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Patricia, a Nigerian crypto change, has launched its personal token known as Patricia token (PTK). The corporate claims that PTK is a stablecoin that equals one US greenback ($1 = 1PTK). Prospects with bitcoin (BTC) or naira balances on the platform will obtain PTK as a substitute.
The change additionally introduced that it’s going to transfer its operations to a brand new platform known as Patricia Plus app. This announcement comes after Patricia revealed that it suffered a breach that resulted within the lack of funds. The corporate stated no buyer funds had been affected, however customers have been unable to entry their funds since April.
Many individuals have reacted to Patricia’s announcement with suspicion and scepticism. They suppose the corporate is likely to be making an attempt to rip-off its prospects and run away with their cash.
That is all of the pointer that you must verify that your cash is gone.
Patricia has simply upped the extent of fintech rip-off.
Convert customers cash to nugatory testnet tokens – manipulate an preliminary pump to evoke euphoria, sweep the complete rug and blame it on “the market” https://t.co/mgsneLFaxR
— 👑S.A.L.A.Okay.O🕊 (@UnkleAyo) August 19, 2023
All individuals need is for them to get their a reimbursement and never have it transformed to nugatory PnD tokens.
Your prospects didn’t ask for tokens. It’s giving FTX . https://t.co/uIzLLNq52T
— Crypto Coach 🐒📈💰 (@WisdomMatic) August 19, 2023
Causes for concern
It’s not new to see a crypto change/firm launch a local token. The follow has been round for years. Corporations like Binance, Coinbase, and lots of others use native tokens to lift funds, improve buying and selling exercise and enhance liquidity. The corporate usually holds the lion’s share of those tokens. And below regular circumstances, that shouldn’t be an issue. However in Patricia’s case, there are purple flags.
Firstly, not one of the prime crypto aggregators, similar to CoinMarketCap and Coingecko, have listed the Patricia token. In consequence, there isn’t a lot details about the asset, similar to its precise worth, the variety of tokens issued, its contract deal with, and what blockchain it’s working on.
Secondly, the corporate has not launched any whitepaper that explains how this token can be invaluable to its holders. And below Nigeria’s SEC tips, any firm launching a token has to point out their roadmaps, each to the regulator and potential holders.
The third level is a little more technical. Patricia Tokens are presupposed to be stablecoins pegged in opposition to the greenback. Meaning hypothesis shouldn’t have an effect on their worth. Nonetheless, reaching this feat is just not that easy. The ‘stability’ doesn’t come by default. As an alternative, the issuing firm will need to have simply as many actual {dollars} as digital tokens. So if Patricia is issuing 10 million PTK, it will need to have $10 million in its reserves. In any other case, the token’s worth will crumble below the load of heavy transactions. But when the identical firm has been struggling to rebound from an alleged $ 2 million breach, the place will it discover the {dollars} to keep up a peg? And Terra’s collapse exhibits that there isn’t a different to this technique.
Lastly, there was no consent. Patricia didn’t seek the advice of its prospects earlier than making this resolution, therefore the outcry. Proper now, the one counter-argument is that Patricia has constructed a reputation for itself over a number of years. However historical past has additionally confirmed that longevity doesn’t cease scandals from taking place. Living proof: Enron.
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