This is what I wrote on the Draft Proposal: Compounding Maturity thread. 
I am happy that the concentration of ICP has been decreasing as a result of tax-related sales. Pity we will soon revert to a state of increasing concentration thanks to Dfinity’s proposal 48623.
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Alas, the more I dig, the worse it looks. It’s bitterly disappointing as I allowed myself for the first time to have high hopes in ONE good use of crypto. Why is it that every time I do my due diligence before investing, the same emperor is standing there, still without any clothes?
I have looked without success for Dfinity’s motion to dismiss, and I remain open minded to any counter evidence and counter arguments, but on the face of it, it looks pretty clear cut. Notwithstanding my hopes to the contrary, my presumption of innocence on the part of Dfinity, my implication that the design flaws were accidental, the more I look, the more I conclude that what I feared would happened, happened at perhaps unprecedented speed and I’m late to the party, and it’s much worse than I feared.
A beautiful story, with enough funding for genuine and significant innovation, from a hundred academic papers to a thousand patents, and an inspiring vision… has already been used to swindle retailers and eye wateringly enrich insiders. This chronology from the class action lawsuit seems hard to dispute. People are aware of the Arkham investigation which Dfinity loftily dismissed without providing counter-evidence (“taking the high ground”).
But it’s not an isolated speculative datapoint. There is a whole verifiable trail of pump and dump and rug pulling, and the very system that allowed that tiny number of people to literally make billions, each, just before retailers lost at least hundreds of millions, is what makes it virtually impossible to point the finger at everyone else. Millions of coins were verifiably sold at a time when all investors except Dfinity and its team and insiders were locked out from selling by vesting rules they applied to everyone but themselves, as publicly (and presumably accidentally) admitted by Williams at least twice. Once whe he clarified Dfinity had not itself vested, and once when he attempted to blame the early sales on Dfinity ex-employees, meaning that Dfinity employees were not locked when everyone else was. Since then 5 ex-employees anonymously said on reddit that they were indeed able to sell and did sell in that period. You might want to dismiss anonymous claims, but in light of a) the undisputed transactions that did take place
b) the vesting locks and limited actual sellers,
c) the acknowledgement by none other than Williams himself (his lawyers must really suffer with their client!) that neither employees nor Definity were unable to sell
And
d) the lack of one single offering of actual evidence from Dfinity to counter tye claims above,
It seems reasonable to conclude the five redditors are telling the truth - a bit of icing on a gigantic, poisonous cake.
Can I ask, was anyone still here already in posession of the facts above? If so, what keeps you here? If not, and now you know, what keeps you here?
From conversations in other web3 spaces, the two reasons I’m presented with are:
- Semi-religious faith. So much identity has been invested in the dream, the story, the community, the stake, that the facts above are not just financial but psychological and in a sense theological. ICP (insert alternative blockchain) is there to decentralise and emancipate the internet, therefore none of the above is enough, and there is a probable explanation even if I personally don’t have one.
That is easier than saying: given the facts above are true, this dream to which I have given the best of myself, brought others into, invested not just money but time, and mental and emotional resources, is a mirage, that has milked me and will milk me and 99.9% of the community (conservatively) for as long as it exists.
- Sunk costs fallacy. I’ve put so much money, energy, time and intent into this, and lost already so much, that I might as well stay in case “it gets better” and recoups my losses.
As I said in an earlier post. I myself, right at the start, find myself resistant to look directly at the red flags and acknowledge them. Imagine if I had invested significant savings and a year of volunteer work. What rationalisations would I give myself to dismiss all the verifiable facts above? What would it really take after that investment of my money and my identity and time and maybe even relationships, for me to actually see what any sympathetic outsider without skin in the game looking in detail would consider transparently obvious?
Maybe you don’t need to imagine. Maybe that is you.
Again, if you have evidence, as opposed to pious hope or emphatic assertions, to counter the facts listed above, I will not be disappointed, but elated. There is substance to the dream. Until then, I think it may be time to wake up, and dream new, healthier, more authentic even if less grandiose dreams.
Silver lining: if the class action lawsuit is successful, you may well recoup some of your investment, and hopefully, your faith in humanity. For all their massive impact, the numbers speak for themselves: it is a tiny fraction of ICPers who are evidently bad actors. The 99.99% are mostly good people trying to improve their lives and make the world a better place. That should give us all hope, because in the end, I deeply believe that counts for more than a bit (or in the case of the seemingly corrupt top of the pyramid a HUUUGE amount) of money in the bank.
