Dividend Yield Drops 90% Overnight, the Hottest Blockchain-Based Short Video Platform Is A Pyramid Scheme?
A short video platform called Fire Bull is gaining popularity in China as it jumps on the blockchain bandwagon , but meanwhile suspicion has been raised that the project is a crypto scam.
According to Fire Bull’s website, it is a blockchain-based smart video community.Its white paper says FB is the utility token in the Fire Bull ecosystem with a total supply of 10 billion, and the token will be generated when the the video uploaded on the platform obtain other people’s attention or reward. Users can earn FB tokens by uploading, tipping and sharing videos.
The short video application, created in late June,has attracted over 10 million users within 2 months due to its unique mining model known as “tip mining” and high returns to FB holders.
The start up’s website shows that its CEO Jing Feng is a PhD in artificial intelligence from Tsinghua University.Wang Wei, founder of Chinese online video site Tudou, is among advisers for the project.
Users are able to exchange RMB for FB token on the platform, and will be rewarded by dividends.Every 100 FB tokens can earn 1 yuan cash reward starting from September 21. What’s the craziest thing is that investor could recoup their investments in only three days.
Therefore,high returns and an extremely short payback period draw a plethora of irrational funds from retail investors.
But money doesn’t grow on trees. The payback ratio decreased by 90% on September 23th. This ration fell by 90% again on September 24th. What’s more disturbing is the fact that the project’s white paper is changed ,deleting the information about team members and advisers.
A user told the local news outlet Lanjing Financial that when he added CNY 600 to the platform, he could receive a cashback of 300 yuan per day initially, but since the rule has changed, his daily cash reward falls to 0.5 yuan today.
When it comes to the dramatic drop in the payback ration, Jing responded on his Weibo that the existing amount of capital cannot afford the 10-day operation of the company, and they scramble to recoup funds.
So far , FB has no digital asset wallet and has not been listed in any crypto exchange.
Fire Bull said on September 23th FB token is not an ERC20 token based on the Ethereum blockchain,and is just the platform credits. It added that Fire Bull is an entertainment app rather than an investment platform, and it never promised return on investment (ROI) and payback period. But a large number of investors who lost their hard earned money has created rights protection groups trying to get their money back.