- Introduction to DragonChain
- DRGN Token
- The Case Against DragonChain
- DragonChain’s First ICO – Look Lateral
- DragonChain’s 2nd ICO – lifeID
- DragonChain Is Incentivized to Spew Out ICO’s at a Rapid Pace
- DragonChain’s 3rd ICO – Metropolis Chain
- Joe Roets is a Busy Guy
- DragonChain Incubator Decision Process
Ok, first off, we are not calling DragonChain a scam at this time (although they could be, time will tell), but we will not label them as totally legit either. There are certainly some shady, reckless, or incompetent aspects to the way the company conducts their business, and we will point those out below.
The goal of this review is NOT to spread FUD (Fear, Uncertainty, Doubt), but to spread FACTS as we’ve seen them, to spread the truth, and to let you make an informed decision. This article is not about the price of DRGN, but the actions of DragonChain.
This article is not a scam, there is no conspiracy theory, we are not whales trying to manipulate prices, we are not a pump and dump group. We are DRGN investors and crytpo-enthusiasts and we feel let down by the DragonChain team. It’s as simple as that. Take off the tinfoil hat. Everyone in crypto thinks there’s some conspiracy or ulterior motive with everything they read related to a crypto. This is a research paper and our opinion.
Our opinion is that we have lost confidence in the DragonChain team at this time, we do not have any faith in the ICO’s they are currently launching, and therefore we do not trust their DRGN token as a solid crypto investment.
But don’t take our word for it, read on and form your own opinion.
Introduction to DragonChain
You can visit the DragonChain website to learn more about the business and their DRGN token, but we’ll try to summarize the key points here.
The DragonChain blockchain technology was originally developed by Disney. This was one of the big (if not biggest) selling point during the DRGN initial coin offering. The blockchain was dropped by Disney in 2016 and made open sourced so anyone could use and adopt the code (https://dragonchain.github.io/)
The non-profit DragonChain Foundation now manages and updates the code and DragonChain, Inc. is the company that plans to profit from the blockchain technology and their suite of services.
Joe Roets was one of the original Disney engineers that worked on DragonChain and is now the CEO of Dragonchain, Inc. Other former Disney employees are also part of the DragonChain team.
According to the website, there are 3 main aspects to the business – Platform, Marketplace, and Incubator.
The Platform allows new or existing businesses to leverage the DragonChain blockchain platform and technologies. The DragonChain Platform integrates with the most popular programming languages (Java, Python, Node, C#) easing the transition to the blockchain, and DragonChain offers both public and private blockchain solutions.
The Marketplace promises to provide an ecosystem of “pre-built library smart contracts, qualified vendors, specialized experts, and incubated projects”. The Marketplace is slated to go live in June 2018.
The third aspect, Incubator, is the most interesting but unfortunately where the business begins to fall apart. As an Incubator, DragonChain aims to launch startup businesses and ICO’s quickly on the DragonChain platform, selling those coins/tokens to their established base of DRGN token holders first and then opening up sales to the general public.
The DRGN token is an ERC20 token on the Ethereum network. DragonChain uses the Ethereum network for its token out of convenience. DragonChain plans to have its own blockchain at some point and can interface with multiple blockchains. The DRGN token provides owners with member benefits, the most beneficial being the Dragon Slumber Score.
The Dragon Slumber Score is a unique and quite clever system which encourages owners to hodl the token. The DragonChain Slumber Score is calculated as follows:
Dragon Slumber Score
What this basically means is the more DRGN’s you own and the longer you own them, the greater your Dragon Slumber Score is. If you move DRGN’s out of your wallet, your Dragon Slumber Score resets and starts over, so it’s best to just leave your DRGN’s sitting in your wallet (like MyEtherWallet). You cannot have a Dragon Slumber Score if your DRGN’s are sitting on an exchange.
The greater your Slumber Score, the better your benefits. Fore example, in DragonChain’s first incubator ICO with Look Lateral, the following benefits were given:
ICO Price Discounts for Dragon Slumber Score
The Case Against DragonChain
Now that we’ve covered some of the basics, we believe the DragonChain Incubator business is NOT well managed, and you should be VERY concerned if your an investor in DragonChain (or DRGN holder). We have lost faith in DragonChain and have no confidence in the ICO’s and incubator projects they are managing.
