In the crypto space, rugpulls are not so uncommon, we hear people investing in projects and get rugged. It can be of small amount or very large amount similar to the case of CryptoZoo which most of us have heard through the investigative journalism of Youtuber Coffeezilla. I have heard of stories of rugpulls of different projects in other chains and never thought i would be in a postion to write something on this until now. This is basically a recollection of the events thats happened towards Chifibots rugpull from the point of view of someone who has participated in their presale.
@nftstudios has posted the announcement of Presale of their game Chifibots. The game was going to be devloped in Aspire blockchain but the presale was done in HIVE since all the founders were OG's from Steem era. The below is a snippet from thier presale post.
At the time of Presale, team behind NFT studios was IJ Maha @steemcafe (Founder), Dave Christopher @daveonarrival (Co-Founder), Kevin Li @kevinli (Game Developer) and Florian @flauwy (Communications Director) along with their partners Michael Terpin(Aspire Cofounder) and Jim Blasko(Aspire Founder and CEO). I remember the team mentioning one of the main reason Aspire blockchain was preffered by the team because of low gas fees and the relationship with Michael Terpin and Jim Blasko.
Source - Page 186-187
i am providing some of their initial posts which was published outside. I have also attached a podcast in which Michael Terpin talking about NFT studios and Chifibots (Time stamp:06.51 - 07.50) and also mentioned on seed funding for the project.
https://www.edgeofnft.com/podcasts/crypto-nft-from-og-to-avant-garde-with-michael-terpin-of-transform-group-aspire-plus-space-jam-nft-twitter-nft-group-notables-partners-with-caa-uta-wme-more
https://innovationsoftheworld.com/nft-studios-chifibots-creating-a-universe-for-endless-fun/
https://peakd.com/hive-102223/@nftstudios/chifibots-pre-sale-a-play2earn-robot-trading-card-game-by-nft-studios
Chifibots secured a funding of more than 100K from HIVE presale, the three highest investors contributed to the presale with $50K, $10K and $6K. Chifibots had their first AMA introducing IJ as the Founder and CEO, Dave as COO, Kevin as Game Developer and Flauwy as a Content creator. Video of the meeting below.
A second funding was organized in Indiegogo which was kind of a fail and was only able to collect $2k from the $25000 goal.
@flauwy stepped down from his position a few months later and an announcement was made about him moving out of the project.
In the discord, Kevin was running the show and we didn't hear anything from other founders other than an occasional hello. one fine day we did get to the result of what the team had been working till now.
People did get a chance to try it out and as you would have seen in the video, it was an underwhelming experience and people did let Kevin know of what they thought and he mentioned the game had to start somewhere. The team was traveling a lot visiting different Blockchain Conventions and one fine day we did get this amazing video message from them.
Soon after we heard from the team that Aspire was not working out and they are looking for a new blockchain to develop. The community was not happy with this and did question the team on why Aspire did not work out and we got some response in the line of the Smart contracts were taking too much time to develop in Aspire and it would heavily delay the release of chifibots. Jim Blasko is the CEO of Aspire and we did hear about some funding from Aspire to develop the project in Chifibots AMA . When we look at the Indiegogo funding page, we can see an interesting comment from a user.
If we read between the lines, we can figure out what would have happened.
Community was really pushing the Team to develop in HIVE,but funding seemed to be the most important aspect the team was looking to. It really questions what happened to more than $100K funding which was procured during the HIVE Presale. When this was questioned, there was a standard response of how costly it is to make a game.
Chifibots team has applied for grants in different blockchain communities and finally Stacks was chosen as the blockchain where the game would be developed. They received a grant of $30K from Stacks.
Kevin left the team and the reason was mentioned as the work timing and an year of working on this without a salary. We do not know if this is the real reason. The only remaining team was IJ and Dave and they hired someone to work on the backend contracts for Stacks Marketplace.
