Go2Mars Research

On May 3, 2023, while the public was still enjoying the afterglow of the May Day holiday, for many friends in the crypto community, this night was not an easy one. In the middle of the night, many investors did not expect that the "golden dog" XIRTAM, which has been called by KOLs recently, would be listed on SushiSwap in the early morning, and then fell from $0.02 to $0.0018. The market value plummeted by 90% in just a few hours, which can be called the BitRun of the crypto community. At present, it has been verified by many parties that it is a Chinese plate packaged as a foreigner.



So, how is the pig-killing scheme in the crypto circle made? What characteristics should an excellent "sickle" project have? How is the public's FOMO sentiment mobilized? What stakeholders are involved in the process of the project party running away?

In order to get answers to these questions, we chose to conduct an in-depth project review and analysis of XIRTAM. This is not only a project study, but more importantly, we hope to sound a warning bell for our friends in advance to avoid losses in such cases in the future.

A scam packaged as a quiz game: Introduction to the XIRTAM project

Looking back at the birth of XIRTAM, we have to say that the project team has found a good place to take root. XIRTAM is the first protocol proof deployed on ARBITRUM. You should know that ARBITRUM is a project with good completion and user experience in L2. Its current market value is 166.669 billion US dollars, accounting for 0.14% of the global total market value. Among them, the star project ARBDOGE focuses on AI+community co-construction, and its current market value is still over 100 million US dollars.



Back to XIRTAM itself, the project's introduction is also very straightforward: the world's first advanced non-KYC blockchain reputation building system.



Looking through the project's white paper, we can learn that XIRTAM actually wants to create a free Play-to-Earn game world, and players can participate without purchasing any tickets. The ultimate goal in the white paper is to allow the community to embrace various game characters and freely manage a decentralized player-owned economy.

So, in order to achieve the grand goals of the white paper, what efforts has the project team made in mechanism design and packaging?

Proof-of-One Mechanism

Many project owners will use some new concepts that seem obscure or unclear to highlight their differences. For example, we can try to take the first letter of an English sentence and capitalize it to form a new word, which will make the tone seem better.

Go2Mars "Encrypted Leek Harvesting Guide" Article 1

In XIRTAM, the project proposes a reputation-based mechanism, Proof-of-One (P.o.O), where users can build their own reputation through various internal platforms and eventually become part of the consensus group that determines the status of the protocol.

The project claims to use the power of reputation to build a reliable, permissionless, blockchain-based Proof of One protocol that allows users to participate, compete and receive rewards. It brings its platform with high-quality gameplay and entertainment content into the evolution of the next generation of fascinating quiz competitions, achieving fairness while ensuring competition.

Game Mechanics

In the crypto world, if you make games (Gamefi), people don’t care how interesting your game mechanics are, as long as you can make these speculators make money, or pretend to make money.

Go2Mars "Crypto Leek Harvesting Guide" Article 2

All users are invited to participate in monthly competitions to test their knowledge of blockchain and cryptocurrencies. Points are earned by answering a certain number of questions each month, with options including true or false and multiple choice, allowing users to earn cryptocurrency while playing and winning, and rewarding winners. Those with a deeper reputation and continued drive are selected to become more comprehensive in the crypto field and manage the network.

Of course, since it involves earning cryptocurrency, it is only natural that the native token $XIRTAM was created to power the ecosystem.



The project claims that XIRTAM allows anyone, especially the working class, to demonstrate their understanding of blockchain without having to worry about having any financial leverage. Does it feel familiar to quiz shows such as "Quiz Up" or "The Brain"? Yes, this is a quiz game.

PvP Arena

But after all, it is an encryption project, and the game mechanism cannot be designed too explicitly. Properly increasing the interaction between players will be more conducive to the growth of the number of users (leeks).

Go2Mars "Crypto Leek Harvesting Guide" Article 3

Seeing the economic model of PVP battles, this action returns more to the original GameFi theme. However, one thing that has always been criticized about GameFi is that it is a zero-sum game between players and lacks positive externalities.



The knowledge learned in the XIRTAM project is the source of positive externalities, just like StepN attracts many friends who love running to participate. Players can bet on their own implementation competitions, win bets and get rewards through their own expertise.

Governance

Allowing users (leeks) to gain the so-called "sense of participation" is the best protection and disguise for the plate.

Go2Mars "Crypto Leek Harvesting Guide" Article 4

The so-called user autonomy is essentially a manifestation of the winner-takes-all approach, which can be used to motivate people to learn knowledge or cheat.



Those with the highest points will be granted voting rights and have a say in the direction of XIRTAM, in addition to maintaining anonymity and an ambiguous social identity system on the blockchain. Users with lower scores will be encouraged to work hard to learn blockchain knowledge and develop cognitive skills to receive such rewards.

XIRTAM’s Token Governance

If a project claims that there is no VC involvement and the founding team does not keep any shares, then there is a 99.9% probability that it is a scam project and a 0.01% chance that it is a great attempt at decentralization.

Go2Mars "Crypto Leek Harvesting Guide" Article 5

Every time the native token $XIRTAM is bought or sold, a portion of the tax will be allocated directly to a monthly prize pool that will be divided equally among the top 10 scorers of the leaderboard for that particular month. Access to this pool is only gained through continuous efforts to learn more about cryptocurrencies, attending every conference, and gaining a reputation of scoring in the top 10 of the monthly leaderboard.



