Buyer Beware: Red Flags on the Red Pulse ICO
*UPDATE: Since the writing of this article the Red Pulse ICO has been postponed indefinitely in response to China's recent crackdown on ICO's...or maybe because of this article ;)
Caveat emptor: The only other saying besides "carpe diem" from my high school Latin class that I remember. Google defines it as "the principle that the buyer alone is responsible for checking the quality and suitability of goods before a purchase is made."
The crypto world has a related, and much more succinct saying: DYOR (do your own research) and while I agree that anyone walking these ruthless, zero-sum streets is entirely responsible for their investments; I wouldn't be The Cryptohomie (or even a cryptohomie) if I didn't do my part to warn about potential snakes in the grass. Today, I think I've found something slithering!
Some of y'all are foolishly throwing cash at whatever flavor-of-the-week coin the hypebeasts on forums are screaming about. This isn't for you....by all means, keep making it rain on scam coins so the rest of us can come up! This is for those who are earnestly trying to do their due diligence before investing their hard-earned dough. There is so much misinformation, FUD (fear, uncertainty, doubt) and self-serving deception in this game that it can be almost impossible to sift through the BS. Cryptohustlin' ain't easy, but I got your back.
K, done with the intro, now for the goods:
Last week I came across the "Red Pulse" ICO. I've been looking for a strong ICO to get behind as I'm sure many of you have. Among the most important things in judging the viability of a coin are the (1) idea behind the coin (does it really solve a real issue not covered by another coin? ), and (2) the team.
FACT: The majority of coins WILL fail and many are simply money grabs. Even worse, some ICO's take your money and never release tokens. With regard to Red Pulse, at least on the surface, everything seemed golden.
Why I initially wanted in:
According to their site, Red Pulse is a Chinese market research company that's been around since 2015. They claim to have 60,000+ professionals signed up so far.
Their service sifts through all the fake and irrelevant business news floating around in China to bring their users concise, pertinent, and accurate market information. I liked this because it shows that they already have a working platform and users, giving me confidence that they would follow through with the coin.
Allegedly, they currently pay their researchers in renminbi (the Chinese currency) and the plan is to pay them in RPX (the name of their coin). This seemed to me like a really weak/small use-case but given that China is home to like 1.5 BILLION people and that everything else looked impressive, I initially didn't let it bother me.
Their team is comprised of people who have worked for great companies and graduated from great schools. Their CEO has been quoted in the Wall St. Journal and some other great business publications. He's also been a guest analyst on what seems to be a reputable Chinese news show.
*They claim (more on this later) that Da HongFei (NEO co-founder) is one of their company advisors.
They list Binance as one of their partners and tweeted that RPX would be available on Binance soon after the ICO's completion.
-Their website looks professional, they have a roadmap, projected use of funds, token distribution chart, and the content is well-written.
What now sketches me out:
- According to the App Store the Red Pulse app was created in 2012; Red Pulse claims to have started in 2015. The app only has one (suspicious) review. There are not enough ratings for the App Store to provide an average rating. If this has been around for that long and 60,000 + subscribers are signed up with Red Pulse, why aren't there more ratings and reviews?
The app opens to a login screen with no "register" or "create account" option. Registration on their main site is "invite only" making it difficult, if not impossible, to judge the quality of their service and also calls into question how many active users there actually are. Getting a feel for how many people are already using it and how much content their researchers create is important, remember, their primary use-case is paying their researchers...if there are only 5 researchers, that doesn't exactly scream demand for RPX.
The vast majority of their tweets have no engagement. Of the ones that do, they tend to be from the same 2-3 people.
They have 4,500 followers on Twitter, a quick scan of their followers reveals that most are crypto traders and not the touted "finance professionals" that supposedly use the service. Hardly what you'd expect from a company with a solid service and 60,000 users (even if China doesn't allow Twitter).
On one of the TV news interviews listed on their token sale site, their CEO says "the reason why the token could appreciate is because...when people find a token...to be of value and other people around them start to believe that there's value to it, it all of a sudden begins to have real value." HOLD UP?! Let's unpack that for a second, THE FREAKING CEO is saying that the reason the token could appreciate in value is because people may believe it is valuable??? He essentially concedes that the token has no "real value"...yikes! Granted, speculation is the name of the game, you gotta give a better reason for why the damn thing will go up in value.
I can find no evidence that the Red Pulse service has any meaningful subscriber base in China.
In their roadmap they plan to hire blockchain developers in Q4 of this year, i.e., if you ever see a coin it's likely going to be a loooong wait. At time of writing Binance has not responded my inquiry regarding an alleged partnership with RPX or any plans to accept the coin on its exchange in the future.
Neither Da HongFei (NEO co-founder who they list as a company advisor) nor any of the official NEO accounts follow Red Pulse on Twitter, and have never tweeted about Red Pulse. Both HongFei and NEO have, however, encouraged their followers to buy into Agrello's token sale, who they confirm partnership with. Why would they tweet support for Agrello and not RPX which will be the first NEO ICO? At time of writing neither Da HongFei, or anyone from NEO has responded to my inquiries regarding alleged partnership with RPX.
Long story, s̷h̷o̷r̷t̷ long...it seems that Red Pulse is looking to have a payday at our expense. On top of the fact that there really is no unique or relevant purpose for the RPX coin, much of its seemingly enticing aspects turn out to be fool's gold if you look hard enough. Bummer, because I was really hyped for this one.
I'd suggest saving your money for a better opportunity as this has the look of a carefully-orchestrated crypto heist. I could be wrong but, at very least, the misleading nature of their claims should give cause for concern.
The good news is, if you did register, you have some NEO which has been called the "Chinese Ethereum" and has the potential for some great long term value! As of this writing, NEO is pretty cheap but you can probably expect the value to increase just before the RPX ICO registration deadline (9/7/17) as last second participants will likely be buying NEO in order to participate in the ICO (cough...buy low...cough...sell high...buy low...HODL). Lastly, in the event RPX ever does hit an exchange, I don't doubt the immediate hype (and pump) will boost the initial value.
What do you think of my assessment? Let me know in the comments!
Are there any ICO's that you're hyped for? Why? Please share with any communities your involved in that are thinking about Red Pulse!