Article | Interchain Pulse · Liangshan Huarong
On February 23, the ZG exchange was exposed as suspected to be running. This is the second "event" of cryptocurrency exchanges to run after the collapse of FCoin since the beginning of the year.
In fact, the tide of exchange runs that broke out last November is still continuing to ferment. Interlink Pulse has also recently received news from investors of exchange frauds and runaways. It is currently seeking confirmation from relevant personnel and will follow up reports.
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Prior to this, the mutual chain pulse combed nearly forty exchanges that have run or closed since 2019, and classified their routines and reasons for harvesting leek. For reference by industry investors.
In the past, all the cryptocurrency exchanges that have been running can be roughly divided into two categories: one is an exchange with obvious pyramid schemes, with a multi-level pyramid scheme incentive system, which runs directly after the fundraising is completed; and the other is the real development of transactions Business, but the bankruptcy or the running of funds due to insolvency for various reasons.
Although the two are different in nature, they have many similarities in packaging and operation modes.
For one, the founders and core team members are hidden. According to the statistics of the mutual chain pulse, it was difficult to find the true founder and core team members on the open network of the exchanges that nearly 70% ran last year. Such as BISS exchange founder BMAN, MGEX exchange co-founder john podobinski and so on.
Many exchanges have failed to find a trader hidden behind the scenes of the "roll money run" incident. In addition, most of the exchanges are registered overseas, which makes the majority of investors unable to defend their rights. For example, at the Coin-dy exchange that just closed last month, a notice was issued after running away, stating that if there is a legal action, the company will actively respond to a dispute in the Cayman company in Los Angeles.
Second, the interest-bearing deposit mode. Nearly 90% of the exchanges that have been running have exhibited various types of money-trading routines for depositing and generating interest, that is, the exchange itself issues platform currency, and Fou users exchange mainstream currency for their platform currency, enlarging assets N times or increasing their annualization. The rate was locked up to generate interest, and at the same time the illusion of rising currency prices was created. For example, the mining tribe carried out by the MGEX exchange with up to several hundred million yuan in funds, Bitgogo's golden lock plan, the IEO X plan, and so on.
Third, subscribe to mainstream currency routines at low prices. After the IEO, the exchange of tokens at low prices is a means for the exchange to use the traditional Internet industry to burn money to obtain customers, also known as "non-starter discounts." After this model became popular, it was gradually developed by many pheasant exchanges into an empty glove white wolf. For example, the SOXEX exchange launched a 50% discount on bitcoin and multiple rounds of platform currency subscriptions in July last year. In just 10 days or so, it has harvested more than 220 million people, and the last round of platform currency subscriptions has been announced directly. Off the road.
Fourth, the MLM incentive system. Users are the "parents" of the exchanges. Almost all exchanges will introduce "pull back to new commission" incentive system. However, among the exchanges that ran away last year, a considerable number of exchanges directly adopted the MLM incentive system. The most typical of these is the Wantong Kaiyuan Exchange, which has adopted a MLM model of "transaction mining to release commissions", which has attracted more than 300,000 members to deposit in just two months.
Fifth, a large number of MLM and Air Coin projects were launched. Last year, non-first-tier exchanges such as matcha and BiKi quickly fissured a large number of users with model currency and resonance currency. Many second-tier and fourth-tier exchanges followed the trend and launched a large number of MLM coins and funds. The joint project parties harvested leeks. With the collapse of a large number of MLM coin bubbles, the collapse of model coins and resonance coins, users have been cut off, and exchanges as accomplices have also ran out of money.
Blind to follow the trend of "model innovation", the crash is already doomed
As the top predator in the currency circle food chain, cryptocurrency exchanges are destined to be only a few.
But according to relevant media statistics, as early as the end of 2018, the number of global cryptocurrency exchanges has exceeded 11,000. The number of exchanges continues to increase in 2019, but there has been no large-scale growth in cryptocurrency trading users, which has further exacerbated the situation of "excessive monks and less porridges" on exchanges.
In 2018, FCoin has risen rapidly with the "transaction is mining" model; after entering 2019, second-tier exchanges such as matcha and BiKi have also obtained a large number of users and so-called "model innovations" through IEO, listed resonance coins, and model coins. Considerable benefits.
This kind of “model innovation” with quick money has attracted a large number of speculators. Most of the newly established exchanges in 2019 are followers of the so-called “model innovation”.
But obviously, they far underestimate the operation and maintenance capabilities and potential risks of cryptocurrency exchanges.
According to the statistics of the mutual chain pulse, among nearly 40 running or closed exchanges, more than 70% of the exchanges were due to insufficient funds due to various reasons such as too high operation and maintenance costs, insufficient funds to make ends meet, or sudden withdrawal of funds by investors. Off road or bankruptcy.
In addition, a small number of exchanges have stolen assets after hacking the system, causing the platform's capital chain to break and inability to repay user funds, which forced them to declare bankruptcy.
In fact, in the cryptocurrency trading market, the head effects have become very prominent. Some people in the industry have pointed out that currently 80% of user traffic is concentrated in the top 20 head exchanges, and the remaining thousands of small exchanges can only divide up 20% of the market. The second- and third-tier exchanges are still struggling with the food and clothing line, and smaller exchanges are unable to make ends meet.
But currently, capital is still frantically massing exchanges. According to the statistics of the Interlink Pulse Institute, starting from July 2019, almost 10 exchanges have received financing every month, and as many as 19 exchange financing events occurred within one month at the peak. Even in January of this year, when the blockchain capital market sharply cooled, the exchange was also the field with the most investment projects.
From the perspective of industry competition, when exchanges are oversaturated and lack a benign exit channel, crashes run out or most exchanges are already doomed.
This article is the original [Interlink Pulse], please indicate the source when reprinted!