Dadvan Yousuf: "Many cryptocurrencies run pump-and-dump games"
- Nov 7, 2021
- 6 min read
Dadvan Yousuf is already a multiple crypto millionaire at the age of 21. In the cash interview, he speaks critically about hyped "scam cryptocurrencies" and says which tokens he sees instead.
At the age of three, Dadvan Yousuf (21) fled Iraq to Switzerland with his family. At the age of eleven, he traded cryptocurrencies for the first time. Today he is a successful crypto trader and has been the founder and president of the foundation board of the Dohrnii Foundation since 2021. With this, Yousuf wants to make the crypto world accessible to everyone.
cash.ch: Mr. Yousuf, we need to talk about the cryptocurrency 'SQUID'.
Dadvan Yousuf: A total loss for investors.
It is about a token based on the successful series 'Squid Game', which shot 60,000 percent up within days, then turned out to be a scam and left private investors with a total loss behind. How can such a thing happen?
This can be answered in one sentence: The crypto market is currently not regulated worldwide. We are dealing with a typical crypto scam here, which unfortunately is not uncommon. The success of this fraud currency is based on two factors. First, the abbreviation 'SQUID' alone attracts many private investors. Everyone immediately associates the successful series 'Squid Game'. The second important point is good marketing.
Actually, it doesn't sound that difficult.
Knowing that creating a cryptocurrency is not difficult in itself. Such a thing can be done in five to ten minutes. It is more difficult to convey a vision and build an ecosystem. However, the creators of 'SQUID' had the advantage that marketing has already been largely done by the series. They were simply the first to use the abbreviation. After putting some own marketing into the project and getting many people to get in, they simply did the 'exit' later.
How often does such a thing happen?
Unfortunately, such a thing happens quite often. During the corona crisis, for example, we had the toilet paper token TOILET or the Pokémon Go Coin PokéCoins. Scam cryptocurrencies are usually based on hyped topics, because the marketing already in progress can be taken along relatively easily here. You may channel it a little more. Such a thing is still very easy to implement at the moment, because no one looks at people's fingers.
So you demand more regulation.
Definitely. Currently, the crypto world is still very opaque. More regulation would mean that crypto space would become more transparent for ordinary private investors. Of course, there are already certain rules. At my crypto foundation in Zug, the responsible supervision looks at our fingers, that's a good thing. But anyone who issues a cryptocurrency in Malta or Cyprus has a virtually free hand.
More and more so-called satire coins appear on the market. Are Dogecoin or Shiba Inu just nonsense or is there a meaningful use case behind it?
No, that's 100 percent just nonsense, to put it clearly. Of course, those who recognized these hype early on and started early could of course earn a lot of money with it. But that's all just momentum. Sometimes it's DeFi coins, sometimes it's NFT coins, sometimes it's just shitcoins that explode in price. I'm sure Metaverse projects will soon be the next hype. But if you look behind the scenes of these coins, you can see that there is often absolutely nothing there.
A coin is only as strong as its community behind it. Doge and Shiba Inu seem to have these. What drives people?
This is difficult to answer across the board. With 'SQUID', it was simply the series. People immediately associated the coin with the series and thought there was certainly something to get here. Dogecoin was the very first 'me coin', many simply thought that was a funny idea. With Shiba Inu, it was the pure fantasy that it had worked for Doge before. These are all communities where a large proportion of people are only looking for quick money, done.
Let's talk about the established cryptocurrencies. Ether recently reached a new all-time high. Ethereum is considered a leader among the so-called 'smart contract' networks. These can be imagined - greatly simplified - as decentralized app stores. Will Ethereum be able to maintain this position in the long term?
As a platform for decentralized applications, Ethereum and its cryptocurrency Ether will definitely exceed Bitcoin's market capitalization in the short term. The entire crypto ecosystem is slowly building on Ethereum. But in the long term, Ether will not be able to stay at the top. Neither in first place, nor in second place, not even in third or fourth place. I am absolutely convinced of that.
Why?
Ethereum will be dependent on more efficient projects. The biggest problem with Ethereum is that it is inefficient and expensive. Although it is a good platform for decentralized applications, the execution of smart contracts on Ethereum is far too expensive.
