Age of Scams: ICO Investor’s Plight
Early crypto investors would pride themselves on solid market savviness, and this false confidence led many to serious financial losses. To offer a recent example, just this year a crypto startup LoopX performed a textbook exit scam, disappearing immediately after ICO with $4.5 mln of investor capital. With time it became increasingly obvious to investors that browsing through the list of ICOs on crypto forums or dedicated listing sites alone would never let them tell a scam from a decent project.
For a while the crypto community was seeking out a way to introduce more safety and certainty into the ICO model without regulating the market and resorting to involvement with the state and traditional financial institutions. An unexpected solution to this conundrum appeared in the form of aggregated prediction markets, online platforms that use the wisdom of the crowd to speculate on the outcomes of future events and be incentivized by the results. Prediction markets are essentially platforms where people bet on future events.
But prediction markets are more reliable than, say, polls, if only because forecasters put their money on the line as they make predictions. While Augur and Gnosis focus almost exclusively on predictions, Wings has built an infrastructure for fostering a new generation of crypto projects not only through incentivizing forecasters to make predictions but also providing a platform for crowd-sourced product improvement and for running safe and transparent project funding. Forecaster groups make a living by identifying scams and stillborn projects thus it is not unreasonable to monitor prediction markets and factor crowd wisdom in when making important investment decisions.
