Vaporware in the Crypto Realm
The term “vaporware” has been around for decades, but it has taken on a new meaning in the world of crypto. Vaporware in the crypto realm refers to projects that promise great things but never deliver. These projects often make grandiose claims about their technology or their ability to revolutionize the world, but they never actually produce anything of substance.
The Action GameMaster Incident
Action GameMaster was a console that was supposed to be able to play games from multiple systems, including the Sega Genesis, Super Nintendo, and Neo Geo. However, the console was never released, and the company that developed it went out of business.
History of Vaporware Crypto
The history of vaporware in the cryptocurrency market dates back to the early days of Bitcoin. In 2011, a project called Mastercoin was announced in the news. Mastercoin claimed to be a way to create decentralized financial applications on top of the Bitcoin blockchain. However, the project never really took off, and it is now considered to be vaporware.
Vaporware crypto projects
In the years since, there have been many other vaporware incidents for cryptocurrencies in the market. Some of the most notable examples include:
Bitconnect
A fraudulent investment scheme that lured investors with the promise of substantial returns and minimal risk. Bitconnect collapse was in the news in 2018, and many investors lost their money.
EOS
A blockchain platform that promised to be the “most powerful” in the world. However, EOS has been criticized for its high fees and its lack of real-world adoption.
Tron
A blockchain platform that promised to revolutionize the entertainment industry. However, Tron has been accused of plagiarism and of making false promises.
Consequences of Vapourware Projects
Bitconnect
One of the most notorious examples of vaporware in DeFi is Bitconnect. Bitconnect was a Ponzi scheme that promised investors high returns through a lending program. Investors were paid returns that were much higher than what was sustainable, and the scheme eventually collapsed in 2018.
Tron
Tron is another blockchain platform that has been accused of vaporware. The project promised to revolutionize the entertainment industry, but it has been accused of plagiarism and of making false promises in the news. In 2018, the Tron token was trading at over $0.17. However, over time the price has since fallen to around $0.07.
Crypto Vapourware Problems
Web3 projects are often complex and difficult to understand. The technology behind Web3 is still in its early stages, and it can be difficult for investors to understand how these projects work. This can make it easier for projects to mislead investors about their capabilities.
There is a lack of regulation for NFTs and the Web3 space. The NFT and Web3 space is largely unregulated, which means that there are few safeguards in place to protect investors from fraud. This makes it easier for projects to create vaporware and get away with it.
Preventing Vaporware
Do your research. Before investing in any project, it is important to do your research and understand the team behind the project, the technology they are developing, and the roadmap for the project. If you cannot find any information about the team or the project, it is a red flag.
Be skeptical of promises. Many vaporware projects make grandiose promises that they never deliver. Be skeptical of any project that promises to revolutionize the world or to make you rich quickly.
Typical Vaporware targets
Initial Coin Offerings (ICOs)
ICOs are a type of crowdfunding that allows startups to raise money by selling tokens to investors. Vaporware projects are often launched through ICOs, as they can be a quick and easy way to raise money without having to prove that the project is viable.
Initial Public Offerings (IPOs)
IPOs are the traditional way for companies to raise money by selling shares to investors. However, in recent years, there has been an increase in the number of crypto companies that have gone public through IPOs. Some of these projects have turned out to be vaporware, as they have failed to deliver on their promises.
Preventing Vaporware
Here are some additional tips that investors can use to spot vaporware:
- Look for a project that has a clear roadmap and a realistic timeline for delivery. Vaporware projects often have vague or unrealistic roadmaps.
- Find a project that has a strong team with a proven track record. Vaporware projects often have teams with little or no experience.
- Look for a project that has a community of users and developers. Vaporware projects often have little or no community support.
Measures for Crypto Exchanges
Screen projects before listing them: Crypto exchanges can screen projects before listing them to make sure that they are legitimate and have a working product.
Require projects to have a working product: Crypto exchanges can require projects to have a working product before they can be listed. This will help to weed out vaporware projects that do not have any real-world use cases.
The Reality of Vaporware
The reality is that there is no easy way to avoid vaporware in DeFi. However, there are a few things that investors can do to reduce their risk. First, do your research before investing in any project. Read the white paper, look at the team, and see if there is any evidence that the project is being developed, and dont just trust the news.