Cryptocoin Substratum is a high performing altcoin and the company behind it is unveiling a second ICO, but rumblings are gathering that it may be a scam at worst, or a knowingly failing product at best.
Substratum, a cryptocoin which is attempting to build decentralized web infrastructure, saw an 80% growth over the week which ended August 25th according to Hacked, making it one of the top performing altcoins.
On September 7th, Substratum launched a second ICO to fund its third major product, a decentralized exchange called Amplify.
Their first ICO landed them almost $14 million, which has led some to question why they need more money, and why they haven’t launched a viable product.
Brian Li wrote a post on his blog Decrypto which looked in depth into Substratum’s behavior, design, and goals, detailing why Li believes that the project is currently crashing and burning.
One of his main pieces of evidence is funded with the company’s second public ICO, an ICO which notably does not accept Substratum’s native token.
Li points out that if Substratum was close to developing its first two products, it wouldn’t need to gather more money to attempt to capitalize on a completely new market. Furthermore, Li points out that the market that Amplify DEX is entering, the still developing decentralized exchange marketplace, is intensely competitive. Li believes that this is a direct strategy on the part of Substratum, which he claims is leveraging the fact that a decentralized exchange specifically ‘has is a high chance of failure and no one will question you if it doesn’t succeed.’
Furthermore, Li points out the particular fact that the ICO to fund Amplify does not accept Substratum’s token SUB, but instead only accepts ETH and BTC. Additionally, the ICO is public, and not solely soliciting investment funds.
Li contends that this signals Substratum’s lack of confidence in their own products and original token, and amounts to an attempt to galvanize public support through an influx of capital, and then using that windfall to prop up the products which were already in development. Li believes furthermore that Substratum made the ICO public because they don’t believe ‘educated investors’ will want to invest.
Li, in his post, brings up a reasoned possibility that the company might be in a tight development spot. Others have gone further, taking to Reddit and Youtube to double down on theories that Substratum is failing, is desperate to prop up its technology until it can get it functional, or perhaps even is an elaborate scam by its ‘former cat burglar’ CEO.
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