it was far from the only scam to have occurred with DeFi and Tron projects. It is but one of many. C3PR is a big name in the world of rug-pulls.
The developers knew of a flaw and purposefully chose to exploit it once there was enough to steal in their eyes. They cut the cord at 11 million dollars. A Solidity Finance spokesperson explains that C3PR developers were aware of their centralized control of the project, which gave them the power to update the “audited and safe strategy pools.” Fancy words that mean they knew exactly what they were doing when they stole millions.
That’s just one example. If you dig around for information on crypto scams and rug pulls the list is endless.
But will Venturi have these? What “must haves” did this new project bring to the table of trust? The project has yet to launch. Understandably, the team can’t spill all the beans yet, but they don’t shy away from a difficult line of questioning.
So what are these must haves that Nomadic Investor spoke of? I was given a sneak peak of Venturi’s Lite-paper preface. To be honest I had no idea what a Lite-paper even was. I’d read countless White-papers though, and I was far from unable to put two and two together. I was an outsider to all of this on the face of it. Yo had hired me to write an article and given me a lot of liberty. That was a relief from past jobs I’d had where I had no real journalistic freedom at all.
Indeed the freedom allowed me to interview multiple key players — and Nomadic Investor was a veritable wealth of objective technical information. I got permission from him to post the preface in full. Even to share it during interviews. Here it is word for word:
“I was brought in by a small group of GXY Moderators who shared a desire to come up with a solution that could make GXY a viable platform. In the end we felt there was no way to do that. The contract cannot be changed and GXY had no value by being withheld from JustSwap. Using GXY on a new platform would just dilute the new platform’s value. Swapping GXY was a losing proposition as well. At some point, someone was going to have to assign it a value by supplying TRX and then losing that TRX along with GXY’s value. All the while, the original developer would still be collecting the percentages off the top.
So, we came up with a list of “must haves” to move forward.
It had to benefit the GXY users first
It had to benefit everyone else as well
It had to cut out the original developer
It had to be sustainable
It had to launch with a promise of having value and trade-ability
It had to correct the issues plaguing the share rates
It had to mitigate suicide staking
It had to be fairly launched where no single entity could rug pull
It had to offer something no other platform offered”
— — — —
An Outside Perspective
“Denmark is very expensive when it comes to taxes — that’s why I love crypto.”
D!ngo was another member of Inspired Finance. From the few interactions I’d seen him have with both admins and users there, I quickly gathered that he had a lot more crypto invested in staking platforms and Tron projects than most around. I needed to get some outsider perspective to get a feel for what the average user thought of the hype around Venturi.
Obviously that was something I couldn’t get from the three main guys behind the new platform even if they had evidence to back up every claim and didn’t shy away from any questions. Whilst I could insert my own outsider view, D!ngo was a large investor in several projects. Was GXY one of them?
“No. I have [a significant amount of] TRX staked in T2X. I’m only invested in stable platforms. GXY was already on the way down before I considered buying in. Many TRX platforms make me think of crocodiles hiding in shallow water.”
I asked him if he was considering going in on Venturi.
“It’s the same people again and again — making these platforms.”
I was surprised at his answer, as originally we made contact when I asked if anyone in the group wanted to help me out with some promotional work for Venturi. I told him I trusted the people behind Venturi, they’d convinced me of their good intentions without any gaps in their stories by showing all the evidence I needed to form my own opinion.
“I trust the contract — then the people behind it.”
He responded laughingly.
I shared the Lite-paper preface with him, wondering what kind of reaction it would draw out.
It sounded promising to him apparently. Especially when I pointed out that at least the people behind Venturi weren’t hiding their identities. Sure, they went by Pseudonyms, but these people had a public presence and showed their faces from time to time. Nomadic Investor a bit less so than the others, but that was understandable given that the other two were promoting the project whilst he was the technical expert — the man coding it.
Responding to me pointing out that no one was hiding this time — he did agree that not only was that fact good — it was downright needed.
“It sounds like the perfect platform. We’ll see how good it is.”
One thing clear — Tron projects can’t function without a benevolent dictator. GXYMike had been the opposite, showing malevolence and criminal selfishness. That alone was why GXY lost many people huge amounts of money. One man with no control over his greed exploited a loophole in the contract and stole from people. That by itself destroyed a lot of trust that was simply necessary for such a community to thrive as a group.
Venturi will be different.
As Yo put it during one of our back and forth’s -
“Trust is what smart contracts can provide when implemented to provide it. Even Bitcoin has smart contracts now. And Bitcoin is a philosophy. That philosophy in practice has obvious value — a distributed public facing ledger. Imagine if all cash payments were to be recorded on a public facing ledger? Every single transaction…would that not lead to justice if society were inclined to seek it? They say crypto is bad because it’s “dark money” used to transact business. What “they” are really saying is “We have dark money that we do not wish to be made public”.
