Beyond Wonderland: How We Plan to Stop Cryptocurrency Rug Pulls
At Arkius, we are transforming the decentralized finance (DeFi) space into an authentication layer for the value of goods, services, and information. How? By leveraging DeFi’s organizing principles — decentralization, collaboration, privacy, and real-time interactivity — to make it easier for the cryptocurrency community to authenticate shared data and content.
DeFi needs an internal cleanse
Even for sophisticated investors, the term “DeFi” may conjure images of the Wild West — a haven for scammers, money launderers, and organized crime, with fewer protections than your local lemonade stand. DeFi’s PR problem is largely due to recent headlines, such as the Wonderland scandal and the Squid Game rug pull. In each case, crypto token values rose and plummeted in minutes, falling to fractions of their pumped up value.
These scandals illustrate the power of information to shift cryptocurrency token value in seconds and inflict real-world harm on inexperienced investors. However, they also reflect the more expansive, systemic problem of how information is often shared in the DeFi community. Cryptocurrency scams, from bot-based fraud that uses robocalls to trick users into divulging their two-factor authentication codes to rug pulls (which saw investors lose $2.8 billion in 2021), thrive when independent information about new projects is scarce.
Amidst the bad actors and opaque liquidity pools, investors still have many opportunities to find real value. But unfortunately, finding verifiable information about those opportunities can be challenging, even for sophisticated investors.
Recently, Coinbase removed several links to cryptocurrency websites due to a warning from Reuters about potential rug pull activity. While the Coinbase community may have enjoyed a narrow escape, what about everyone else?
Creating an authentication layer for DeFi and crypto content
DeFi has the potential to identify, authenticate, and distribute billions in value. Our goal is to make the evolution of the DeFi space less risky for investors. At Arkius, we believe that DeFI’s reputation for volatility underscores the need for a platform-agnostic, single source of truth for DeFi and cryptocurrency investors. We think that the best way to mitigate the risks involved in DeFi investment and entrepreneurship is to establish a new way of authenticating the information shared in the DeFi community.
Regulation won’t fix DeFi’s trust issues
The DeFi space needs transformation, and we’re starting that evolution with our dApp. We created the Arkius dApp to empower our users to make informed choices. Our independent content filters and certification system were designed to promote trust in our shared content.
At Arkius, we know that crypto rug pulls don’t happen because DeFi is overrun with criminals. The industry has grown because of the creativity, commitment, and long-term vision of entrepreneurs and developers seeking to create an ecosystem around this new way of identifying, assessing, and transferring value. A relatively small group of bad actors get away with costly scams because investors don’t have the right information or the right technology tools to get at the truth (or filter out baseless hype).
However, we don’t believe that heavy-handed regulation will fix DeFi. In fact, it could hinder entrepreneurship. Our industry was built on trust — it’s at the heart of the decentralized nature of crypto and blockchain projects. Many of DeFi’s biggest success stories were based on the principle that the honor system can actually work for developers, entrepreneurs, and investors when innovation and good intentions come together. We don’t want trust to become irrelevant in DeFi; we just want it to be earned.
That’s why we created our dApp to serve as a clearinghouse that can authenticate project information for our community stakeholders. We want to make human values a part of the DeFi ecosystem, and we want that system to work for everyone.
Our dApp gives our Members the ability to view information exclusively from trustworthy sources. Community Members, called Casters, share content vetted by Certifiers. That means no more guesswork about project developers’ backgrounds or their access to liquidity pools. It means our Members are free to discover new crypto opportunities without worrying about hype-driven valuations or developers with checkered histories managing their funds. At Arkius, we’re excited about transforming the way DeFi works.
Our mission is to help investors, consumers, and crypto entrepreneurs create a global DeFi ecosystem driven by authentication, not blind trust. Join us!
