Comdex drama - marketing, wash trading and more.
The last two weeks have been hard to watch for the Comdex community. The token itself has done ok, climbing up from recent lows around 20c up to around 33c. Recent days have seen it slip back a bit, but given the talk around the Cosmos I think it is unlikely to be the end of the slide. So lets dive in to what has been happening.
Image Source: Pixabay
Influencer marketing.
The first drama to surface, a bit over a week ago, was controversy over the marketing and ambassador program being run by Comdex. Ongoing shilling on twitter by various Cosmos "influencers" has been exposed. The main issue it seems is that partnerships were not disclosed and promotion work being done was not transparently acknowledged as sponsored content.
This issue became personal for me, as the Comdex team reacted to the drama by publishing a list of all their partnerships and crypto twitter influencers they have been reimbursing. My name appeared on the list.
Here is the link to the tweet and the screenshot:
There I am in the list of paid marketers.
For the record, and on a blockchain, I have not been paid ANYTHING by the Comdex team and should not be on this list. I have posted a number of times about the project, and I did apply to the ambassador's program when it first launched, but was not accepted into it. All content I have created has been my personal, unpaid opinions.
Having said all that, the team handled the situation ok, owned it and published its list of partnerships. Including people in my situation was an error.
Just when it looked like the dust would settle from that, a new drama, potentially much more damaging emerged.
Wash trading accusations.
On twitter, a report from Rarma which you can find in this tweet gained attention, and a lengthy twitter spaces discussed the issue in detail. I don't intend to rehash the whole issue, but here is a summary:
TLDR
Comdex is accused of using foundation funds to wash trade on Osmosis to boost the allocation of OSMO incentives flowing to CMDX pools, and using the activity generated to disguise selling of the team and/or foundation tokens.
Osmosis incentives are allocated based on a calculation of TVL and trading volume, and wash trading is frowned upon, considered unethical, and while technically not banned, certainly not supported.
It appears likely that Osmosis governance will be discussing the removal of all OSMO incentives from CMDX pools, along with other project facing similar accusations, like Asset Mantle.
The response from a cofounder of Comdex, Siddarth Patil can be seen in this tweet thread. Basically, the response is that the activities are market making (not wash trading) being performed by a contracted third party, and that selling some tokens is a necessary thing having not run a seed or investment round.
My thoughts:
Personally very disappointed at these revelations. I don't understand the argument for a "market maker" on an AMM Dex - that does not really "wash" (pun intended) with me personally. While there is not a constitution or rule expressly forbidding wash trading on Osmosis, it goes against community expectations.
I have started unstaking my tokens, which gives me three weeks to wait, and decide the path forward from here. I had high hopes for Comdex, and staked a significant portion of my remaining crypto into the project. Hopefully, the work the team has been doing is legitimate, and this shadiness around the edges isn't a sign that the project itself is overhyped vaporware.
A product launch sometime very soon, and something tangible would be nice.
No matter which way this pans out, it just feels to me like retail is just getting shit on once again.
The clock is ticking, 19 days till my tokens unstake. No doubt the price will have already tanked by then, and I'll have to decide what to do with tokens at their likely "all-time-low". Take an L and walk away, or HODL and hope for a turnaround.
Dammit.
Thanks for reading,
JK.
P.S. please do not take anything I post as financial advice or recommendations - my track record is pretty bad lately.
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