Why we believe the Dynex cryptocurrency is a scam
With cryptocurrency there often a veil of mystery. Starting from the days of Bitcoin and it’s anonymous founder (or group founders) using the alias Satoshi Nakamoto. There are many cryptocurrency projects launched each week ranging from meme coin rugpulls like Squid Game to VC backed projects like Ethereum, Iron fish and Solana, looking to invest for a return in fiat money. These projects can have issues, etc. but are not scams per se.
One recent coin that has been rising in awareness is the Dynex PoUW coin. Many people are weary about this coin. The Dynex project has supposedly created a distributed computing model they call the “Dynex Neuromorphic Computer”. This means that the distributed network of GPUs (and possibly FPGA and ASICs) will perform useful work and be paid back in the Dynex cryptocurrency. This all sounds good and well, but there are quote a few red flags regarding this project as well. None of this is investment advice. Always do your own research. All information here is publicly available.
Here we list our reasoning why the Dynex project is highly likely a scam orchestrated by SEC sanctioned Austrian business man Daniel Mattes.
1. Veil of anonymity and blocking information
The Dynex project claims to have come from a research project. They are supposedly in the process of incorporating in the tax heaven of Lichtenstein in central Europe. While it is understandable that a team may choose to be undoxxed, but usually there would be a valid reason for it. It is suspicious to pump the coin price and push it on exchanges before team doxxing.
In this case there seems to be no valid reason given for anonymity, aside from simply wanting to stay anonymous. Why? Your technology is already open source (see below). Also handily the blockchain itself is encrypted, allowing insiders to move around large amount of coins anonymously.
But none of that privacy matters if your operations on hiding your personality is done very poorly, with personal information available in open data sources in your own distributed version control system that can be duplicated at a click. Deleting the repositories won’t cover the tracks. This record cannot be scrubbed since there are copies around the globe.
2. Business model? Why pump a cryptocurrency?
Next why did this research driven team without any experience in blockchain choose to go through the route of an anonymous cryptocurrency? They claim they see a large number of GPUs in the mining market that is underutilized. This is true and there are other PoUW (Proof of Useful Work) blockchains being developed, but there are challenges in this.
The team also claims to be doing a lot of continuous work, but none of this progress is shown in a major way in the public GitHub repositories of the project. So far the core assets have been unchanged since for 6+ months after the launch of the project. The team has spent time on fixing their substandard web wallet as well as pumping the price via AMA and exchange listings. Almost as if preparing for a pump and dump here.
Also, it is disturbing that the Dynex project forced us to do a disclosure of trivial XSS vulnerabilities in the Dynex Blockchain Explorer. The team never got back to us via email. Instead they chose to block us on Discord.
Finally: Why is the “Dynex Neuromorphic Computer” only being pumped through the crypto? Why is the technology industry and associated media not picking up on this publicly available information on a transformational technology shift in computing? So many unanswered questions on Dynex.
3. The DynexSolve algorithm, technology jargon and blocking skeptics
The Dynex team seems to be adamant that their technology is so advanced that it cannot be explained in clear fashion. In their communications they keep referring to very technical terms, in a way that doesn’t seem to give any real answers. The project quotes some references, but there is no evidence beyond their claims and a few videos showing “something” is happening on a computer screen. It is difficult to take these seriously.
The DynexSolve algorithm is also a bit of a mystery. The team says they had it published as open source, but then removed it because of abuse in December 2022. Currently they have the reference miner public. It uses some binary libraries that have the username of “daniel” included in them.
There are also two third party miners (SRB Miner and OneZeroMiner) that implement the DynexSolve Algorithm. Curiously some like Lolminer who have refused to implement DynexSolve. Why is this? Are SRB and OneZeroMiner using the provided blackbox library doing something? It would be interesting to hear from OneZeroMiner and SRB devs on how they have implemented DynexSolve. Why Lolminer refuses to implement it?
In addition to miners Dynex also offers a reference implementation of their “proprietary” Dynex Neuromorphic Chip. This implementation seems to include two open source SAT solvers for both CPU and GPU (CUDA for Nvidia). It is a functional SAT solver, but does it have anything to do with the DynexSolve algorithm? If so, then what exactly is the proprietary IP they need to protect since they have licensed DynexSolve under the permissive BSD Open Source license? Read the terms on that one, people.
A good sign of someone telling they’re worth their salt is that they can explain complex topics in a simple way. The project lead “Sumitomo” (who we believe is Daniel Mattes) is clearly versed in bullshit, but not deep technical insight needed to explain complex topics in simple manner.
In addition to casual communications on Twitter and Discord the Dynex team has published some research document looking whitepapers. In these documents they have a lot of information about their technology, which at a glance seems to be legitimate. They are also very attached to repeating some terminology like “intractable” in their communications sounds like it means business.