Indeed trust and trust building seems to be the inherent philosophy of how Venturi will succeed.
Everything about Venturi had been a team effort from the start. Jubimax was a designer early on for Venturi. I spoke with him about his experience. Like the others behind Venturi he had money in GXY too.
“I see myself as someone that got scammed and in anger I pitched in on efforts to gather what I saw as the most sincere people of the GXY community to see what we could do to salvage our investment. That was Yo and Nomadic.”
Every leaf I turned during my research revealed that Venturi was the brainchild of several working as a unit. All with a common frustration and cause. The cause was the restoration of trust in the GXY community. And Venturi was the activism. The solution.
“I identify as a Designer. Yo, Nomadic and I are all makers. So we think like makers, not like hustlers.”
Thinking perhaps idealistically, I went back to Nomadic Investor and pressed him a bit more on how the contract behind Venturi would work. Knowing only what had been in a sense fed to me I decided to ask some questions that would provide some more open ended explanations on how these types of platforms even work.
Was it possible to remove the hierarchical structure, and in doing so decentralise the platform to a purist level? Could it function with such ideals? Had GXY been able to scam users because of a flaw in the design? Yes. That one I knew the answer to. But less clear was the rest. Could a platform be built that was by design unable to scam users? Or was the well meaning hand of the developer a necessity?
Nomadic Investor broke it down in detail. Reservedly. Understandable given that Venturi has yet to launch. Would he be in control to the extent of being in the same position that GXYMike had been?
“This is both an easy one and tough one to answer so let’s try it both ways. Yes I will be.”
He laughed at the short answer.
“The harder to answer version is this. You are kind of correct with the platform being “hierarchical”. In the sense that whoever launches the contract, depending on how it is designed in terms of tokens to mint (how many to create at the onset for the dev) and thus, how they are used. It was GXYMike’s ‘right’ to stake those day 1 tokens, but it was also his responsibility to claim them on time and then provide liquidity to JustSwap using them. Neither of those second things occurred.
The first caused the death of the share rate; the second not giving people an outlet to set a fair market value. Beyond these initial steps, the rest is not controlled by anything beyond users interacting with the contract. Our entire system is different in a multitude of ways. Not just to fix the issues caused by the dev, but to also fix inherent contract problems and much more that I can’t really speak to yet.
Is there a way for an adept individual to prove I couldn’t rug pull, not at this time. But it is on the radar. I know I will use the funds and the tokens to provide liquidity to set a fair market value for the tokens after launch.
And I’ve looked into options to do this programmatically. So far, I have not found a viable solution. I would love to have the contract handle it, but there are a couple of sticking points I’ve hit. Without trying to get too technical, the function that runs when the contract is deployed only runs one time. Right at the time it launches. I can’t provide liquidity at that time, even with my own funds, because the community has not set a price for them yet through the platform. Making the contract “changeable” opens it up to users seeing that as an opportunity for me to do more harm in the future and doesn’t build trust. Also- using more complex functions- such as a time locked wallet address- opens up issues if the transfer fails and loses everyone’s funds leaving them stuck there forever.
So, if I can come up with a way that’s safe, fair, and concretely proven it will work, I will definitely remove myself from that position. At the time, however, I simply cannot do that with a clear conscience of knowing it won’t do more damage.”
So it seems that at this point we all have to live with the aspect of trust. We need the “benevolent dictator” in order for things to function as they should. So why should we trust Venturi?
“Proving that we are trustworthy? So far it’s just been built on the character we have shown. We’ve done what we have (rebuilding GXY for users to interact) on our own time with our own funds. And we have driven the narrative of Venturi with this same concept. To provide a better option for everyone while trying to help GXY sufferers recoup losses even faster.”
Indeed that is something that the Venturi team has done on a mass scale. Show philanthropy. And that is not something that can be said for all who build such platforms. As far as pitching itself as “The platform you can trust” — it would be massively unfair and ignorant to disregard the actions of the Venturi team concerning the way in which they selflessly helped GXY victims recover losses on their own dime.
Time will tell what the community thinks — but if I myself had to place a bet on the outcome I would bet that the outcome of Venturi — whether it is a success or not — will depend on the community themselves well after any possibility of scamming has lapsed.
Through the records I examined in order to understand the story of GXY and the up and coming platform that will be Venturi- I certainly can testify that the team has poured a lot of blood- sweat- tears and love into rebuilding and earning the community’s trust.
Whether you’re a skeptic, a trusting type, or just a cryptocurrency enthusiast getting some popcorn ready to watch from the sidelines, if you’re not excited or curious about what Venturi will bring to the table — then you’re not paying attention.
