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Ethereum-based decentralized application 333ETH, one of the protocol’s most used dApp, has been labeled as an “active scam” by cryptocurrency wallet MetaMask, reported Hard Fork on Sept. 28.
Accessing 333ETH via MetaMask throws up a caution message to visitors–stating the website is flagged for malicious reasons and may compromise user data.
333ETH is the most popular application on dAppRadar and provides smart contract-powered “investment distribution” services to users, promising investors a fixed daily return.
With such marketing promises, the platform’s activities are similar to traditional investment frauds which promise fixed returns on automated trading of underlying assets. However, no investment platform in the world can guarantee fixed returns in a trading market, and more unplausibly in the notoriously volatile cryptocurrency market.
Recently, tech website Mashable compared the platform to a Ponzi Scheme, breaking down its 3.33 percent daily return promise on 83 percent of a user’s initial investment–taking the 17 percent for “marketing, technical support, and payroll” costs.
While the system may work as promised, the dividends would presumably stop after the new investments fail to come in, a post which the guaranteed return scheme collapses. However, the 333ETH team page does promise to provide “security of contributions and life-long payments guaranteed by the Ethereum blockchain.”
Perhaps the only respite is the presence of smart contracts governing the 333ETH platform, meaning the dApp’s creators may not pull an elaborate exit scam and run away with all user funds.
The dApp’s promises aside, investors and crypto enthusiasts have propelled 333ETH to the number one Ethereum application in terms of daily user activity. Over 1,700 contributors visit the dApp daily, and upwards of $3 million have been processed in ETH via the inbuild smart contracts.
Interestingly, the dApp triumphs over decentralized exchanges IDEX and ForkDelta regarding sheer user base–a metric which reflects the trading mentality of the cryptocurrency market currently.
While the team at MetaMask is cautioning users from its end to avoid any untoward incident in the future–which could spur into a domino effect that creates investor panic in the broader cryptocurrency market–flagging such crypto-scams is essential to the growth of the cryptocurrency market.
Cover Photo by Markus Spiske on Unsplash
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Post-mining his first bitcoins in 2012, there was no looking back for Shaurya Malwa. After graduating in business from the University of Wolverhampton, Shaurya ventured straight into the world of cryptocurrency and blockchain. Using a hard-hitting approach to article writing and crypto-trading, he finds his true self in the world of decentralized ideologies. When not writing, Shaurya builds his culinary skills and trades the big three cryptocurrencies.
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