Latest developments
In April this year, ZKasino, the decentralized betting platform of the ZK ecosystem, was caught in the "running away" scandal: tampering with website activity introductions, refusing to return users' pledged Ethereum for participating in activities, closing Telegram speaking permissions, and canceling offline meetings in Dubai. , unauthorized transfer of user funds to Lido for pledge... Many users suspect that ZKasino has become "soft rug". On May 28, ZKasino officially responded that it had launched a 2-step cross-chain return process, and cross-chain users can register and return their ether across chains at a 1:1 ratio. Registration data will be collected over the next few days and a new announcement will be made as soon as possible to provide data for public verification.
However, as of August 14, the decentralized entertainment platform ZKasino, which had previously "run away", had not yet made a refund, and the funds raised by investors still stayed in the original two addresses.
On November 23, according to on-chain data analyst Ember’s monitoring, the ZKasino address began to misappropriate “funds to be returned to users” to leverage long Ethereum on the chain. They deposited 5,270 Ethereum into Aave as collateral and borrowed 1158.9 10,000 DAI, and then added 3,500 Ethereum coins.
On November 28, the ZKasino project team continued to lend 9.36 million DAI to purchase 2,603 ether coins. After depositing the user's 10,535 ether coins into Aave as a deposit, the ZKasino project team has lent a total of 53.77 million DAI to purchase 15,645 ether coins. Let’s go long Ethereum with leverage. The average price of the Ethereum purchased through leverage is US$3,437. With the surge in Ethereum, the ZKasino project party has misappropriated the user's Ethereum as a margin for leveraged long operations and has now made a profit of US$3.22 million. Judging from the data on the chain, ZKasino is not "unable to repay", but openly chooses to "profit from user assets." Every step of ZKasino's operation is squeezing users' trust and assets, which completely deviates from the original intention of decentralization and transparency. The ZKasino project party used users' funds to earn floating profits in high-risk operations, but turned a deaf ear to the issue of returning users' funds. This is undoubtedly a secondary harm to the victims.
ZKasino incident
Back on April 19, many community users discovered that Ethereum refunds were delayed after the ZKasino staking event ended. Later, through the Wayback Machine, ZKasino deleted the sentence "Ethereum will be returned and can be returned across the chain" from the Bridge funds page on the official website on April 18, causing users to panic and question whether it was planning to "take the money and run away". road". Users who participated in the staking activity flocked to ZKasino’s official Twitter to ask questions, and Telegram also became a rights protection position. However, it didn’t take long for ZKasino team members to close Telegram’s speaking permissions.
Source: Telegram
On April 20, the MEXC trading platform that originally planned to launch ZKasino (ZKAS) on that day issued an announcement stating that the launch and withdrawal of coins would be postponed, and ZKAS deposits would also be temporarily suspended. MEXC staff responded to ZKasino's "running away" question by saying, "We are just one of the investors. The behavior of the project side has nothing to do with us. As investors, we are also victims."
After much pressure from many parties, ZKasino finally gave a brief response: There are currently a lot of FUD rumors. The ZKasino network will continue to be launched, after being delayed due to exchange listings.
Source: BlockBeats
However, users did not buy this simple response. "When to refund?" "Whether it is a soft escape?" and "Why change the mainnet refund description?" have become the main conflicts at the moment.
On April 21, according to on-chain analyst Ember’s monitoring, ZKasino transferred 10,515 Ethereum that users deposited into ZKasino across the chain to a multi-signature address, and subsequently deposited it into Lido. These Ether coins were deposited by users across the chain into ZKasino for mining. However, the ZKasino project team modified the official website description and forcibly exchanged the Ether coins deposited by users into its platform tokens.
On April 22, Big Brain Holdings, which had previously been revealed as one of ZKasino’s investment institutions, issued an article “refuting rumors” and denied participating in ZKasino’s financing.
Image source: BlockBeats
At this point, users' concerns seem to be being "confirmed" step by step. Some users also discovered that as early as March 16, Kedar, the founder of the Ethereum Layer 2 ecological DEX project ZigZag, had warned that ZKasino seemed to have problems. In Kadar's post, most of the ZKasino income he mentioned was fake. , users should be cautious in participating in their ICO activities.
ZKasino's latest post only announces the next step of the project: "All ZKasino games will be moved to the new chain - and will still remain on Arbitrum and Polygon. Native DEX and stablecoins will be launched soon. Chapter 1 A batch of ZKAS was distributed to cross-chain users.”
However, there were no congratulations or celebrations in the replies to the post, only users asking over and over again: "When will the refund be given?"
Opinions and Suggestions of Crypto VCs and KOLs
As a "star" project on ZK, many KOLs participated in and recommended the project in the early days of its launch. Now that such negative events occur, these KOLs have naturally become the target of public criticism. In the Crypto industry, how to avoid pitfalls and who should be held responsible if problems arise in the project? ABCDE Capital Lianchuang Dujun, encryption KOL 0xSatoshis, @0xkillthewolf, etc. expressed their opinions, and Rhythm BlockBeats compiled them as follows:
ABCDE Lianchuang Dujun (@DujunX):
As for the project team running away, I see that everyone is holding investment institutions and KOLs accountable. Although it makes sense, I think it is a bit absurd.
