Aztech A New L2 ETH Scam

about 2 years ago

In today's edition of YIYL, (You Invest, You Lose) we take a look at the L2 scam thesis. In bitcoin we have a concept of layer two solutions, the Liquid Network and Lightning Network are two working examples, in both cases you peg bitcoin into these alternative networks and you can use them as you see fit.

The bitcoin in those networks then inherits the properties of that network, such as greater speeds, lower transaction fees, and confidential transactions.

In shitcoins however, the idea behind layer two is simply creating a fork of another chain slapping a new token on it, and having a compromisable smart contract bridge between them. We've already seen this scam play out with Polygon and Optimism which has done pretty much fuckall to help offset transaction costs on Ethereum but has done a lot of the VCs who minted these shitcoin forks and dumped it on retail.

Repeating success

Seeing the success of this scam, we've seen a few more so-called L2s pop up like Loopring and Arbitrum, I find it so funny that even though these so-called Layer 2's are meant to offset ETH, most of ETH offsetting happens on BNB, so wtf are you actually doing?

Anyway, success is not focusing on how well the tech works, it's focusing on how many tokens can I create for nothing and sell at a mark up to brain-dead defi bros looking to gamble.

All you need to do is fork ETH, call it a Zk roll up or optimistic roll up, have a centralised oracle and smart contract or custodian to peg in assets, and then get your native token listed on ETH market makers and exchanges and dump like it's going out of style.

Aztech is a repeat of the playbook

Once the hype on one L2 dies, you simply back a team with a rebranded fork and lack of distribution and repeat the process once again.

A process that's already in the works with the private layer-2 chain Aztec Network, announced on Dec. 15 a $100 million Series B funding round led by venture capital firm a16z crypto. Other investors in the round include A Capital, King River, Variant, SV Angel, Hash Key, Fenbushu and AVG.

By partnering with a16z, the company plans to hire new engineers and build a "next-generation encrypted architecture" that allows users to verify that blockchain rules were followed without revealing any underlying information. Encrypted blockchains allow users to transact with privacy and anonymity.

So that's the pitch, the budget, however, will go into listing the coin on different exchanges and paying podcasters, shills and doing some sponsor deals and PR pieces to get the name out there so that Aztec premine owners can dump their basically risk-free tokens on the oh-so moist mouth of the general public.

Complexity theatre continues

The grift that is Ethereum is all about selling users on new features that might come in the future or that this token is part of the next buidling block of Ethereum. It's basically like selling people coke and once they hooked but they don't have enough money you like well Kat and Meth are cheaper just use that instead you'll get the same high and the poorer junkies will jump on it.

The so-called "Ethereum" network of disjointed projects that could run one without the other continues to grow but the cannibalisation of all these token projects eats into the liquidity and all these shitcoins now have to fight for the allocation of the dumb dumbs.

The idea is that if I spin up a token, and I can spend $1 on marketing to make $10 to $100 per dollar I spent, and leave the public with the bags, why not?

They clearly don't know how to manage their own money so give it to the rich guy instead.

I am calling it here already, but I look forward to the new cohort of Aztech shills that will be coming soon over the next few months and will eventually turn into bag holders like those who backed other destined to fail so-called L2 Projects.

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