Ethereum wants to fix this and other problems with the update '2.0'.
Ethereum will switch to the proof-of-stake consensus mechanism...
...in this case, the creation of new blocks for the blockchain is much more efficient and cheaper than with the proof-of-work approach.
... but that doesn't make it any better either. In addition, it centralizes the entire project enormously. The network still remains far too inefficient compared to other networks. For normal users, it is not possible to trigger several smart contracts one after the other on Ethereum, simply because it is far too expensive. Other projects such as Solana, Cardano, Velas or Polygon are very likely to overtake Ethereum in the future. But Ethereum must be credited with one thing.
And that?
Projects like Cardano have been promising for years to execute smart contracts faster and cheaper. In fact, they have not yet gotten it together. Solana always promises that an infinite number of transactions per second are possible on the network. What happened? Solana recently went offline because too many users were active. Ethereum has never seen a complete shutdown. Unlike others, they talk less, but just do it.
Nevertheless, you will see the 'ether hunters' in the front in the long term. Who has the best chances?
As the biggest candidate for replacing Ethereum in the long term, I see Solana with its proof-of-history approach. This is a third-generation proof-of-stake technology. Proof-of-history is intended to significantly reduce the time until a transaction is confirmed. As a result, the blockchain system can currently carry out around 50,000 transactions per second. In the long run, there should be several 100,000.
And how is that supposed to work?
Simply put, not all transactions are validated individually with this mechanism, but can be validated compactly together. Not every transaction has to be approved immediately, but can also be subsequently validated together with others. This is even more efficient than proof-of-stake.
Is that the reason why Solana has risen so much recently?
Well, this can already be fundamentally justified by the advantages of the proof-of-history approach. But you have to know: Such extremely strong price increases rarely come out of nowhere, but are sometimes artificially caused by large exchanges.
What do you mean?
Sometimes it happens that a conglomerate on cryptocurrency exchanges believes that a project is fundamentally strong, but still completely undervalued. In such cases, the exchanges decide to stock up on the cryptocurrency and provide market maker teams to provide huge liquidity.
That sounds like astringent manipulation.
Simply put, it's about the following: People team up with their five best friends, and push a cryptocurrency with 100 million dollars each that has only 50 million dollars of market capitalization. In advance, you stock up on the cryptocurrency. Although they still have a lockup period of one or two years, where they are not allowed to sell, during this period they promote the currency extremely strongly.
Can you give examples?
This is what happens to Solana, Fantom and many other coins. Fantom didn't know anyone two years ago, today the coin has a market capitalization of 7 billion dollars. What insider trading is in stocks, for which you go to prison, are pump and dump games for cryptocurrencies, which are possible because of a lack of regulation. In addition, I see a new threat to private investors with the emerging IDO trend.
IDO stands for Initial Decentralized Exchange Offering. A new token is issued on a decentralized exchange...
And here I give an example: Someone wants to collect $30,000 for an IDO, i.e. a new coin. He may be teaming up with two friends with whom he finally buys 95 percent of the new tokens. The remaining 5 percent are sold publicly. After the hard cap has been reached, so the tokens are almost completely sold, the coin is listed on a decentralized exchange. What happens now? The three friends each take a much higher amount in their hands and pump it into their own coin.
With the result that the price explodes.
Exactly. But through this manipulation, the three friends have not yet made any money. But because the coin now appears in every top performer list, it attracts attention and people get FOMO. This means that they are afraid to miss something and keep buying it up. If the three friends can now offer good storytelling, the whole thing develops its own dynamics. In the end, they sell their 95 percent, which means that in the end hardly anyone but them made money. Unfortunately, this will happen even more often in the future.
So there is a lot of pump and dump in the crypto market. What should you pay attention to in general with tokens?
Technology is the most important thing. In addition, a good coin does not have to mean for me that it has to make a profit. A technologically very well-structured coin, for example, is Aeternity. However, it has a low market capitalization. You can say: A good coin has good technology, a profitable coin has good marketing and a very good coin has good technology and good marketing.
Link to original interview
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