In the Crypto industry, 95% of investment institutions are actually disadvantaged groups. They lick the project side to get the quota, lick the platform to list the currency, lick the LP to give money, and just lick the dog.
In the first few rounds of a good project, these institutions have nothing to do, let alone DD on the project team. Thank God if you can send money to the address. KOL seems to be strong and even some projects have KOL rounds, but in fact they are still at the bottom of the food chain and have no say. If the KOL does not collect money to order, it will be difficult to hold them accountable at the legal level and can only be morally condemned. Looking at it, only the head exchange is at the top of the food chain, and the other roles are just soy sauce.
When the project side runs away, everyone looks to investment institutions and KOLs to protect their rights. Institutions and KOLs also invest real money, so who should they go to to protect their rights? In the jungle society of Crypro, we must pay for our investment results and keep learning so that we can earn more and live longer.
Finally, we strongly condemn the parties of the illegal projects and the KOLs who call for orders for these illegal projects. We hope that unscrupulous projects will be punished by law and their coins will be refunded as soon as possible, so that everyone’s wallets will be safe.
Image source: BlockBeats
Crypto art creator Niq (@niqislucky) replied:
Admit it: most staking projects are just like sending money to a "multi-signature address". Unless the team is well-known, VC brand endorsement is almost the entire basis of trust for retail investors. KOL? Responsible for spreading the news and even taking the blame.
VCs are only weak in comparison. If you can't get in, you will be a loser. No matter what, for retail investors, information/funds are completely crushed. If we are not on the same level, who can we write to empathize with? Retail investors only feel like crocodile tears...
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Crypto KOL 0xSatoshis (@0xSatoshis):
In view of the status of Zkasino's soft run, I have reviewed all the pledge projects today, except for ATOM+OSMO+TIA+DYM pledges.
Projects currently participating in staking include:
swell+eigenlayer+renzo+puffer (within 20E in total)
Blast initially invested 25E, but now only 6E is left, and points inflation is serious.
list 5,000 多 U
merlin pledged Runestone
bouncebit less than 10,000 U
Next, the principal will be recovered from time to time, or the position will be reduced to a reasonable position (the so-called reasonable means returning to zero, which is acceptable). I always feel that the risk of pledging matryoshka dolls is very high now. One dollar is in A\B\C\D \E The TVL pledged once for each project has become 5 yuan, but the market is still only 1 yuan. If the middle water escapes or there is a hacker attack, the risk is continuous. Exit while there is still liquidity. Partially.
In addition, I would like to emphasize again, don’t believe KOL’s call for orders, including me, a little leek, just study the content shared by others carefully. As for whether you want to invest in the end, you must make your own decision. Investment is our own business, KOL provides us with content. Provide information to assist us in decision-making.
It is recommended for novices to participate less in pledge projects. The principal comes first. Old leeks should control their positions and gain critical hits at low cost.
Brothers, you can make less money, but you can’t lose all. When pledging, you must control your position. It is not recommended to use off-site leverage to borrow money to pledge. Nothing is impossible in Web3. Don’t always think that there will be no problems. At the beginning, there were many FTX People, including me, think so too. No snowflake is innocent in an avalanche, so do your own risk control in advance and be responsible for your own wealth.
Finally: All the projects I participated in in this article are only my own review and do not constitute investment advice, and I am currently reducing my position. Please make your own judgment, DYOR!
Image source: BlockBeats
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Crypto KOL killthewolf.eth (@0xkillthewolf):
ZKasino is a hot topic now. Although I did not invest in this project or participate in staking, a total of 4 people asked me whether I want to invest in this KOL round. I will write down my thoughts and experiences here, hoping to help you select projects in the future. helped.
The KOL round valuation is US$9 million, and TGE unlocks 15%. This condition seems to be a no-brainer at first glance, because the institutional valuation is US$350 million, which is 40 times cheaper than the agency. As for TGE, which only unlocks 15%, in fact, I only need 6,000,000 US dollars of FDV to make back the capital, and institutions have already given a valuation of 350 million US dollars.
The main 2 reasons why I didn’t participate in the end:
Why is it valued at 350 million? Ethena, which was recently listed on Binance, is valued at 300 million, Puffer Finance is valued at 200 million, and how can ZKasino, a gambling platform, be valued at 350 million? Because of this valuation, I am skeptical about this round of financing packages.
The project party claims a revenue of 8 million. Although everyone agrees that this figure is somewhat watery, I still checked the addresses of the top 20 users on the platform and found that they were all small addresses suspected of being used by the project party.
The founder’s character is very questionable. Previously, their official account used a bloody murder video as a joke for marketing purposes. That incident also caused a stir at the time. @zachxbt also exposed various things this person has done: https: //x.com/zachxbt/status/1731025316204745113
So from my perspective, the valuation of this project was fake, the revenue was fake, the character was bad, and there was no conscience, so in the end I didn’t participate, and I was lucky enough to avoid a big pitfall.
Image source: BlockBeats
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.
This article is reprinted with permission from: (Blockbeats)
Original author: Lila
"Too bad! ZKasino was shocked to report that he ran away in April and even used customer funds to speculate in coins to earn 3 million mg." This article was first published in "Crypto City"
