[JohnMakin]

> Basically we were planning to only make money on fees, which already seemed too much for us considering we'd rather have low fees and more user satisfaction. But what investors in the crypto world wanted was not only fees, but actually even more than that. They wanted us to create our own crypto (on top of the NEAR blockchain) and basically manage it like our own mini financial asset (of course not declared as such because that would be in a grey legal area). With staking, giveaways, and other mechanisms to create more and more of it, or to pump its value over time.

I, for one, am shocked.

[namaria]

Scam-as-a-service. People wanna run a grift AND they want the playbook ready for them. That's just... wow. I don't know why I'm surprised but I always assumed crypto scammers were at the very least building their own scams.

[moffkalast]

Shocked! Well not that shocked.

[Animats]

He figured it all out correctly. Somebody hire this guy for a legit business.

This is the problem with a true blockchain-based distributed exchange. It makes money only from fees. All the exchange does is match orders locked in for a time by smart contracts and tell both sides "go". The exchange operator doesn't get their hands on customer funds, so they don't get to become a big company like FBX.

[JohnMakin]

It's funny that even a "naive" college-aged kid can look at the situation and determine on his own that it doesn't look quite right, but so many others seemingly couldn't.

[tredre3]

I suspect most people fully understand that things are questionable at the very least. But they usually think they're more intelligent and they'll be able to skirt around laws by creative usage of terms or betting on being technically correct.

As the old saying goes:

    It is difficult to get a man to understand something, when his salary depends on his not understanding it.

[yieldcrv]

There is some merit to that

Think about it: you have no-coiners running around like “why does that need a token!? there is no use case for anything, I looked at the top 100 things on Coinmarketcap…”

Not noticing that they only found things with tokens because it advertised to them effectively, completely missing the products that do not have a token attached

Splitting the protocol fees with a subset of token holders who choose to stake is an ok human coordination mechanism, even gets no-coiners to look and swayed too late by a grifting youtuber at the top of the next bull market

[pavlov]

> “Splitting the protocol fees with a subset of token holders who choose to stake”

The problem is that this is the very definition of a security, and you will run afoul of powerful regulators in some important countries if you’re offering unregistered securities over the internet to all comers.

[yieldcrv]

right, the only reason people do it this way is that they only care if the token is a security, not whether some application only accessible by the token is

nobody cares if some random unpausable smart contract that happens to use the token is creating securities transactions

the only people getting targeted by those powerful regulators are the centralized custodians that resell access to those smart contracts. so the Coinbases and Binances and Geminis, not the AAVE’s and ETH2 contract deployers for example

Its not even supposed to be a workaround, its just the consequences are completely fine. “hey your token is fine and can be traded everywhere, but the primary staking smart contract that happens to be linked to platform fees for the project of the same name is an unregistered securities vending machine! we’re sanctioning it and it will keep operating autonomously regardless! no, it has nothing to do with the token of the same name, why do you keep asking that”

prior token project evolutions would extend dividends to all token holders, which would introduce liability to the status of the token certainly. exchanges wouldnt even list those tokens because there would be nothing to argue to securities regulators. now its rapidly iterated to something more inconsequential and ambiguous, or just inconsequential