If we look at its token economics, we will find that the XIRTAM team specifically stated on the official website that they have no VC fund involvement and no team tokens reserved. Of course, this statement should be a warning, because you don’t know that they are actually targeting your principal.

From project establishment to running away: Analysis of the XIRTAM incident

Looking back at XIRTAM’s historical tweets, the project team first proposed the concept of XIRTAM in January this year. The cycle was from January to early May, and the peak period of promotion began in March. The phenomenon of KOLs in the Chinese area shouting orders was very obvious.

XIRTAM’s Money Raising Process

The harvest of leeks is quick and easy. A project can be laid out for a long time, but the harvest is often just a moment. But please note that the turnover of funds is also an issue that needs to be carefully considered.

Go2Mars "Crypto Leek Harvesting Guide" Article 6

From April 23 to 26, the project conducted a public offering on FjordFoundry and successfully raised 2.11 million US dollars. The ending price was 0.0456 US dollars.

The project team then announced a public offering on Alienficoin on April 26. AlienFi is the Arbitrum ecosystem DEX and fundraising platform. The XIRTAM project team was supposed to launch an IAO (Initial Airdrop Offering) with AlienFi on April 26, but because it concealed a previous invisible seed round of fundraising of 310 ETH at a unit price of US$0.0125, AlienFi cancelled Xirtam's IAO qualification.

In the public pre-sale on the 29th, the project team raised funds on Pincubator_io at a unit price of 0.037, raised 633 ETH and mapped the token to Arbitrum.

Finally, XIRTAM was listed on Sushiswap and opened for trading in the early morning of the 3rd, adding only 20ETH of liquidity. The price of the currency plummeted, and the project fell to the bottom a few hours later. It is still struggling at the bottom.



XIRTAM raised about 2,000 ETH in several rounds. Interestingly, the project owner who ran away later transferred the raised ETH to Binance. Currently, Binance has helped freeze the funds. The victims quickly found evidence of the lost funds and reported it to the police and submitted it to the customer service. This also shows that the project owner lacked experience in running away.

Security audit? KYC?

High-end PR packaging often comes in the form of security audits and KYC.

Go2Mars "Crypto Leek Harvesting Guide" Article 7

Based on previous security audit cases, similar phenomena occur from time to time:

  • On the first day, the project announced the completion of the security audit;

  • The next day, the project team announced that it had reached a TVL of $XXX million in liquidity;

  • On the third day, the project party ran away with the money.

The audit opinions of auditing companies are usually "standard unqualified opinions" - if this happened in the world of web2, and it happened to a listed company, the accounting firm's license would have been revoked long ago. However, in the crypto world, security audits are often not reliable, and many companies that have undergone security audits themselves still run away in the end, as if the audit report is of no use at all.

This brings us back to the agent problem - in the absence of a reasonable disciplinary mechanism, who do security audit companies collect money from? Who do they work for? - It is obvious that without clear disciplinary measures, the so-called security audit report is nothing more than a high-level PR article.



As for KYC, there is no need to mention it. After all, the avatars and core team on the official website said that they were not Chinese. However, when the incident was exposed, it was discovered that the project team was actually made up of people born in the 2000s in China.

Of course, this incident can also bring us some reflections. Since it is a project run by a group of foreigners, why do they create WeChat groups every day? An all-English official website does not mean that the team is all overseas. It is better to be cautious when necessary.

The sin of KOL?

Go and cooperate with those KOLs, as long as the money is enough. If it is not enough, you can also issue your own tokens to make a fuss.

Go2Mars "Crypto Leek Harvesting Guide" Article 8

After the Rug incident, many Chinese influencers and KOLs expressed regrets - they regretted not doing a good job of risk control and controlling the risks of the project, and they did not expect the project owner to run away...

These are pure excuses. KOLs accept certain benefits to support the project and should bear corresponding responsibilities for the consequences.

While the Chinese community is still criticizing KOLs and even conducting human flesh searches, a KOL in the United States across the ocean is being sued for using his influence to promote FTX. At the same time, the European Union has passed a law requiring influential people to disclose risks related to encryption, thus moving in the right direction.



Every investor should not blindly believe in KOLs but use independent judgment, and regulators should seriously promote how to improve the management of these influential KOLs.

Summarize

As an educational project, Xirtam has indeed provided a deep and impressive education to its participants. In this season of popular memes, people will inevitably feel FOMO when they see the KOLs posting their orders earning hundreds or thousands of times more.

There is nothing wrong with playing with Tugou MEME, but you must make your own research and judgment before making any investment, and always remember one sentence:

In crypto, the only person you can trust is yourself.

references:

[1] XIRTAM Whitepaper：https://xirtam.gitbook.io/docs/

[2]《Crypto influencer named in FTX lawsuit served via tweet》https://cointelegraph.com/news/crypto-influencer-named-in-ftx-lawsuit-served-via-tweet

[3]《Taking down crypto influencers is one step that would help to heal the market》https://cointelegraph.com/news/more-laws-are-the-solution-for-taking-down-crypto-influencers