ICOs Have Become a Parody of Themselves

Watchdog ICOs exit scamming; ERC20 token wallets getting emptied via smart contract bugs; people dying in token sale publicity stunts: the world of ICOs has become so bizarre it’s impossible to tell what’s real and what’s satire. As a glimpse into the events of the past week shows, there’s never a dull day in ICO land. Nor is there a sane one.

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The ICO Is Dead, Long Live the ICO

It’s easy to take potshots at ICOs; the same thing happens to every shiny thing once it loses its luster. From nu-metal to flared trousers and from Twinkies to mini-discs, everything was cool at one time, until it wasn’t. It’s open season on ICOs right now, and the current crop of crowdsales are making it very easy for the haters to hate.

As Wikipedia explains, Poe’s law is “an adage of Internet culture stating that, without a clear indicator of the author’s intent, it is impossible to create a parody of extreme views so obviously exaggerated that it cannot be mistaken by some readers for a sincere expression of the parodied views.” An examination of the past week’s ICO news – or those of any preceding week for that matter – shows how hard it now is to determine what’s real ICO news, what’s fake news, and what’s satire.

Seven Days in ICO Land

Monday (June 4): It emerges that a hacker has deposited an “unfeasibly large” amount of HADE tokens into Forkdelta and IDEX before withdrawing 26.5 ETH. They did so by exploiting a vulnerability in HADE’s token transfer code.

Tuesday: Blockbroker, an ICO set up to unearth ICO exit scams, exit scams. It’s unclear whether that was always the joke or if the cruel irony was unanticipated by the project’s backers. Meanwhile, the SEC’s Jay Clayton speaks of ICOs taking “bags of cash” to the US border.

Wednesday: It’s reported that one of the token distributors for the Shopin ICO has had its crypto wallet hacked and $10 million stolen. Elsewhere, an ICO Telegram channel is caught selling pooled tokens for projects that it doesn’t even have an allocation for.

Thursday: An ICO emails news.Bitcoin.com trying to drum up publicity over Apple “stealing” its logo. Apple totally didn’t. The same day, a travel writer known as Nomadic Matt launches the world’s first book ICO. You fund it, he’ll write it.

Friday: Fantom, one of June’s most popular ICOs, has its Telegram channel stolen by a hacker. Admins eventually manage to regain control of it. Meanwhile, a two-day ICO competition – a crowdsale equivalent of a battle of the bands competition – concludes with Pigzbe taking gold. For their winning pitch, the team receive a $600k pre-sale investment and a listing on a top three exchange.

Pigzbe

Saturday: All eyes are on EOS, 2017’s most hyped ICO, as it prepares its mainnet launch. There’s just one problem (okay, a few problems): the identity of the block producer overseeing the voting process is being kept secret which goes against the entire principle of blockchain transparency. Oh, and there’s a shortage of tokens required for staking, forcing the project to print another 19,000 to push things through. Weiss Ratings calls EOS “A feudal kingdom with indentured servants”.

Sunday: The week ends as it began, with more suspicious deposits being made on IDEX. On this occasion, South Korea’s Coinrail exchange is hacked and 2.6 billion NXPS tokens from the Pundi X ICO are stolen. That’s 3% of the total token supply.

The contents page of the Ponzico whitepaper

But What About All the Good Things ICOs Did?

Easy as it is to ridicule ICOs, the vast majority are not scams and a fair number of these projects add value to the crypto economy. It’s just unfortunate that the misbehavior and mishaps of the more egregious projects outweigh the good work done by the few. If only all crowdsales were as honest as Ponzico, which makes no secret of its desire to scam investors from the outset. That ICO is a parody; with the rest, it’s often hard to tell.

Do you think good ICOs get unfairly tarnished by the bad ones? Let us know in the comments section below.

Images courtesy of Shutterstock, Uproxx, Ponzico and Pigzbe.

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