However, if you look closer at the sources and the topics they refer to it seems that they are parsing together and incomprehensible soup of different concepts like quantum computing, memcomputing, neuromorphic computing, bio-inspired and more. Without having any public peer reviews published on these topics it is difficult to take these publications from the Dynex project seriously. In fact, you could look at them critically, say the DynexSolve paper and question if they actually a describe a patented invention: SELF — ORGANIZING LOGIC GATES AND CIRCUITS AND COMPLEX PROBLEM SOLVING WITH SELF — ORGANIZING CIRCUITS
As reference to this we recommend looking into some research and commercial information on related where their “research” and technology marketing claims seem to be originating from:
- m0leCon 2020 — Fabio Traversa — Memcomputing and Empirical Results Using Self-Organizing Logic
- Introduction to MemComputing and its Applications in High Performance Computing
- Hello Tomorrow Global Summit Presentation (Memcomputing Inc.)
- Autonomous Vehicle Routing Optimization
(pay attention how to how Dynex has even chosen to use the exact same stock video footage at ~30 seconds)
We have earlier invited the Dynex project to respond to our comments on the public bitcointalk.org forum, but they have yet to respond: Dynex [DNX] | New POW World‘s First Decentralised Neuromorphic Supercomputing Platform
We repeat our invitation to address our feedback on a public forum. We do not feel the Discord of the DynexCoin project is a fair forum for discourse.
4. The recent ventures from Daniel Mattes have failed to yield much results (aside from litigation)
Since his earlier ventures Daniel Mattes seems to have lost his Midas’ touch. After being forced to pay back almost $17 million for his fraud in Jumio in 2019, Mattes has not been very successful in his business ventures.
His flagship venture, 42.cx set out to provide advice for Artificial Investment advising and technology development, but instead ended up a being closed down in 2022 following a failure to make their K1 AI investment technology perform according to Mattes’ claims:
“Speaking to Bloomberg, 42.cx founder Daniel Mattes said none of the computer scientists advising him were involved with Deep Blue, but one, Vladimir Arlazarov, developed a 1960s chess program in the Soviet Union known as Kaissa. He acknowledged that experience may not be entirely relevant to investing. Algorithms have gotten really good at beating humans in games because there are clear rules that can be simulated, something stock markets decidedly lack. Arlazarov told Bloomberg that he did give Mattes general advice but didn’t work on K1 specifically.”
- Going to Court Over Losses When Robot Is to Blame
Before shutting down, it seems Mattes’ seeked to open source his artificial intelligence platform: https://github.com/ares-austria/AI-Analyst
Another ones of his now defunct ventures was been Q.Solutions. That company also had made a breakthrough in computing, describing the Q.Solutions product in very similar words to what Dynex is now presenting.
So, Mattes has a clear tendency to go for easy money by talking up his companies, but ending up just enriching himself to support his lifestyle.
5. Patterns indicating that Dynex is a Daniel Mattes venture
By now it is beyond easy to show that either Daniel Mattes is behind Dynex or someone desperately wants everyone to believe that (unlikely). From revealing his first name in an AMA to his username being written all over the place in the Dynex codebase:
- https://github.com/dynexcoin/Dynex/commit/6e9f33e6800ca99495ba4cfcbbc00b8601cc86ef
- https://github.com/dynexcoin/Dynex-Blockchain-Explorer/commit/fcf9a6e4df9511583943ff6206c23f83f15521fb
With the sample of Mattes’ PHP code in the explorer repository it is easy to see some of the practises in development of the 42.cx AI-Analysts repository he open sourced in the summer of 2022. We wouldn’t store a dime on these.
Another pattern that indicates that Dynex is a Daniel Mattes venture is the use of the office@ email address. Mattes’ previous 42.cx and Q.Solutions ventures have also used the office@ address for general inquiries:
This could be a coincidence, but it is not often that you see an address like office@dynexcoin.org being used by companies in Austria or elsewhere.
But why do such an elaborate crypto scam?
Ultimately what is most strange about the Dynexcoin debacle and Mattes is why go through all this trouble to fake something? Why is it so imperative to keep the identity of the team hidden? Why block anyone asking around about Daniel Mattes and his evident involvement.
To us it seems more likely that Mattes is from an old world. Today you don’t need to do any real work to make money off scams. Just create a meme token (danielcoin?) and pump the living daylights out of that thing.
It is almost as this person has no idea how the internet works. Maybe D is used to working in the “boomerverse” where his jargon goes through and impresses rich old people wanting to make even more money. In the cryptoindustry the scene is very different. Bullshit is easier to disprove.
Maybe we are wrong and he will reveal a groundbreaking technology that will change the world. But this person’s character, proved past in financial deception and his background in failing to provide results to back his words make us weary on the legitimacy of the Dynex project. This is why we think the Dynex project is a scam from Daniel Mattes.
Do you think Daniel Mattes has the pedigree to create something world changing? Or is Dynex just a white collar conman trying to rip off cryptocurrency enthusiasts? What do you think? Let us know:
- On Reddit: Why we believe the Dynex cryptocurrency is a scam
- On Bitcointalk.org: Dynex [DNX] | New POW World‘s First Decentralised Neuromorphic Supercomputing Platform
PS: As long as this public discussion is anonymous from the Dynex side, it will be anonymous at Ares Austria as well.