Would LOVE for the motion to dismiss to completely refute my post. If anyone has a copy, please let me know.
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I don’t believe Dfinity played fair at launch by locking in some holders and not others but, on the other hand, I don’t think anything it did was criminal.
Early participants who couldn’t cash in at the start will still make a profit, so one cannot feel too bad for them.
The problem was not that Dfinity sold too much, as your entire note suggests, but that there was too little supply early on. That is what caused the price spike, aside from the entire market being in bubble territory at the time.
Investors who bought at ridiculously high prices and later filed a class action lawsuit are idiots. Whatever happened to caveat emptor?
I am sure there is heartburn among current Dfinity staff as well, knowing that a few ex-employees made tens of millions around the launch. Speculatively, that might be why proposals like 48623 are being prioritised.
No matter how the launch was handled, I do not believe the current price of ICP would be very different from what it is at the moment. It would have opened much lower if seed round participants had been allowed to sell from the start. Maybe it would have been around 50 on the first day and then drifted down to approximately where it is now.
Had that happened, the IC would not have the reputation of being a scam that it now does among large sections of the community. I do blame Dfinity for that huge overhang. Both on grounds of fair play and to let the market settle at a reasonable level it would have been better to let all early participants access tokens easily and sell them quickly.
On the other hand, the one major plus of the way things went is that Dfinity is well funded and can comfortably ride out the crypto winter while continuing to promote developer growth. It has increased its head count while the industry is cutting jobs.
The fundamental reason the price is so low currently is that network uptake has been far slower than predicted and landmark advances have been delayed by months. Once BTC integration, SNS and a few DeFi related issues are sorted out, this will begin to change. That is why we on the forum remain optimistic. Even if everything in your post and Arkham’s report is accurate (and I doubt it is), it does not warrant a lawsuit from early buyers or pessimism about the future of ICP.
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There is plenty of blame to go around, specifically on Dfinity for the way launch was handled. Your biggest claim against the foundation is that some people were allowed to sell and some were not. Ok, so what? Was it criminal and unethical? I don’t think so. I do believe that was a mistake. Everyone should have been allowed to sell and let the market decide what the correct price of ICP should have been. Unfortunately that didn’t happen. It is what it is. I think the best viable solution now is the look at what happened and learn from the situation, not scrap the entire project.
I can only speak for myself. I am here because I like what the foundation is trying to build. It’s revolutionary in many ways and has the potential to change Crypto fron being used for speculation to real utility. I still believe that’s possible. So no, even if everything you said was correct I don’t believe that’s enough for me to abandon the project.
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Yes, I completely agree with your opinion. The important thing is that they are building good things that have practical applications and taking crypto in a new direction where it is more practical in the future.
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Leamsi, I think the biggest evidence against ICP being a rug pull is the activity of its community. It might be worth taking some time to read about the various projects and developments going on in other topics on this forum.
The idea that Dfinity is a giant scam makes no sense whatsoever to me when I see the amount of hard work, patience, and effort being put in by the people who are closest to the project. Their devotion speaks volumes. If they are still hiring, building, answering questions, and releasing new updates when ICP is sitting at $5, what exactly is their exit strategy?
If this is a rug pull, the Dfinity team clearly hasn’t gotten the memo.
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The scam claim is not only ridiculous, but it is also intellectually dishonest. Nobody has been duped. People chose to buy ICP at the bull market’s peak, despite the risk of being left holding the bag for some time. ICP is not the only legitimate blockchain that has experienced a massive drop following a hyped launch with limited token availability.
No top protocol has been without controversy, whether it’s the ETH rolling back of a smart contract, MEV, BTC blocksize wars, Solana shutdowns, or accusations of hidden supply. Nobody argues that Dfinity is blameless and could not have handled things better. In hindsight, it would have been better to let everyone sell, and the price naturally found its bottom. But hindsight is 202/20.
The Arkarm study is garbage since it ignores the cause of the crash, which was mostly futures driving the token price to unsustainable levels prior to the launch, as well as a lack of token circulation on exchanges.
