On the fall of a 720 million water Dapp in a single day

Lead: In the past March, a game that broke the Dapp transaction record, a team's incomparably game – 888TRON and TronCrush – played a song with his life. “ Look at him from a tall building, seeing his banquet, seeing him. The developer’s sad song. Although they have not caused too much turmoil in China, the two games correspond to a typical problem. Behind the former is the prisoner's dilemma between the big players in the non-zero-sum game; the latter exposes the technical defects of the developers. And arrogant to the financial market. Some tragedies could have been avoided, and later should be taken as a warning.

DappReview only analyzes Dapp's data and development history from the perspective of third-party research institutions, and does not serve as a reference for any investment and speculation.

The peak of Dapp's single-day trading volume – 888TRON

There is a Dapp named 888TRON, which went online before and after the Spring Festival. The performance was average in the whole of February. There was no too bright result. At the beginning of March, a large number of players and funds poured in, and the transaction amount and the dividend pool were indexed. The explosion exploded, and the Dapp made a dividend every 48 hours. Below is a screenshot of several dividends in March.

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It took less than a week from the 13 million TRX on March 10 to the 256 million TRX dividends that reached the highest dividend in Dapp history on March 16. Translated into a more understandable number, the game will give the player about $50 million worth of TRX in the 48 hours from March 15-16.

And all of this collapsed after March 16th. The following picture shows the 888TRON transaction data. After reaching the peak of 3.6 billion TRX water on March 16th (about 720 million RMB, which is also the highest value in Dapp history), it suffered a cliff type. The crash, the game is already cool, there are still a small number of (being stuck) "believers" are still struggling.

From the outbreak to the crash, DappReview talks about past and present life.

The outbreak of 888TRON in early March was mainly due to the combined effects of the following two reasons:

1. High House edge high dividend: House Edge of most Dice games averages around 1.5%, and 888TRON's House Edge is quite high, reaching 3.5%, which means that in the same transaction flow, 888 can give players The dividend is 2.3 times that of other Dapps. Although the cost of mining is rising, from the user's point of view, the ability to attract high eyeballs is self-evident.

2. Dapp vacuum period Smart Money influx: Now Dapp's circle is like a microcosm of the stock secondary market, speculators need a target that can be speculated and speculative. During the Spring Festival in February, the Dapp market was relatively stable. There were no special highlights and innovative models. The TRONbet's big brother TRONbet's profiteering period has long been a history. It has successfully completed the soft landing from the mining mode to become the platform currency. Transformation. Some miners are looking for the next target with Smart Money. The standard of the target selection is nothing more than: A is still in the early stage, B is red and happy, and C technology is in place. As a target that basically satisfies the above conditions, 888 has naturally entered the radar range of Smart Money.

In this context, 888's trading volume and dividends began to grow at a low level in early March, gradually entering the field of more and more users, "48% dividends can return to 25%" quickly spread to the circle of TRON Dapp users. . A large number of users began to pour into speculation, and everything began to explode.

The higher the climb, the more painful it falls. After the dividend of up to 80 million TRX on March 14th, the 888TRON community broke the scream of billions of dividends. A time bomb behind the mad mining has already been buried. At 8:00 pm on March 16th, Beijing time, 256 million dividends were distributed to 20 million 888Tokens. On average, one Token received 12.8 TRXs. Smart Money has already done well. Preparation for the big retreat:

The huge selling price will be 888 Token from 30+ to 15 TRX. Since then, 888TRON has been falling all the way, until today it is stable around 4TRX.

The mining cost of 888 was about 30TRX at that time. If the secondary market price is much lower than the mining price, rational players who want to hold 888 Token must buy from the secondary market instead of mining at a higher cost. Obtained, so that the number of mining users is reduced, the number of users contributing to the dividend pool is reduced, the dividend is reduced, and the value of the token is greatly reduced. Such a vicious circle, the price of the token is naturally further reduced, and the game is inevitably cool.

So why does Smart Money have to sell after a day of dividends? A few key reasons:

Exchange provides liquidity: This sentence sounds nonsense, but in fact, 888TRON does not have a plan to invest in the currency. The Kiwi Exchange (decentralized exchange) took the lead in forcing the currency on March 13 and gave the user a The place of the transaction. Most mining tokens don't really want to let early profitable users quickly sell chips to leave the market, lock the token's liquidity and so on to better protect the interests of most holders, no secondary market price. The intervention allowed the mining itself to be priced as a token.

No token thawing time: This is the most stupid design of the 888 project. In most mining games, players need to freeze tokens to get dividends. If you need to thaw, most of them set a 24-hour thawing time. That is to say, after the dividends are over, you need to wait 24 hours before you can get the tokens. In the previous example, this design allows the player to sell the token immediately after the dividend is paid. Within 24 hours, if the dividend pool is enough, the holder may choose not to thaw and continue to freeze and eat the next round of dividends. Reduce the user's willingness to leave. And 888 does not have this limitation, users can freeze at any time and freeze at any time.