Community finally hoped the game was on track and the team announced the Day one card packs and asked the presale participants for their stacks wallet. Then there was a lot of delay and finally people who purchased Day one cards got it in their card inventory. But what is the use of Cards if nothing else is developed. We again got communication from the team that the Stacks Grant Fund was also depleted and they have asked fund from another stacks accelerator program which would take time. They were also pitching to VCs for Funding which didn't really make sense when there was no development to show.
Discord became a graveyard and people who has invested was getting frustrated and started asking questions,there was complete radio silence from the team. @Spiritsurge offered to build a MVP for them which they could show to VCs to secure funding if required. Also if they are not planning to build, they were advised to share the IP and Spiritsurge would develop the game for the community. Even without having the conversation, they removed Spiritsurge from the discord but they didnt bother to communicate anything to the community. The discord was deleted a few days later and there by rugging investors of the money.
Highlight of this is even after getting a minimum funding of more than 130K, there was nothing to show. When we were discussing with the community and discussing with different people they worked with we could only account for the below expenses.
- Developer fee for backend for Market place - $8K
- Developer fee (Part time - 3K/month for 6 months) - $18K
- Travel expenses for blockchain conventions/others - $15K
- Art (Hive artist/Fiverr) - $5K (estimated)
- Payment to Team members - ??
with all these expenses accounted, it still covers only 35% of the 130K fund they received. We are unsure where the rest of the money went.
Primary analysis of the wallets show the team invested money in defi-projects like Polycub etc. This was done at the height of bull run, we can take a guess of what would have been the result.
If you are someone who put money into Chifibots like me, everything is not lost. There is a specific channel in Astral Revelations discord -https://discord.com/channels/992009256003965019/1102070487863001130 where you can talk with other investors and provides an opportunity to discuss on how to approach this situation as a community. @spiritsurge is building a TCG game for the community for who got rugpulled by Chifibots. He talked about the vision, showed some card designs and when the launch can be expected during the weekly Meeting in the PIMP discord last week. He has also onboared a new unity developer who will be working on the new TCG ( he was also an investor in chifibots). If you are some one who has lost money in this rugpull or interested in knowing more, join the Astral revelations discord link above.
Astral revelations team, who is working on the new TCG is 100% beneficiary of this post's payout. Please reblog and share.
There were many reasons why I left the team a year ago, partly because I felt that not enough money was spent on actual developement. This whole thing turned out to be a mess. I try to look forward and support Spiritsurge with his game project and other ways to help the investors.
I will write a more detailed post about this matter soon.
You have been very helpful flauwy, your insights on the wallet address has helped a lot to piece together how the fund was handled. Looking forward to your post.
Nice move Flauwy to step out and say your side. Hope you doing good :)
I don't get how you get $100k + from a blockchain and then abandon it. What a shit show seriously. Not only that but the money made from blog posts updates was rather large. Talk about a group of people that need a block from the community this would be one of them.
Probably a scam since beginning. will not be suprised, IJ actually abandoned a lot of projects in the past... It looks like his hobby and have in mind that I meet them in person at SteemFest3 in 2018 so they are not only "internet avatars" for me :)
I remember when this whole chifibots process was launched and how oneup was huge, I was trying to invest a little in this game, taking advantage of the great hype around oneup, thanks to God and my suspicious way of everything, I didn't invest anything in it and today I see that it was a great decision.
Your gut saved you from a loss.
I dont believe it was a rug from the start but mismanagement of funds and greed has led to this.
Big projects need a big administration, if you don't have that, the end will always be the same "hole", so it's best to always go with the possible caution.
Maybe he shouldn't have published his data directly...
https://who.is/whois/nftstudios.online
lol, so much information there..
Thanks for this, I know who I will call every day at various times to annoy them...
What a rookie mistake.
Stop buying promises, people.
0 lessons learned, xD
Does not compute.
I was using a reference, it wasn't directed at you. Apologies
I knew that. lol. Chill. It's all good.
I thought you said my comment doesn't make sense. :)
For those consistently getting ripped off after buying promises, no lessons are learned because it does not compute.