DragonChain’s First ICO – Look Lateral
DragonChain’s first ICO was Look Lateral – a company aiming to deliver three primary objectives in the art industry:
1) Tag the art piece with their proprietary signature tag to help record the provenance of the piece on a blockchain
2) Price the artwork with their proprietary pricing algorithm
3) Tokenize the artwork and provide a marketplace to buy tokens (or percentages) of an art piece. ie – purchase 10% of a sculpture
It’s not a horrible idea but there are some serious gaps in the concept that many community members wanted to address. Unfortunately, there was NO ONE from the Look Lateral team available to answer any questions regarding the business and the ICO across ANY channel – Twitter, Telegram, Reddit, Discord – no one showed up anywhere.
We tried directly messaging via Twitter the proposed “Chief Business Officer” but never received a response.
Legitimate questions regarding the project could not be answered. In the art industry, authentication is the biggest problem with even experts often getting deceived by forgeries. One question we had was at what point is an art piece tagged? Unless the piece is tagged by the artist at the time the piece is completed, how can we know if the art piece is authentic?
Another concern was the tokenization of an art piece and the liquidity in the proposed FIMART (Financial Market for Art Regulated Tokens). Look Lateral aims to create an entire marketplace to buy and sell tokenized art. On the surface, this appears to be a nice solution for those looking to SELL an art piece. It gives the artist (or gallery or whatever) a larger market to sell an artwork or a portion of an artwork.
ie – My name is Jack P and I’m a sculptor. I’ve sculpted an amazing dragon and listed it on FIMART. I’m pretty well known and I’ve sold other stuff so LookLateral’s algorithm attaches a price of $10,000 to the Jack P Dragon sculpture. That’s pretty expensive so tokenizing the artwork is a nice solution for me. One person buys 60% of the sculpture and receives 600 Jack P Dragon Statue Tokens worth $10 each. Four other people buy 10% for $1,000 each, and they receive 100 Jack P Dragon Statue Tokens worth $10 each. I’ve receive $10,000 for my Jack P Dragon Statue and I’m happy.
Fast forward 5 years, one purchaser now wants to sell his 100 Jack P Dragon Statue Tokens. How would he be able to find a buyer when you would assume there are tons of individual art pieces, all tokenized? You would have to be extremely lucky in the hopes that:
- massive amount of people actually use FIMART
- the Jack P Dragon Sculpture has increased in value based on the Look Lateral algorithm
- the Jack P Dragon Sculpture is in demand so that there may be a buyer of the token
- the buyer wants to buy all 10%, otherwise you have to find more buyers
Of course, we’re not even sure this is how it works because there is no one to ask…
In addition, we don’t know if your 100 Jack P Dragon Statue Tokens are backed by the value of the actual artwork. The purchaser who owns 60% of the Jack P Dragon Statue actually gets to physically hold the statue. But what if he then decides to sell the Jack P Dragon Statue on eBay? He receives 100% of the value. What do the other token holders receive?
Again, we don’t know and there is no one to ask. Not only was the Look Lateral team nowhere to be found, DragonChain could not answer any of our questions either. In fact, we received a warning to not spread FUD in the DragonScale telegram.
And just as a side note, the LookLateral ICO was planned for January 18, around 12pm PST. DragonChain tweeted this at 12:17pm:
Look Lateral ICO Delayed
And then, DragonChain tweeted and posted this message in Twitter and Telegram.
