ICProposal Rug Pull and idea about how to prevent similar scams from happening in IC ecosystem

General DFINITY
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Dear IC Community Members,

I’m an 8 year gang and believed in the future of ICP. In the recent ICproposal DAO scam, I was rugged 525 ICP. The total ICP stolen was 7659 and 599 unique wallet addresses were involved (data from @bob Bodily twitter).

I firstly heard this project - the scam from a Chinese youtuber ( twitter @lalala84202198, now disappeared with youtube account together ) in early Feb. The idea of the project (scam) was to use DAO which consists of Governance DAO NFT holders as a sizeable NNS to propose/vote on Governance issue of IC. It has the website, discord, twitter and roadmap which looks reasonable and convincing. Like all the other scams, it appeared as a promising start-up project until the day of rug-pull. The step-by-step community construction and information distribution is well plotted and executed. It involved Gigaversemarket by ICPunks team and Wenzel Bartlett to increase the credibility.

The scam hurts a lot of people not only by stealing their ICP tokens but also projecting the harmful influence to those actively participating the IC ecosystem and NFT market on IC. Hundreds of people are painfully discussing how to find the scammer and trying to get the justice.

As a victim of this scam, I look back the whole scam event and try to learn the lessons for the future. I had a rough idea and a few questions would like to be discussed here and hope to get the reply from you.

The idea:
Can all of the scam victims set up a DAO - which 1) help to verify the authentication of start-up project on IC ecosystem 2) Realise the idea of a governance DAO to truely further decentralise the governance of IC by giving a minor stake holder a chance to voice

My questions:

  1. How to verify the start-up project ? Any third party due diligence or self-regulated proof of due diligence can be obtained for verification?
  2. How to mint the free NFT to all those victims - actually the investors of IC ecosystem and make the healthy business model to sustain the DAO operation?
  3. Anyone who will be interesting in this idea and contribute your expertise as coding or developing the NFT?

I’m looking forward to your kind reply and let’s make further discussion.

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The whole point of crypto is to replace the centralized middleman with a decentralized validation protocol. Trusting a single person with your funds goes against this completely.

When I see any of these fishy IC projects (like ICNaming) that want my PrincipalID or for me to add them to my Internet Identity, my BS meter goes off and immediately ask trusted members of the community, which generally means the forums. I generally trust most things DFINITY employees say, and have respect for several members of the community like @Gabriel @quint @skilesare @lastmjs, or former employees like @paulyoung @nomeata @kritzcreek because of the work and time they’ve put in, but I still look for multiple sources and do my own research before making a financial decision in the crypto space, as there are no repercussions for the criminal after they make off with your money or identity. There’s a reason why the ICDevs neuron hasn’t been okayed as a named follower in the NNS UI - enough voting power doesn’t trust ICDevs yet, it’s as simple as that. I’m sure the more bounties and value that get delivered to the IC by ICDevs, the more trust they’ll gain and their proposal to be a named follower will pass the majority threshold.

This specific ICProposal DAO that got hacked hadn’t put anything of value into the community to foster the necessary trust. It had an idea that sounded good on paper, tricked a few somewhat prominent individuals from the community into getting involved, and charismatically brought along the rest in a short amount of time. The project never received the “necessary FUD” and criticism needed to build trust.

In Crypto, the motto I follow is “trust no one person or entity completely”.

I’ve even been skeptical of some of the DFINITY projects and proposals, for example the incentives that pushed and prioritized the Compound Maturity Proposal. For example, when I see Dominic Williams reference a software engineer’s “mum” in an appeal to sympathy for a change related to taxable rewards, that’s another fishy/bs meter that goes off in my head. Could totally be legitimate, but it’s better to be safe than sorry with all these initiatives and proposals even if they come from DFINITY, especially in the early days of the IC.

There’s a reason why people say that “Trust takes years to build, seconds to break, and forever to repair”.

We are all here because we are excited about the possibilities of the IC. The ability of the DFINITY engineering team and greater developer community to deliver has inspired a fair amount of trust in the project, but this trust can just as easily be irreparably lost if the Bitcoin integration fails or an exception is made for large VC/ICP stakeholder.

One of the things that gives me hope about this project is the openness and ruthless, but civil discusssion that happens in these forums. Everyone learns and earns trust in the system from watching these successes and failures transparently put out in the open.

If you hear all good news about a project - beware.

If you hear a lot of FUD and criticism about a project, but that project is resilient, responsive, and openly addresses these critiques with hard data - it’s worth following.

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Hey @reboot. I am empathetic to your ICP loss. Many of us donated ICP in the presale for ICProposals and the rug pull that resulted is very disappointing.

For what it’s worth, I wanted to let you know that I was not involved in the ICProposalDAO project as you claimed in this post. The folks at Gigaverse Labs have denied being involved too. The person behind ICProposals made claims about our involvement that were misleading and false.

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Hi Wenzel, thanks for the clarification. I understand your name was used by the scammer and you are a victim as well. The Chinese community is trying to find the scammer and I saw a few clues already been traced. Hope this scam will be remembered and learned by all the people believe in Internet Computer.

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