In 2021 we saw hundreds of successful Initial Dex Offerings (IDO) for tokens that gave incredible profits just after the launch. But those profits could be even higher if certain parasite crypto funds and individuals didn’t massively dump tokens bought cheap during private rounds.
Token Flippers - the scare of any crypto currency project
We call these malicious parties, who don’t care about a project and only care about making a profit by dumping their tokens as fast as possible, flippers.
Every new period of tokens unlocks we have seen these flippers dump another 100% of their distribution and as a result kill the token price. Such behaviour has a direct impact on the token’s community as well as the long term viability of the project. When other investors see that every unlock period private sale investors dump, they lose trust and hope for those projects.
It is fair to say that flippers are one the main reasons that can cause a negative sentiment and downtrend in the crypto industry.
Investors and their reputation
We are not saying that crypto investment funds should not sell at all. Reasonable profits must exist given the risky nature of investing in startups in the crypto industry. It is ok to take out (part of) the initial investment in the first week of token trading. But an investment fund should never damage the project and its community in the proces.
In the traditional venture capital world, investment funds are incredibly careful with how they exit from their investments. The main reason for this is their reputation. If a venture fund heavily sells their investment in the first days after the IPO, then everyone in the industry will know about it. As a result, these funds will never be able to participate in the most promising start-ups.
We want to create a similar environment in the crypto industry, where investors can’t massively dump tokens without facing the consequences of their actions.
We want to create a similar environment in the crypto industry, where investors can’t massively dump tokens without facing the consequences of their actions.
Introducing ToxicList - an investor reputation platform for the crypto industry
The idea of our ToxicList is to identify and publicly shame these flipper funds on our platform and as a result set a new culture of behaviour in the crypto space. If you are a greedy fund wanting to flip your tokens, without caring about the project you invested in, be ready to appear at the ToxicList Half of Shame. And be sure that the best projects will never accept your toxic money.
After the initial launch of the platform, we will also start collecting about good investors. Investors who sell at a rate that is healthy for the project and its community and that allows the project to grow and foster, while the investor can reap the rewards of his investment. This dataset will create a TrustedList.
Validating investors
Continuously updating the Toxic & Trusted list of crypto funds is a must in today’s vastly developing and expanding crypto industry.
The Hacken core team will play the role of data validator. We will ensure that all submitted information stays 100% anonymous and private. We do validate everything making sure that the data provided is correct and that the investor on which the information was provided is indeed toxic, or can be trusted.
We do understand that many rich funds will be very unhappy with the launch of our platform. But we are ready to accept this risk. Since 2017 we are fighting with hackers, fraudsters and scammers. It is just another battlefield for us.
We at Hacken are mass adoption believers, and we are certain that the ToxicList is the logical next step in making the crypto industry a more mature and safer place where projects and investors can grow together.
We invite everyone to join us by spreading our manifesto or sharing data you have on any investors.
Sincerely yours,
Dyma Budorin
CEO @ Hacken Foundation