It would have dumped anyhow because it made no sense for a brand new project to be in the top ten in terms of market capitalization.
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I have literally no skin in the game. This was all my due diligence, precisely because I do find many of the projects and ideas exciting and full of potential.
Because I have no skin in the game, I began with a presumption of good faith, offering my help to the project in the sustainability sphere. So this is no hatchett job on my part, and as I said, I would like nothing more than to be proven wrong. I looked for the motion to dismiss to hear the other side and find some counter evidence.
Having said that, the answers here fall into my first category. I believe because I believe. When people say (paraphrasing) “dfinity handled it wrong at launch but now it’s all OK”, and “caveat emptor” and "nothing wrong " and “price would have been the same as now in the end”, people are, I suggest, just avoiding cognitive dissonance, rather than courageously looking at the facts.
If the allegations are true (and they can be verified by anyone in the links provided in my screenshot), this was not “handled poorly”, nor was it an accident of insufficient liquidity or futures, nor was it simply “unfair” that everyone except Dfinity, its employees and insiders was locked out at peak price. The 22 accounts that sold millions of ICP made billions of dollars. Many billions. Each. To put that in perspective, if you spent $100,000 every single day, it would take you 500 years to spend just 1 of those billions.
Meanwhile, by the time the lock expired, all the other, investors, the very people who added value to the coin, on the pretty obvious understanding that no one could sell before them, lost 95% of the value of their investment. I believe it’s more than that by now.
Again, very happy to be shown evidence rather than faith that any of this is wrong. But it IS a blockchain. We know, indisputably, how much ICP was sold at the time. And we also know the vesting terms applied to literally everyone except Dfinity and whoever Dfinity sold to or transferred to at that time.
Collapse in the value of the coin, furthermore, can be clearly tracked to key disclosures of dishonesty, unfairness or misdirection. First crash after there was a massive selloff during investor lockdown. Second crash after a tweet revealed vesting terms had not been universal contrary to all previously understood claims. Third crash when a further tweet disclosed that Dfinity employees had not been locked either.
So yeah, you can argue that it was an “accident” that those early sellers somehow managed to make billions from selling millions of ICP on the down low without competition at peak hype cycle, deciding, enforcing and hiding the very rules that placed them in zero competition, 100% control. And that the 95% crash that followed successive revelations had nothing to do with the very people who revealed them. Or that the fact that everyone other than Dfinity understood, on the basis of Dfinity’s public claims, than no one was excepted from lock out vesting terms. That is a whole lot of “luck” falling one insiders’ wallets, and extraordinary bad luck chancing upon everyone who took Dfinity’s claims at face value.
Or you can conclude that a few savvy investors designed the perfect system to massively inflate then exclusively sell a crypto currency, rinsing and repeating, more rapidly and effectively, patterns seen again and again. Occam’s razor wouls suggest one of these two scenarios is more plausible.
The only counter argument offered so far with potential plausibility would be the one that says, if this was a scam, why is Dfinity still working so hard and investing so much in ICP? But looked at more closely, this is a subtler version of I believe because I believe in Dfinity’s storytelling. It would be like asking why the 7 people who control Dogecoin are still in Dogecoin after making so much money off a crypto joke. Because it’s still a money maker, as long as there are true believers buying in, even at a tiny, minuscule portion of its top price. Read Greater Fool Theory on Wikipedia.
These people have already made the billions by selling without competition at the timing of their sole choice. The fall in value doesn’t touch them. They are now beneficiaries of the ecosystem, and make money when one blockchain rises, and also when it falls. In addition, the project can still attract millions of investment, which goes directly into both the salaries, and the storytelling behind what has moved from spike bonanza to steady cash cow.
And maybe, just maybe, they’d like, as a cherry on top, to actually make a success of the vision, validate the story, and clean up their billions. Once people get billions, they often move onto thinking about legacy. Today, perhaps the majority, and certainly a significant proportion of criminal wealth is invested in the lawful economy. The success of their above board activities may financially launder, but does not ethically clean or balance out injustice.