Look Lateral ICO Postponed
Here’s a proper response in the DragonScale Telegram group:
The Look Lateral ICO did complete the next day successfully. We did not participate because:
1) Too many unanswered questions to have any confidence
2) Look Lateral Team does not communicate
3) Niche market
4) Manually intensive – each art piece would need to be physically tagged and have data entered about the piece
5) Do not believe in widespread adoption of FIMART
For those of you who did participate in the ICO, of course we wish you good luck, this is just our opinion. Ok, now let’s look at DragonChain’s 2nd ICO…
DragonChain’s 2nd ICO – lifeID
DragonChain’s next ICO for lifeID was planned for January 29th, 2018. This appeared to be a promising project which aimed to utilize blockchain technology to securely store personal identity information. We feel that blockchain technology is best utilized in this capacity, to store and secure vital, critical, and personal data. lifeID proposed to do this by keeping our digital identity data on the blockchain, where each person is in control of his/her data, and what is shared where.
The concept is strong although not unique. Civic aims to accomplish basically the same thing, yet Civic has at least a year’s head start, already has a working app, and is quickly adding crucial partnerships. Vinny Lingham, CEO of Civic, was on CNBC on January 25th, 2018.
So, although lifeID is not the first mover, there may be room for multiple players in this space. ie – look at Experian, Equifax, and TransUnion. We read the lifeID Whitepaper, researched the team, and generally liked what we saw with lifeID.
Unfortunately, DragonChain failed to fully understand the lifeID project. There is a breakdown in communication or DragonChain just didn’t properly perform its due diligence with lifeID.
On January 23, 2018, DragonChain tweets this.
DragonChain Cancels lifeID PreSale
This comes as a shock to much of the DragonChain community which was very much looking forward to the lifeID ICO after the mediocre first offering of Look Lateral. Many community members were upset at both lifeID and DragonChain.
lifeID Discord Channel
lifeID has to follow the SAFT legal framework to stay compliant and avoid any kind of SEC crackdown. This means that DRGN holders cannot participate in the pre-sale unless they are an accredited investor ($1m in assets). Since not everyone can particpate, DragonChain dropped the ICO.
So that’s fine, it’s good that lifeID is staying compliant. The issue is how does DragonChain not know this 6 days before the launch? DragonChain is promoting the lifeID ICO, posting across all their channels, while never understanding the progress of the lifeID project and the legal position they were taking?!
To us, this demonstrates recklessness and incompetence.
The BIG question about DragonChain as an incubator is how do they perform their due diligence? How do they vet these incubator projects? There is no transparency to their process and we are concerned that there is, in fact, no process.
DragonChain Is Incentivized to Spew Out ICO’s at a Rapid Pace
DragonChain aims to build tokens and a token marketplace for each of its incubator projects. From the DragonChain Whitepaper, under the Incubator section, “Dragonchain will benefit from licensing fees and token ownership.” So the more ICO’s DragonChain can launch, the more tokens they will own. It is in DragonChain’s best interest to launch as many ICO’s as quickly as possible, especially during this climate when just about any token, once on a trading platform, has the potential to skyrocket (to the moon, as they say).
Also listed in DragonChain’s Whitepaper – check out this project currently “under incubation” – http://seed2you.biz and let us know if you think there’s a problem with that project…
The final straw that broke the camel’s back for us is DragonChain’s choice for its 3rd, or really 2nd, ICO launch – the well known and respected Metropolis Chain project. /s
DragonChain’s 3rd ICO – Metropolis Chain
On January 26, 2018, DragonChain announces its next incubated ICO project – the Metropolis Chain. Here is the tweet:
We obviously visited the Metropolis Chain website like everyone else to learn more, and you should too. The website has one page, the homepage, and a rough draft of a Whitepaper. The Whitepaper was so rough that the admins invited people to edit it themselves to add or improve on it! WTF? They want us to define their own business model?! Anyway, when we tried to go through the Whitepaper, someone changed the font to like 80 so it was 800 pages long with a few words per page haha. There were also statements getting removed and edited. We particularly like the addition of the word “penis” to the Whitepaper lol. Things settled down and we eventually got thru it.
Metropolis aims to be a job marketplace. Like a LinkedIn/Freelancer type platform.
Ok, so what’s wrong with this 3rd choice from DragonChain? What could possibly be wrong with a business that has a 1 page website, a poorly written Whitepaper that sought edits from strangers on the Internet, a team of TWO people with backgrounds as recruiters (lol, come on man, now you’re not even trying), no developers for a tech company, and the biggest RED FLAG – the domain name was registered 3 days ago!
