Trust Army Review Finds Lack of Transparency in Web3 Tokenomics

  • Trust Army identified three main groups of projects based on token distribution transparency.
  • The report shows that 16.5% of the projects conceal their whitepaper, 34% hide their tokenomics, and only 50% have passed an audit.

Trust Army, a Web3 research and educational platform by Hacken, has reviewed the tokenomics of the first 100 EVM-compatible projects in its first Beta version. Insights from the report show that the platform was able to identify three main groups based on how they share information about their token distribution.

The first group of projects is those that openly share data on their token distribution, despite any flaws. The second group consists of those that conceal the source of their token issuance, either intentionally or unintentionally. The third group includes those that display their token distribution in a confusing manner.

Trust Army has found that out of 100 Web3 verified projects, 16.5% conceal their whitepaper, 34% hide their tokenomics, and only 50% have passed a smart contract audit. Additionally, 33% of projects’ token holders have 1% or more of the total token supply in their wallets, while 39% of projects have 1-3 token holders with more than 10% of the token supply in their wallets.

The report, however, noted that the acquired data is an interim analysis and will be complemented with the reports from the remaining projects in the beta version. The platform advises users to check third-party sites such as Wayback Machine and GitHub to uncover information on token issuances and distribution, even when tokenomics are concealed.

The Trust Army team states that they aim to help build a transparent Web3 by enabling anyone to acquire Web3 research skills and crypto DYOR through its Trust Army initiative. The project has rolled out a clear roadmap for the future of HAI and the Hacken.AI ecosystem. This includes a variety of products that assist in establishing trust in Web3, such as Trust Army, as well as the conversion of HAI into a Work-2-Earn, governance, and product-utility token.

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