Once people notice things aren't adding up, which could take another five years at this rate, then maybe they'll stop buying promises, and go back to buying products, like people did for centuries.
By the looks of it here, those selling a promise used some of the money to buy another promise.
If one lights a match then touches the flame to another match, it doesn't explode and turn into a new box of matches. But hey, let's keep trying.
I "only" invested 100 Dollars, but this was the biggest fail of the last year. And it´s such a no go to handle projects like this. It´s really annoying...
The "biggest fail" for me was BangDefence. I think quite a few of us in the !PIZZA community got dragged into that under the impression it was developed by HashKings.
Even if they've promised to come up with a new game to make up for Bang's initial buyers, it just means an even longer wait for that amount of $$$ put in for which nothing might even come out of it.
Lesson learnt.
Ohh. I invested a little in Bang Defense too but thought it was just not done yet. -.-
What exactly happened to it?
the sheer volume of funds and support they got from the hive community is insane. Regardless of the amount, people deserve to be treated better than this.
I'm sorry you lost the $100! That really sucks 🙁
It is! Other projects would be happy if they had a quarter of these funds and support. It´s so disrespectful to treat people like this...
Thank you! Yes it does suck, as 100 Dollars is still alot for me. But well, I learned from it...
I don't even want to think how far $200k could go to Hivians....But like you said, we learn and try to find new ways to bring value to the system (:
!PIZZA
"But what is the use of Cards if nothing else is developed."
This is to me the sentence that calls out most to me. There are a lot of projects in crypto that develop marketplaces but are unable to make fun games.
If you are getting into a game for "fun" purposes or "investment" purposes, I would encourage you to follow the following tips:
In the end, the only person to be blamed after a rug is yourself because losing money can always be avoided.
Also, I am against regulation in this space, so don't call out on it. Be smart, and invest in teams and progress. Avoid ideas-based entities with minimal execution.
I have assisted with tracking all the wallets and unfortunately, I am seeing a lot of transfers to unknown wallets, but I can confirm that all of them have ended up in CEX.
100%, i am responsible for how i handle my finances, learn from this and move on is the only thing which can be done now.
I never noticed this project, but the name Michael Terpin would have turned me off instantly. He shilled dozens of shitcoin ICOs that never did anything except enrich the founders and investors. Calls himself the godfather of crypto, just because he was an early investor and PR agent. Such a slimy bullshit artist. Of course he has a Bored Ape avatar on Twitter now.
Hey anandkj611, greatly researched, it saddens me it turned out like this as I feel I let down the community.
Your main reason for me leaving was correct, the 2am-4am meetings destroyed me physically and caused a lot of mental breakdowns. There were also some things we were unlucky with, going from bull to bear market, and catching the tail end of the play to earn movement before the general public trashed p2e games moving forward.
I started out creating the characters and storyline, which is what I'm good at. Then it slowly moved to gameplay mechanics, then investor meetings, then a whole lot of other tasks I had not been trained in or knew about.
Before leaving, they were on an accelerator program on Stacks and they just hired a smart contract dev. Not too sure why they didn't use my final designs or didn't chat to the community often, but still sad the way it was handled near the end.
If people remember on the discord, there were regular updates when I was there about our process, but I think ultimately none of the core team members not being a dev, hindered the progress a lot.
Thank you so much for believing in the project, I cannot speak for the others, but for myself, I'm deeply sorry of this outcome, but glad others are stepping in to create a derivative.
Have a good day!
Your contribution towards cost breakdown will be even more appreciated along with wallet transfer information. I have already asked Flauwy to talk to you and bring you to the discord but he mentioned you were disturbed by this whole event. I will once again invite you to the discord so we can move towards providing closure to the investors who have lost money.
It is the right thing to do.
Well said and a reasonable ask.
!pizza
Yo Kevin. So you basically saying that they used you to do marketing of the project, they haven't done nothing in that matter, you not get pay for that and then stuff start to become worst?