At the time of this writing, this domain, and therefore the brand and the website, is only 3 days old.
MetroplisChain.com – 3 Day Old Business
The domain owner is also hidden. The owner is paying for privacy. There’s nothing inherently wrong with this, legitorscam.org has privacy but the site requires it (bad review = target).
MetroplisChain.com should be seeking trust from its investors. They’re launching an ICO for God’s sake, why are they hiding the owner of the domain?
Also, MetroplisChain.com is not a rebranding of another business or website. The site is literally brand new. You or I could’ve created it in an hour. It’s not even indexed in Google.
MetroplisChain.com Not Listed with Google
For a business that will require massive awareness and adoption to succeed, they have a website that is not in Google (at the time of this writing). The website literally gets no traffic.
MetroplisChain.com Completely Invisible
It is no easy task to build a brand, rank for quality search terms, and build traffic.
This is what we do not understand about DragonChain – apparently there have been over 200 projects submitted to DragonChain for consideration as an Incubator project. How the hell does MetroplisChain get chosen? Check out this conversation in the DragonScale Telegram chat room:
Discussion on MetropolisChain
Just crickets after that last response.
So, the nagging question, again – what was DragonChain’s process in selecting MetropolisChain as their next incubated project? It did not exist 4 days ago! How do you even give it a name when submitting the project to DragonChain? There was no brand or site! Are they sending Word and Excel documents with TBD Company and TBD.com website on them? We don’t get it…
DragonChain’s hyper-fast and reckless incubator ICO strategy appears to us like a short-term money grab rather than a long-term investment and development strategy.
One thing we do know – Joe Roets, CEO of DragonChain, Inc., apparently has to get compensated by the incubator project either with a position or as an advisor.
Joe Roets is a Busy Guy
There’s nothing wrong with that of course, Joe Roets can have has many jobs as he wants and make as much money as he wants, good for him.
But this is how we see DragonChain’s vetting process:
DragonChain Incubator Decision Process
Day 1 Introduction
DragonChain Employee: “Hello, this is DragonChain!”
Jack P: “Hi, this is Jack P, I have a great idea for a business! I want to create the new LinkedIn!”
DragonChain Employee: “Sounds pretty good!”
Jack P: “But on Blockchain!”
DragonChain Employee: “Oh! Sounds REALLY good! Can Joe Roets be an advisor for 10% of your tokens?”
Jack P: “Yeah, I guess.”
DragonChain Employee: “Congratulations, you’re in! What’s the name of your business?”
Jack P: “I don’t know, when I get home from school I’ll search for a random word + chain.com domain and call you back.”
Day 2 Requirements
DragonChain Employee: “Hello, this is DragonChain!”
Jack P: “Hi, this is Jack P again, I found a domain, my business is GothamCityChain.com! I created the website last night!”
DragonChain Employee: “Great, do you have a Whitepaper?”
Jack P: “No, but I’ll write one after I’m done with my homework.”
Day 3 Announcement
DragonChain Employee: “Hello, this is DragonChain!”
Jack P: “Hi, it’s Jack P, I finished the Whitepaper but it’s kinda rough.”
DragonChain Employee: “Great, we’ll announce your ICO across all channels right now!”
Some “investors” develop emotional attachments to their cryptocurrencies, making them blind, ultra-enthusiastic fanboys. They treat their cryptocurrency like their favorite sports team. It’s weird. DragonChain is no different, and may even be worse than most because people love Disney and seem to think Disney is still a part of DragonChain (it’s not).
We look at DragonChain and the DRGN token as an investment. We don’t get emotionally attached to a particular dollar bill, bar of gold, stock pick, or cryptocurrency.
There is not a lot to look at when it comes to fundamental analysis of a crypto, but we can evaluate DragonChain’s performance up to now, and we have lost our confidence in the company.
