Is Davorcoin a Ponzi Scam?

in cryptocurrency •  2 years ago 

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Davorcoin (DAV) is a cryptocurrency that's supposedly backed by bankers and traders from major European financial institutions. This coin stands out to the crypto world as it serves as an arbitrage lending platform. Unfortunately, some parts of their website are vague and leave you with nothing but the hopeful promises of 1.5% to 25% in daily returns. With that said, here's what we know about Davorcoin, Why Davorcoin Looks Like a Ponzi Scheme You get paid a percentage each day on the amount you stake. The numbers promised are high enough that its only sustainable if the platform continues to grow. Without fresh staking on a continual basis, eventually the returns will fall flat and you could very well see a ponzi-like collapse. Its easy to compare Davorcoin to Bitconnect (BCC), which recently collapsed and burned countless investors. That ponzi scheme could be seen a mile away and many members of the crypto community warned newcomers to stay far away. The same mentality was issued when the Davorcoin ICO (initial coin offering) was made public.

Davorcoin Creates Another Bitconnect Situation
Everything seems great at the start because no one can cash out The soonest you can get your capital back is after 89 days, and that's on an investment of $25,001 or more The smallest investors, depositing between $100 and $1,000, will need to wait 299 days to have their investment returned. Until then, you can only watch your interest accumulate at the daily variation rate -- plus a little extra if you invest $1,001 or more. Bitconnect investors jumped in when Bitcoin prices were much lower than they are today. The price of Bitconnect went up 100's of times in value within just a years time As the value kept going up, the freeze period came to an end for the early investors. They were rewarded the most, and as they withdrew the liquidity decreased and the value of their coin crashed in a downward spiral. It created a race to the front door, with everyone trying to get out -- and those that kept re-investing found themselves extremely burnt. The same thing is essentially going to play out with Davorcoin.

Should You Invest in Davorcoin?
It's not a great idea. The initial investors will likely see a nice return for their risk. If you didn't get in on the initial coin offering, you are essentially betting on the marketing strength behind the coin. If new investors don't keep coming, the high daily returns will not be sustained for long. If no one ever invests again, as the early investors cash out, nothing will be left to return to you on what you invest right now. While the returns sound great, the risk is far greater - be careful, and as always, never invest more than you can afford to lose. Maybe play with $100 or so if you actually want to try them out -- but do this for the experience of seeing how these investment platforms really work.

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To the question in your title, my Magic 8-Ball says:

It is certain

Thank u for sharing the tip and advise, i was really considering to hump on Davor coin and so some investments with them, but as u said its like too good to be true and as u said im not sure they can't hold on to their promise. What your thoughts on USI-Tech?

Kudos

I have invested in this. There is a strategy that could be used to get the initial investment back quicker. Say for example you invest $100, if the payouts average 1% or approx $1 a day you could convert interest daily or weekly to DAV coin then instead of transferring out Bitcoin transfer out DAV to Coinexchange.io

If DavorCoin is around for 3 months or beyond you should recoup the initial investment and then afterwards you will be playing with house money

The reason I invested was I am planning on buying altcoins weekly with some\all of the interest so if things do go pear shaped then hopefully the altcoins value will rise in due course and make up for it. If DavorCoin is around for 90-100 days from my initial lend I will turn a profit

There is one other point of interest - When BitConnect crashed the BitConnect coin slumped to approx $25 so if DavorCoin reaches a similar standing even if the platform crashed you may end up recouping a proportion of your initial investment so that may bring down the amount of days further

Davor has recently added the option to break a lend and release your investment at any point. So if you decide (for what ever reason) you don't want to hold out to the end of your lend you don't have to. There is a processing fee and you have to reimburse your first months interest earned and half of your second months. This could be part of the potential SCAM or it could be an indicator that Davor is trying to do things legitimately and may be an indicator that Davor is not just Bitconnect 2.0. Read more on this BLOG: https://davorcoin.academy/davor-io-announces-release-lend-function/