So as I said, I think it might still make financial sense to invest now. But I’m not sure it makes ethical sense for me personally, when the people who exploited the system so successfully, are still custodians of the story, with most votes outside of governance on autofollow, and a degree of influence and opacity scarcely less than when they rigged the vesting terms to their advantage. Any look under the hood, I think, will show deep down centralisation. Those who say things have improved or are improving, I suspect are either in the top 10 percenters, or, far more likely, in the 80+ percent that STILL, I am confident, hold less that 3%, maybe less than 1% of the value. Perhaps the 1% has now shared a bit more of the pie with the top 10%. I would be astonished if the ratios for the vast, vast majority have changed.
If no one else has, or does this analysis and update, of the actual present distribution of ICP, I might if I find time.
Please, if you have any hard facts other than, Dfinity says it’s all good so it probably is now, and the vision is inspiring, and so many in the community are devoted to it, so it can’t be exploitative or designed to enrich a very few, and Dfinity is full of lovely people, they themselves say so, and things are decentralising apart from some Dfinity proposals and the node providers, and the sell off was not a bug but a feature for decentralisation, and this is the panglossian best of all possible words, then, to quote Moliere, “all that is very well, but let us cultivate our garden.” Or to quote Monty Python, “the Romans, wonderful people the Romans”.
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so maybe we should pass a “robinhood” type of proposal…take from the whales and give to the retail investors…that way your desire of having a perfectly decentralized Internet Computer will be satisfied ah?
You already stated that you have no skin in this game so I have to assume that you are a “concerned” citizen looking out for the well being of other…so my question to you is…what is your end game, are you digging deeper to convince yourself of investing on the project or to scare off other with your walls of text containing information that must in this forum already know.
There is no time machine…things were not optimally done but it seems to me that Dfinity is trying to improve them…it takes time.
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You’re reading far too much into this. I moved on from the launch and catastrophe over a year ago. I’ve gone over this story with others whose thoughts were already made up. Honestly, it’s a waste of effort to debunk every allegation someone makes. My answer to people who distrust the foundation this much is to move on to different projects they believe in.
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Yes, from a starting point of wanting to invest not just money but time on the IC (I’m a software engineer and excited by the engineering possibilities). I’m reading deeper as due diligence, You are watching live as I discover stuff around a thread began by OP, not me, warning about excessive concentration of power in node network. If you read my posting history you’ll see the journey from simple enthusiasm, to environmental questions, to design questions, to ethical questions, as I avidly seek facts in ICP’s favour.
My only distinction is that I’m not trying to convince myself, which is what I see people doing and “moving on”. I’m trying to find actual evidence my concerns are unfounded, in order to put not just skin but heart and body into ICP. But the more I look, the worse I find.
Finally I appreciate this is old news for many of you, but if it’s been debunked many times, I simply ask you point me to a factual, evidence backed thread, rather than a reaffirmation of sentiment. If the facts I pointed to, not just from the Arkham report but several sources set out in my screenshot, are easily debunked, and this is old hat, I’d be grateful if some kind soul saves me and everyone from my walls of text, and gives me a link. Am I truly the only one here that finds this not just historically but currently problematic from a standpoint of either ethics or risk (dishonest actors would affect both)?
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Just hope you could focus on the positive thing rather than the bad thing (just maybe). Time will say, follow your heart to keep building, maybe on #ICP, maybe #ETH if you don’t like #ICP.
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@Leamsi
if you keep digging deeper…you might get to more than -95% or -167% maybe -250%
You say you have done ‘due diligence’, but all you have is a report from a year ago, which you are quoting like so many have done. That is not due diligence. Due diligence would include asking why Arkham has only ever produced one report in its entire existence, why its account started tweeting when the report came out and then stopped for a year until a counter was produced. Due diligence would include reading cryptoleaks.info’s response to Arkham.
Above all, due diligence would include understanding a bit about the technology involved, about which you have written not a word. It isn’t anybody’s words which are the basis of the community’s trust in Dfinity it is the actual verifiable working technology.
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I don’t understand if you say you have checked and researched very carefully so why not try to think of a project launched at that time that was overvalued, in TOP10 but in terms of technology, they didn’t have anything? If at that time people said investing for value, then the #ICP value didn’t actually reach that level. all at that time were FOMO by the price, not the actual value of the project, including me. but I do not blame the project, do not blame others, because the decision to buy and invest is up to you. It is your own responsibility to research and evaluate to purchase and invest. Whether it is a big profit or a loss is up to you to decide. Don’t try to blame others. Look at the positive direction of the project, I see #IC actively developing to change the way of thinking and bring Blockchain into more practical applications for life. why not look at it positively that they can sell $ICP at a high price to have more reserve of resources to develop #IC in the long run, and to not need to struggle to raise more capital to survive the market bear school??? if they sold $ICP at that time but they are still working hard on the project and developing the #IC then that’s a respectable thing. Take responsibility for your own understanding and decisions. I personally still believe in #IC and believe in the future of $ICP
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Thank you everyone for your ongoing engagement, which has raised a little the level of discussion by offering more context.
