Most Honest Ponzi Scheme Shuts Down Right After Launch
A crypto project clearly described as a scam was closed almost immediately after its launch as the developer got shocked by human stupidity.
Among the several new tokens launched last week, one of note is PonziCoin – probably the most honest, transparent, and straightforward cryptocurrency project ever. Its homepage directly states that the whole thing is a joke, with an answer in the FAQ section clearly indicating that the project is a scam. However, this did not stop crypto investors from buying the token, so developer Rishab Hegde felt the need to shut it down.
PonziCoin is an ERC20 token based on Ethereum, meaning that investors could buy it with their Ether coins. The official site said that investors could make money with the PonziCoin tokens, but they could cash out at ¼ of the current rate. This suggests that to make a profit, one had to wait until the price at least trebled from the moment of investment.
As stipulated in the smart contract conditions, the price is directly driven by the trading volume, so every time 100 tokens are sold, it automatically doubles.
Thus, a PonziCoin investor looking for profits would buy a token, wait for its price to at least triple based on the fact that 300 new tokens are sold in the system, and withdraw 25% of the final price.
But the FAQ section says it all. In answer to the question “This seems to be too good to be true, how am I getting screwed?” the developer wrote:
“It's a literal pyramid scheme. You are fairly likely to be one of the last people to buy PonziCoins, so another 100 tokens probably will not be sold and the price may not ever double again, in which case you could lose up to 75% of your investment. There's also a chance the contract runs out of money or gets hacked in which case you could lose all of your investment.”
The whitepaper summary is even funnier:
Despite everything, in just eight hours the platform collected about 250 Ether, which are worth around $250,000. The San Francisco-based developer apparently got shaken by human stupidity and pulled the plug on the token sale.
Now the “buy PonziCoin” button is unclickable, and the site says:
“This has gotten crazy out of hand, I apologize, but we will no longer be selling PonziCoin on this site because this was a joke. I cannot terminate the contract but I will not be selling any coins that I own. For clarification, I did NOT profit from this: the contract got depleted by other people selling their coins, I did not "take off with the money" and I never sold my coins, you can easily verify this on Etherscan.”
Interestingly, there was another PonziCoin created in 2014, but Hegde’s project has no relation to it.
Earlier, the crypto community found that BitConnect was a pyramid scheme, so its price crashed from a peak at $452 to the current level at about $9.