Proof of Trevon James, or PoTJ is an ERC-20 token launched a little over a week ago. It’s named after Trevon James, a cryptocurrency youtube influencer. Most people know him from his youtube channel which has over 120k subscribers, he is also a defendant in the Bitconnect class action lawsuit, which is still underway.
The Proof of Trevon James Tewken
The project was created by a friend of Trevon who goes by the name SpydrZero. After finding out about PoTJ, Trevon himself decided to join the project and promote it on his channels.
The smart contract is essentially a game where earlier participants capitalize on other users who buy, sell, or transfer the tokens. Trevon explains:
“When someone buys or sells Proof of Trevon James tewken, 20% of the buy at 25% of the sell price is split by the total number of coins and given as locked-in-rewards (priced in Ether)”.
At its core, the contract reward system is based on that of a pyramid scheme. By definition, a pyramid scheme is a form of investment in which earlier paying participant recruit new participants, with return being given to early investors using money contributed by newer players.
The difference between PoTJ and other pyramid schemes, is the fact that the creators of the contract are transparent with the reward system. Since anybody can view the contract, those looking to invest in PoTJ should be 100% aware of how the game works.
Another way to think of PoTJ is a sort of POS model where you receive rewards based on how much of the supply you hold. Trevon James currently holds 7% of the total supply of PoTJ tokens, if someone were to buy 8% of the current supply he would end up receiving higher rewards than Trevon. Furthermore, the supply of the coin changes as the market moves up or down.
When a user sells their PoTJ for ETH the coins get burned and the supply diminishes, when somebody buys PoTJ the supply increases. When a user transfers coins to another address, 10% that transfer get split to all the holders.
This reward system might seem confusing, so let me give you an example. If you were to buy into the contract with 1Eth and immediately sell it, you would get around 0.55Eth back. The reason for that is you lose 20% on the buy in, and 25% on the sell, ending up with around 55% of your initial ethereum. In other words, in order to break even the token price has to go up roughly 40% before you decide to sell it.
Additionally, there is a masternode system in place, which only activates once a user owns at least 50 tokens. It’s a pretty interesting concept in general. Considering that the contract holds almost $277,000 worth of Ether right now, it seems people are definitely buying into it. Currently, there is no exchange that trades the token, all buy and sells are conducted via the smart contract.
You can actually keep track of all the users and their balances. Mr Fahrenheit from the project’s discord created a script that downloads every single address which has ever interacted with the contract, and then queries the token balance for each one and ranks them.
PoTJ isn’t the first smart contract to offer pyramid style rewards in a transparent ethereum smart contract, Proof of Weak Hands (POWH) and EthPhoenix come to mind. When we wrote about POWH in January of this year the smart contract had over 2000 transactions and worth over $800,000. Currently, the contract is worth a whopping $30. Whether PoTJ will suffer a similar fate is up for debate, but one must be aware of the risks before investing.
The PoTJ website clearly states that this is an entertainment venture rather than an actual investment opportunity. There are no guarantees that anyone will make money from this scheme.
via The Merkle https://themerkle.com
May 9, 2018 at 11:12PM
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