Great breakddown… I obviously knew the risk of getting involved, but to completely abandon the community is what saddens me most. The fact that they keep moving from chain to chain is what really killed this with no leadership whatsoever. There was never a great game plan and it was severely underfunded from the get-go. I did everything In my power to negotiate a takeover or additional funding as a bridge loan but all attempts were grasping at straws. It really puts into perspective that you need to invest in teams, not necessarily projects. That's what matters nowadays.
Very well researched summary. I never invested in ChifiBots since it never clicked to me, my intuition was obviously correct. 😏
OneUp though was a token I bought a few in the beginning since the staking APR was three digit. One of my worst investments so far. -95% roughly. Well was not a furtune I put in still disappointing.
I just want to clarify that ONEUP and NFT Studios are different from each other. We were all founding members but Oneup was always my baby alone. Today, it is the Cartel who manages Oneup, who took over my founding share and the responsibility for the token after NFT Studios showed no interest in it whatsoever. The Cartel is now slowly trying to build things for ONEUP.
Your intuition helped you :)
This was at the height of the Bull run, many of our intuition was turned off. I heard the AMA once again today, IJ is really a Snake oil salesman.
This was a costly lesson for me but still a good lesson.
Thanks for the comment :)
Hindsight is 20 / 20. Someone did sell an axie plot for $2.5m.... people were spending crazy money back then - see this link about the axie land plot slae: https://decrypt.co/86875/grayscale-says-metaverse-1-trillion-opportunity-record-breaking-sale-axie-infinity
Idk what you can do to fix this but y'all try not to beat yourselves up too much. I have gotten dupped before, it happens and unfortunately this is a big one.
Projects should try to keep goals reasonable and operating costs low until they have some serious revenue to stand on.....Investor funds and revenue are not the same thing. Maybe the CEO knew that, maybe he didn't; hopefully time will tell and we can get more transparency,
I look forward to reading more about Astral Revaltions and seeing the value it can bring to Hive's ecosystem.
❤️,
Hurt
Let's just say financial management and game dev are 2 completely different things. After some failed projects, I have learnt to be a bit more wary of the "next big thing" as they always like to proclaim their new idea.
Totally agree Blitzzz. Unfortunately good accountants and analysts aren't cheap. If projects have no experience with cash management, they probably should seek out a peer and learn some best practices for basic accounting.
Also, I feel like if a project has this much community buy in and people working for free, disclosing how funds are used might be a good practice and could help prevent these things from happening.
This wasn't a hedge fund, it was supposed to be a relatively simple game.
Financial disclosure to people the company acknowledged as investors doesn't seem that crazy to me.
Sorry for the pain bro. Thanks for sharing your findings.
What I know is that Kevin and Flauwy are good people. Would love to know their side of the story on this. Can't say much about other team members you mentioned. This is a huge fuck up on their part.
That's why we said investing in new projects are always risky, so be careful do your own research before making any investment decisions or trust on any team
ReBlogged. Thanks for this summarised info.
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Wow, i forgot about this one, i do have one of their big packages.
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Sorry to hear that, were you part of Hive presale or indigogo presale. Spiritsurge is working on a new game for the community.
Please join the discord.
https://peakd.com/surgentgaming/@surgentgaming/ar-bots-a-futuristic-digital-trading-card-game-rebuilt-on-hive
Indiegogo
do join the discord, we had a list of all the hive sales but none of the Indiegogo ones.
Discord link?
https://discord.gg/6tFz9saGU2
Great overview on what happened, I'm also in the Surgent Gaming discord and read through the story. I'm very sorry for all involved, I just barely dodged that bullett! And it is just awesome what Spiritsurge is trying to make!
Awesome post and no !SLOTH till now, let me fix that :D
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Glad I sat this one out!
Definitely one of your better decision of 2022 :)
It is a risky venture to invest in this space sometimes. It will not be the first and not the last...
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Just read about this now. Did not know something like this happened on Hive. Do keep in mind that development on anything is not easy. Lots of research and scratch work needed before we get to automating stuff, and building the end product.