First, to clarify I don’t claim to have done my due diligence. I share that I am currently doing it, and your responses are part of that. Although I have programmed a little on ether and was gifted some BTC some years ago that I have given back for environmental reasons, I own no crypto, and have no interest in getting anyone to buy or sell. My interest in IC is not financial, but ethical and technical. Apart from the seemingly universal crypto design flaws which I explored in my very first post on this thread, there are so many aspects to the IC’s conception that are exciting to me I even toured their jobs board to see if I could join Dfinity.
I am grateful for the link about Arkham. I guess I hadn’t found it because I haven’t really investigated Arkham, which sounded dodgy to me. The article does make a good hypothetical case, even if without actual evidence, that Arkham is probably not an honest actor either. Also interesting to learn about ICP Perp. Definitely looks dodgy. Having said that, when you take out the speculation from the article and just look at the actual facts it gives, all it really shows is that the price inflation and speculation was even more complex, and (possibly) more than one dodgy stakeholder benefited from it.
But my own concerns were not based on Arkham, which I have seen cited but haven’t even read. Rather I was going off ic.rocks, which tracked ICP transactions and as far as I can see it’s a good faith effort by a forme Dfinity engineer, Norton Wang, who still writes positively about Dfinity, so has no axe to grind. More crucially, sentiment aside, the code for ic.rocks is open sourced in github, so I could see what was going on beneath the hood. It looks like it’s no longer maintained, but when it was it did confirm the sale of millions of ICP tokens at a time no one but Dfinity and insiders had the ability to sell. So maybe Arkham was a rival and benefited from exposing the dump, but the dump did happen.
More convincing and coherent is the post (now deleted?) that said “It’s a fact the Dfinity engineered one of the biggest and fastest pump and dumps in crypto history to my knowledge and they or people affiliated with them made billions. That doesn’t mean that Dfinity isn’t the most promising tech in crypto since Ethereum.” In this argument it still makes financial and maybe even ethical sense to invest and work with ICP, acknowledging the fraudulent start, but recognising it doesn’t change its technical protential or potential profitability.
Here I agree, and my ethical and strategic dilemma is whether I can approach it in the same way, or whether the dodginess not only at the start (past history) but at the top (same people) is a dealbreaker. Still mulling it over. Was really hoping the community would have links or answers that showed my concerns had been fully and factually refuted. Alas, it seems they have not in all this time.
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You’re really good at saying very little with a lot of words
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How do you know what facts are in the Arkham report if you haven’t read it
Could it be that you use the same methodology that took you to the conclusion that the decline of the ICP value is … -167.41% and not -95% ??
I made a mistake, i corrected it within minutes. It’s -98% now. Happy to correct everything else too. As I said, I much rather be proved wrong than right. As to knowing what the Arkham report said, it’s been widely cited, including in the screenshot I provided. But given the ic.rocks data and the fact I had seen Arkham discredited in the community, I didn’t feel like relying on it or digging deeper. This is not a gotcha piece. I’m genuinely open minded. All I ask for is facts to retract absolutely anything I’ve written. That would make me happy. Then I’d be able not just to contribute but to defend Dfinity and ICP before anyone with the same, I think legitimate, questions.
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In this world there is no complete truth, nor complete lie. It’s just your belief how much you believe it, and how you consider it to be true. let go of the past to look to the present and a better future, instead of trying to figure out what you think was a lie in the past, you should take that time to look at the present and evaluate What is DFINITY doing and how is the future of ICs. If you rate it as good then you can contribute and contribute to build the IC to become stronger and better. rather than dig up the past, maybe for some reason the tokenomic was not good, maybe any other reason. But the past is the past, it doesn’t make the future better. should only evaluate the current they are actually doing, and do you want to help build the future on ICs?? Simply answer this question in your heart. I think that’s enough.
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