David Z. Morris: Kim Kardashian and Ethereum Max. Why? – CoinDesk

by crypto journalist

Plenty of celebrities and influencers have promoted cryptocurrency and blockchain projects over the years, including huge names like DJ Khaled and Paris Hilton. But Kim K’s post is almost certainly the biggest single piece of social-media crypto promotion ever in terms of absolute reach. And it comes on the heels of shoutouts for ethereum max from other big names, including National Basketball Association great Paul Pierce and boxing legend Floyd Mayweather. In fact, according to a press statement, ethereum max was “the Exclusive CryptoCurrency (sic) accepted for online ticket purchasing” for the recent Mayweather/Logan Paul pay-per-view fight.

But this isn’t just about ethereum max (sometimes abbreviated to emax). For years, crypto investors emphasized that you should “do your own research” about projects because the industry is so rife with scams, fraud and bad projects. It’s not obvious how exactly to go about that research, though, so I hope you’ll find some helpful methods below.

To be clear, what follows isn’t the right analytical approach for everyone. For day traders who move in and out of holdings quickly in an attempt to buy low and sell high over very short timespans (hours, not days), market signals like trading volumes or price patterns are key.

But for crypto buyers looking to make a longer-term investment, it’s best to focus on what stock traders call fundamentals. That includes information about who’s behind the project, what kind of innovation it brings to the table, its roadmap, revenues, spending, etc. A lot of this can be gleaned from public statements posted by the project and its participants: You don’t have to be a professional detective to do your own research, you just have to be willing to do some thoughtful reading.

But before we get to that, some basics. The Ethereum Max project was launched just a month ago, a spokesperson said Monday. According to its website, emax is an ERC-20 token on the Ethereum blockchain. That means it is NOT a fork, upgrade or competitor of Ethereum. An ERC-20 requires very little technical skill to create (that’s kind of the point), and they take advantage of functions of the Ethereum blockchain itself.

And despite the name, emax is not affiliated with any of the developers behind Ethereum. This is a fairly common problem in crypto because names are often not copyrighted or policed. There are dozens of coins with “bitcoin” in the name, for instance, but most have little to do with BTC.

While some ERC-20s are just for fun and have no real function, others are used to operate secondary software systems. Broadly, the hope is these tokens will increase in value based on their utility in those systems. But it’s hard to figure out exactly how emax works – the “tokenomics” section of the project’s home page contains only vague descriptions of “community perks” and a forthcoming non-fungible token (NFT) marketplace. It also promises “yield rewards” that distribute 3% of all transactions divided among holders. But there’s no detail about how any of this works.

There also doesn’t appear to be any information on the homepage about the team behind the project. This varies widely, but projects with unknown backers and developers are generally considered of higher risk. That’s in large part because it reduces the risk of prosecution or other blowback if the team disappears with investor funds or abandons the project.

How much did the people behind emax pay Kardashian? There’s no easy way to know, but previous reporting suggests she gets paid between $300,000 and $500,000 for most posts, and in some cases much more. I would guess a post to Kim’s ephemeral Stories feed is less spendy – but if you’re an investor, you should consider whether spending a year’s worth of developer salary on an Instagram ad serves the long-term interest of a project.

Equally, Kim’s disclosure raises questions about the other celebs promoting emax. Paul Pierce did not include any promotional disclosure when he tweeted about emax on May 26, and I’ve found no evidence that Mayweather, who wore an ethereum max T-shirt before the exhibition match with Paul, has disclosed any payments for his promotion.

That doesn’t mean they’ve done anything wrong, of course. Maybe famous multimillionaires Paul Pierce and Floyd Mayweather were truly promoting emax because they did their own research and they believe in the project. 

Ethereum Max has notched a few deals that sounded promising. In a press release on May 26, a press release trumpeted that ethereum max “is now the exclusive CryptoCurrency (sic) accepted for online ticket purchasing” for the Mayweather/Paul bout. On May 28, another release described a partnership with Miami’s Groot Hospitality to accept the token for payments at two nightclubs.

It’s very much a mark in favor of the Ethereum Max project that it seems to have negotiated cryptocurrency payments deals with a respected nightlife entrepreneur and with the organizers of the biggest boxing (exhibition) bout in years.

To get a clearer picture, we reached out to Ethereum Max about the program. “We had direct relations with a promoter to sell an exclusive limited amount of tickets,” a representative told us. “This was not partnered with Fanmio or ShowTime.” Basically, Ethereum Max built a middleman portal at mayweatherpaultickets.com that somehow swaps emax for dollars, which are then used to buy tickets. But the portal isn’t authorized by the fight’s promoters. (CoinDesk has reached out to Fanmio for comment as well, and we’ll update this story if we hear back.)

The project’s honesty when questioned is a point in their favor. But it makes the original claims seem misleading: How could ethereum max claim to be the “exclusive CryptoCurrency (sic) accepted for online ticket purchasing” for the fight, if there’s no official relationship to the promoters? The wording is very careful – it doesn’t say emax is the “official cryptocurrency of the Mayweather-Paul fight” or similar. In this case “exclusive” just means “the only token you can use for this purpose.”

Another easy way to evaluate a little-known project is to examine the professionalism of its presentation. We’ve already noticed the Ethereum Max website doesn’t have much in-depth information. And its press releases are a little troubling as well.

These misspellings are not a warning sign simply because they indicate that a team isn’t entirely professional. In crypto in particular, it may be tempting to dismiss such errors as honest mistakes from teams who don’t always speak English as their first language, or who are overworked and just not that focused on PR.

Another way to do your own research is to look back at old press releases for evidence of a team’s follow through. For instance, this May 30 release says the Ethereum Max team “is planning on releasing their Q3 roadmap before the Floyd Mayweather vs. Logan Paul PPV.” Eight days after that match, there is no sign of a roadmap of any sort on the project’s website. Delays happen, of course, so there may be nothing to worry about here – but would you invest in a conventional startup that missed this sort of deadline?

As I said, I’m not here to draw any conclusions about ethereum max. Nor do I claim I’ve examined it from every angle – in fact, that’s the point. You can do this kind of rough analysis of any project in just a few hours (it only took me about five hours of work to do this research and write it up for you). 

This content was originally published here.

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