Trust certainly plays an important role in every organization and it plays an even more crucial one in any scam-prone industries.

It is clear that trust in cryptocurrency has become a critical issue.

For instance, .com (quoting Deutsche Bank (DE:)) ranked Bitcoin as the third-largest currency in the world, claiming that it’s too “important to be ignored.” Interestingly, Bitcoin is just one of the over 5,000 cryptocurrency assets available around the world, as reported by Statista.

Despite the rapid growth of the cryptocurrency market, scams have been rampant, especially in the initial coin offering (ICO) area.

While this trend has been evident for quite some time, Defense Launch, which is a blockchain-based platform, hopes to change things by leveraging trust and partnerships.

Rodrigo Lyra from Defense Launch spoke out to DailyCoin. He stated that their compliance team must double-check all projects before they can launch them on the platform. The goal is to make sure there are no scams.

Lyra said that the partnership is the first thing to do.

“We will have to be a partner with the developer or with the company that will try to launch with us,”
Lyra said, adding that there is a strict process to be followed by partners of Defense Launch.

Lyra answered that not every proposal could work and suggested strict guidelines for partners.

“About a year ago, my partners and I used to collectively participate in many early-stage crypto projects, so we were always on the lookout for new ICOs. To our dismay, scammers took advantage of even the most innovative initiatives, which included core ideas and competent evaluation teams. Regrettably, we invested more than $2 million and lost it all to scammers,”
Lyra shared.

Building a Scam-Free ICO Launch Platform

One of the essentials for a scam-free crypto ecosystem, according to Lyra, is trust, which is a two-way process involving both the company and potential partners.

Lyra stated that trust must be established by the company and partners. They must also be willing and able to trust each other in this process.

“Even in the short while we have been around, we get a lot of developers or companies trying to pay us to just release their ICO before it even scales to an exchange.

Of course, that’s not an option for us because we will not accept money to release any project. Our compliance team has told us that only promising projects are selected. We must choose those we believe in. This further implies that we must first, double-check the project, and if everything is okay, we become partners,”
Lyra noted.

Lyra stressed that trust in a project’s team and the entire project should be open to the public.

He then proceeded to mention that one of the first ways to identify a scam ICO launch is to see if the team is “fully doxxed.” By this, Lyra means that every member of the team behind a project must be published such that the general public can have access to information about them, and possibly have an idea of what they may be capable of.

“If you are watching an ICO go live, and everyone comes to talk about it in all the groups, Telegram groups, and you don’t even see who is behind the project – just go away,”
Lyra noted.

Treating crypto investments as anonymous according to Lyra is one major strategy employed by most scammers because at the end of the day, “they simply just rug-pull you and go away and no one knows who they were.”

Taking Custody of Project Funds

To address the majority of the scam issues, the Defense Launch protocol will be taking custody of the funds of every single product launched on the platform.

Lyra claims this will reduce the chance of ICO frauds as their partners are required to hold themselves accountable and stick to established goals.

“When we integrate an ICO project on our platform, we will have complete custody over any funds raised through the ICO. Each project will have its own wallet, and we will only release funds to the company or developer behind the project only if they fulfill the steps outlined in the whitepaper and roadmap,”
Lyra said.

Similarly, the FGO guarantee fund paid by the integrated partner on the ICO launch platform is another component of the Defense Launch project where trust is crucial, especially from the partners’ perspective.

The FGO guarantee fund requires partners to pay 2% of every single transaction done on the hosted platform into Defense Launch’s own blockchain.

The reserve fund serves as a safety net in the case of unforeseeable events. Although this arrangement can be beneficial to both the parties, trust is essential.

On The Flipside

• It might take time to trust a young startup that is very much at its pivotal stage for many crypto projects, especially the top players.
• Defense Launch has yet to issue its own ICO. This could slow down the adoption process.

Why you need to care.

Why you should care

Watch the full interview here:

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