DeFi, Cryptocurrencies, RugPulls & Indian Pariah

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Cryptocurrencies & DeFi have gone from a curiosity to a viable investment, making them almost impossible to ignore. The principle behind cryptocurrency is to create a peer-to-peer network that doesn’t require an intermediary to transact between two users. 2021 saw exponential growth for DeFi, with more than $110B total value locked in November 2021, while at this day7, TVL is around $57.81B.

(Data from DeFi Pulse, May 13th, 2022)

DeFi brings various advantages over centralized finance (CeFi) as it’s open-source, anyone can contribute, trustless transactions and access are permissionless.

However, we still know the faces behind the hugely popular protocols mentioned above, with advantages and disadvantages. A benefit, for example, is that it’s possible to research the team’s experience. However, a massive burden behind knowing the group is the risk of targeted attacks.

Can an anonymous team be trusted in 2022?

Where DeFi saw growth, scammers saw an opportunity. Unfortunately, we’ve seen plenty of DeFi (and cryptocurrency) projects in 2020–2022 with anonymous teams who raised money and wholly disappeared after doing so, leaving the contributors with nothing but dust.

However, it’s entirely possible to prevent becoming victims of these scams. Realistically, there is no need to trust a team if you can verify all of their work. DeFi platforms are open-source, and therefore, it’s possible to do full due diligence on smart contracts to ensure there are no red flags.

In 2021 $2.8 of the $7.7 billion lost to theft was because of rug pulls or exit scams, as the weak regulatory framework allows anyone to set up a crypto project. Exit scams where project founders make off with the investor money without offering any returns rose by 36 per cent year-on-year and show no signs of slowing.

A project with an anonymous team boasts one significant advantage. It makes you focus on the product and ecosystem rather than leaning on the group’s reputation. The process empowers the project to stand independently, even if a team were to step away from the project. It offers the ability of complete decentralization, with fewer potential ways of shutting it down.

Indian Pariah — Project with Pseudonymous Founders

The Indian Pariah team decided to remain pseudonymous [The names or descriptors different from an individual’s actual name] because they wanted to build a fully decentralized project. Thus, enabling their token holders and community members to decide the future of the platform they’re making through Decentralized Autonomous Organization proposals.

Indian Pariah recently launched its whitepaper v1.0, which explains the project objectives, roadmap, products and various things about the project. The DeFi product will power its users with decentralized finance tentacles to aggregate thousands of DeFi opportunities.

It empowers them to invest in DeFi from a platform they own, without exposure to the typical token dilution synonymous with venture capital (VC) backed projects. The team wants to assist their community members in researching these aggregated opportunities competently by providing them with the required tools on their all-in-one community platform.

For example, their roadmap (work in progress) includes important objectives to look at, immediate red flags, and handy links. We would recommend adopting a process involving a simple checklist such as theirs, not only for projects powered by anonymous teams but also for any project you’re researching.

DeFi offers clear advantages over CeFi. There are advantages and disadvantages to both non-anonymous and anonymous teams. But it’s up to the community to further explore all the additional benefits and features DeFi is poised to deliver. Ultimately, what’s important is the product, the smart contracts, and overall ease of use.