Again, this is not about the price of the DRGN token, but about the performance of the DragonChain company. If we had faith in the performance and execution of DragonChain, we would just tuck away our DRGN tokens and check their value a year from now. But since we don’t have confidence in the company, we don’t like holding the token.
Since we are not day traders and rely more on fundamentals, we plan on selling our DRGN tokens in the near future, depending on price action, and move on. We do believe DRGN is oversold at this moment, and will probably increase (but who knows) in the coming days as the hype machine builds up MetropolisChain and this 3 day old company’s ICO. Expect tweets and other stuff to come out from DragonChain.
DragonChain may or may not be a scam. Their ICO incubator projects may or may not be scams. As we’ve said, time will tell. However, we are choosing to move on; we believe there is too much risk and incompetence here, and believe there are better projects we can move our funds to.
Yes, we may lose some money on our DragonChain investment, but that’s ok. This is what’s important to consider for us as an investors – all things being equal, at this point in time, do we want our money in DRGN which has under-performed compared to most other alts, or put those funds to work in NEO, ETH, WTC, WAVES, etc etc… (tax implications aside).
It’s called opportunity cost. By leaving our money in DRGN means that we are missing out on some other appreciating crypto with a better outlook, better management, and better partnerships. The value of DRGN’s may rise in the short-term at the time of this post, and that’s cool, but we believe the crypto we move this portion of our portfolio to will outperform DRGN over the long term (we are not day traders).
If and when DragonChain improves their Incubator process and the quality of their ICO’s, we will reevaluate the company and token at that point in time.
Good luck with your investments.
Disclaimer: We do not offer any investment advice. Only invest what you are willing to lose. Do your own research. We have no idea what we are talking about.
We thank LegitorScam.org for publishing this article.
– Jack P
P.S. – We are not shilling or fudding anything. We’ve presented FACTS and then our opinion. Review the facts for yourself, and form your opinion. We have no motive other than for DragonChain to treat its investors and DRGN holders with the respect, due diligence, and transparency they deserve.
P.S.S. – This article is not a scam, there is no conspiracy theory, we are not whales trying to manipulate prices, we are not a pump and dump group. We are DRGN investors and crytpo-enthusiasts and we feel let down by the DragonChain team. It’s as simple as that. We have no profit motive whatsoever for researching and writing this article.
P.S.S.S – I can be reached at firstname.lastname@example.org. Any emails from DRGN fanboys will be immediately deleted without reading (get more tinfoil for your hats). Any emails from DragonChain management may be read (but no promises).
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The only thing that's a scam is this website for allowing hitjobs like this to get through. I wonder if any of this can be considered slander? They could be liable.
This article is the definition of FUD if ive ever seen it. Look at the other random reviews. These guys simply have an agenda, probably to just accumulate more DRGN for themselves. I'm convinced DRGN is just getting started. Give it time, let the platform get built and partners filter in. Slowly accumulate, and let those DRGNs slumber, so you can get in on Metropolis and other projects in time. Nobody is talking about DRGN yet, minus this embarassing corner of the internet here. But I think they will soon. Now, below $5, is the time to buy.
Dragonchain let the market decide the price for its token since day 1. Nobody is being forced to buy or hodl it.
People in crypto have the patience of 5 year olds, and just want a new project with potential like this one to deliver everything in 3 months.
Is DRGN a scam? There is a possibility. So is every other ICO. You have to play with the odds and manage the risks. That's it.
DRGN is a TOTAL SCAM!!! Everyone who owns should SELL NOW!!!! GET OUT!!!
Boy, did I ever buy into their hype. I thought they were great at first, but now, I don't know. After reading this I've decided its time to throw in the towel. Great work! And man those arrogant fanboys of DRGN really suck. I totally got convinced that all the professional advisors like the Xbox founder, or the fact Joe worked w/ Coinbase, Overstock, and Disney really counted. It seems like they are total scam artists to me, selling nothing but shitcoins. All their IPO's totally suck. Screw those guys, all REALLY intelligent people should get out while they can is what I think. I'm not some random guy either, I've made lots of money at business, and especially crypto so I know what I'm talking about. Don't listen to the DRGN shills nightsong...