Popular DApp based on Ethereum marked as a fraudulent crypto ponzi program

333 ETH, a widespread decentralized application (DApp) developed on the Ethereum blockchain, has been identified as a Ponzi-type scam. StateOfTheDApps warned that the so-called "ETH distribution project" promised its investors a return of "3.33% per day" as long as other people would continue to invest in the project.

The warning noted that:

Given the ponzi nature and the problems of implementation of the contract, this can only be negative. Pay attention!

"Guaranteed payments for life"

As other similar scams have promised, the developers of the debatable "333 ETH" DApp claim that investors can be assured of the "security of [their] contributions and lifetime payments guaranteed by the Ethereum blockchain.

Other indicators include the DApp designed using a smart contract based algorithm with the property exemption feature. This means that the contract code will not only be executed autonomously, but also that no one, including its authors, will be able to access or modify it.

Before being identified as a potential scam, the 333 ETH application was ranked among the best Ethereum-based DApps, with more than 1,500 users daily, just behind CryptoKitties. The ETH 333 website explains that users who invest the Ethereum native token, Ether (ETH), will have to pay an 11% fee for marketing services from the DApp provider.

ETH 333 "Business Model"

This amount will automatically be deducted from their original Ether deposit, according to the questionable website. In addition, 3% of funds invested by users will go to "technical support", 2% to "payroll" and 1% to "transfer fees of daily investor payments".

Next, the 333 ETH website states that all investors will receive guaranteed payments of 3.33% every 24 hours on 83% of their investment (after deducting the total of 17% of the fees mentioned). Similarly, along with the promotion of other fraudulent Ponzi schemes, the website indicates that daily profits will be considerably larger if the user invests larger amounts.

333 The ETH developers say that currently 1,602 people have contributed to their "profitable" fund. A total of 2,354.62 ETHs have been deposited to date, an amount estimated at more than $ 510,000, according to the creators of smart contract based on the blockchain.

"DApps Are Ponzi Schemes"

In particular, these types of fraudulent schemes have been increasingly associated with cryptocurrencies. As covered, the famous economist Nouriel Roubini strongly criticized the digital assets while affirming that "the DApp are ponzi systems".

The new EOS blockchain, which also allows users to develop DApps on its platform, has already seen a number of new apps elicit negative feedback. As noted on CryptoGlobe, developers of the EOS-based Trybe application mistakenly distributed additional digital tokens to more than 100 user accounts. Instead of going through the appropriate payment recovery methods, Trybe developers accessed the users' wallets themselves to recover the accidentally stopped tokens.