So interesting things come. Before the dividend on March 16, you can already see that the bonus pool can get 12.8 TRXs with one 888Token. The other part of Smart Money found the arbitrage space here, about 30 before the dividend. The price of the purchase of 888 tokens, eat dividends, immediately thaw the tokens, the exchange sold, then as long as the price of the sale is greater than 18.2, then the return is positive, arbitrage success. In fact, comparing the price of Ante at the same time, we believe that many Ante holders sell Ante to arbitrage, and then buy back Ante after the arbitrage is completed. See below:

The size of the market funds touches the ceiling: for mining tokens, if the dividends are more than the previous one, more funds are required for admission. The total flow of water in the two days from March 15th to March 16th is 78. Billion TRX, according to House Edge 3.5%, a total of 270 million TRX funds locked in the dividend pool contract, while the market Dapp player capacity is limited, 270 million TRX funds have reached the ceiling of the funds available to Dapp players The next big dividend probability cannot exceed this amount of money. This big point is most well known because they know best how many bullets they have played.

The prisoner's dilemma of the big family: On the basis of understanding the above three layers of logic, for the big family, the dividend day is faced with the prisoner's dilemma: the arbitrage disk to the exchange market; the next dividend probability It won't be higher than this one; Smart Money has already passed the dividends of the past four times, with a token cost of 0.

Under the blessing of the peak of earnings and the expectation of short-selling, the big household A does not know whether the big B will be smashed. If you are embarrassed, if I still hold it, then I will be finished. Then the only solution is "砸".

Only hehe.

In order to maximize local benefits.

It is worth mentioning that DappReview has reminded the “no token thawing time” in the communication email with 888TRON on March 13th, but the project party has not made any changes. Until the token was smashed to 10 TRX, most of the users were lost, and then the proposal to vote on the thawing time of the token was made in the telegram, but everything was late.

Let me talk about another case below.

TronCrush

This is a project that was promoted by a large number of TRON Dapp KOL before the launch. Before the first dividend, Kiwi conducted a foreign currency transaction. In desperation, he actively contacted Trontrade, the decentralized exchange of TRON Eco. On the currency.

Previously, due to the preheating, the first day of March 26, the mining water broke through 1.2 billion TRX. Due to the enthusiasm of mining, the project has suspended the game for maintenance. The transaction volume of 27-28 is affected by this. The impact has declined, coming to the eve of the first dividend day on the 29th at 12 o'clock. TronTrade suddenly suspended the transaction of the token TCC. It seems that there are some problems. The TronCrush official claims that there seems to be a bug in the smart contract of the token TCC, which is being checked, but the game has not been suspended.

At the same time, there was a huge sell order on Kiwi without a suspension. The price has been reduced from 6-7 to 2 or less. It is reasonable to say that the dividend is close to 1:2.8. If the TCC is purchased at a price below 2.8TRX, it will be frozen immediately, and the first dividend will be returned. The huge amount of low-priced selling orders in the market must be tricky. Later, according to the multi-party verification, it was found that there was a fatal loophole in the TCC token contract. In the Transfer function, it was not judged whether to transfer money to itself. This makes it possible if you have 100TCC in your hand. Transfer 50, you will have 150 TCC. That is, coinage can be carried out at unlimited cost.

Transfer function with fatal bug

Note: In addition to the Transfer function bug, all the operations of the contract do not use SafeMath. The contract code of the old token TCC and the new token TCT can be viewed in a Github repository on the project side – https://github.com/TronCrush

The bug was first discovered by an enthusiastic user in the TronTrade group and informed the TronTrade team that TronTrade immediately suspended the token transaction and notified the TronCrush project party. However, the project did not suspend the game in time and did not promptly contact Kiwi to stop the transaction. The coin maker created more than 15w TCC tokens out of thin air and sold them wildly on Kiwidex.

After this, the game was suspended, the developer replaced the new token contract TCT, and dropped the new token to the user according to the previous TCC freeze balance. But it was all too late. After this series of events, most users lost confidence and chose to cut the meat out. The game was declared cool in just one week.

On the afternoon of the 27th, TCC's transaction was opened on Kiwi. DappReview reminded developers that the price of the token in the morning exchange will be below 4 in the first dividend, but the developer is confident and thinks that his game. Don't worry too much about the volume of transactions.

At present, the game has a daily transaction volume of about 3 million TRX, which is 0.25% at the peak, and only about 100 people are active in daily active users.

Conclusion

In addition to the technical problems and the mechanism design of the game, the above two cases have exposed the ignorance of the project side to the market. Most of Dapp currently has financial attributes, and the essence of finance is information asymmetry. Smart Money doesn't care about your product logic and game mechanics. It cares about how to use information asymmetry to earn excess returns. If developers don't understand the market, Not to fear the market, but also to develop financial property games, "Mr. Market" teaches you to be a minute.

(Source: DappReview)

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