[longread] The Kadena ecosystem is rotten to the core

4 weeks ago 84

This is simply a copy/paste from the archetypal nonfiction located astatine https://ruudy.medium.com/the-kadena-ecosystem-is-rotten-to-the-core-cd355b635976 - I implore you to work the Medium mentation if astatine each possible, arsenic mentation beneath volition the the aforesaid nonfiction but without links, images and formatting. Because images are missing, immoderate discourse mightiness beryllium missing.

Abstract (this means TLDR)

Last week, Kaddex, the biggest DEX connected Kadena was caught on-chain treble dipping their ain nationalist merchantability and diluting capitalist stock portion allocating a bigger stock of their token to themselves. Kaddex admitted guilt and promised to pain the ill-gotten tokens. CFO Daniele de Vecchis symbolically stepped down from his CFO position. In world thing changed, it's concern arsenic accustomed for Daniele de Vecchis and the remainder of the Kaddex team. Questions stay unanswered, anyone from the assemblage demanding to cognize much is silenced and banned. Lack of transparency surrounding these actions combined with suspicious engagement successful Kaddex from 1 of the authoritative Kadena squad members, Francesco Melpignano, makes Kadena unattractive for DeFi investors and builders.

About the author

I'd similar to present myself to springiness you immoderate discourse arsenic wherefore I americium penning this piece. I was a novice capitalist successful 2017 and held tiny amounts of cryptocurrencies. After the 2018 clang I became disillusioned with crypto, until successful 2020 I rediscovered Coinmetro. I accidentally invested successful their ICO successful 2017/2018. After seeing a mates of AMA video's from their CEO, Kevin Murcko, my religion successful crypto was restored. This antheral refuses to database shitcoins and dogcoins connected his exchange, he's each astir morals and regulations. For immoderate weird crushed he's 1 of the fewer radical successful crypto who doesn't privation to enrich himself, but alternatively supply worth to his clients and determination crypto guardant successful a much affirmative direction. If thing hasn't been listed connected Coinmetro, I don't adjacent see buying it, and that's however I met and fell successful emotion with Kadena.

What is Kadena?

Kadena is simply a Proof of Work (PoW) Layer 1 (L1), which genuinely solved the trilemma. Kadena tin standard retired infinitely portion staying decentralised and secure. Unlimited chains tin beryllium added, adding throughput portion keeping state fees connected Kadena debased forever. The tech down Kadena is great, but unluckily this nonfiction isn't written to shill Kadena. DeFi connected Kadena is inactive successful it's infancy, and it's connected it's mode to marque a mendacious start.

What's the issue?

The problems connected the Kadena concatenation revolve astir Kaddex. Kaddex is aiming to beryllium the biggest DEX, often officially sponsored and tweeted astir by the authoritative Kadena Twitter account. Not a batch connected Kadena is being built yet. Kadena delivers blueprints for assorted DeFi structures and it's up to the assemblage oregon companies to usage those blueprints to commencement a task oregon dapp. The existent deployed mentation of Kaddex is based upon KadenaSwap, the blueprint from Kadena for a DEX.

Recently an nonfiction published by yours genuinely uncovered that the squad down Kaddex utilized capitalist funds from their backstage merchantability to bargain monolithic amounts of their token $KDX successful the nationalist sale. Through the usage of 100's of proxy accounts, apt utilizing fake KYC's astatine Tokensoft, they allocated an further 1.15% of the full proviso to themselves. In a drawstring of statements from the CFO, integer illustration Mandrake, presently operated by Daniele de Vecchis, the CFO admits that Kaddex was the purchaser and that helium volition resign his CFO position. His nonstop statements volition beryllium shown further below.

I'm bushed of proceeding that 1.15% of the full proviso is insignificant, if you bash deliberation so, you tin halt reading. However, I bash invitation you to donate 1.15% of your nett wealthiness to my KDA address, [redacted to abide by rules], if you genuinely judge 1.15% is thing to interest about.

Before we heavy dive successful the inception of Kaddex, there's 1 much idiosyncratic I privation to introduce: Francesco Melpignano. Francesco Melpignano is presently the CEO of Kadena ECO, an organisation tasked with incentivising gathering connected Kadena. Recently they announced a $100M fund: [link redacted to abide by rules] At the clip erstwhile Kaddex started and was announced, Francesco Melpignano served arsenic caput of Business Development for Kadena.

Kaddex - a deep dive

We'll sermon each the events surrounding Kaddex successful chronological order, starting astatine the inception. Kaddex started retired arsenic an anonymous project. The archetypal idiosyncratic to cognize astir and to denote Kaddex was Francesco Melpignano. Melpignano claimed "an autarkic squad approached us".

Shortly aft the announcement of Kaddex, a backstage merchantability followed, successful June 2021. In the backstage merchantability Kaddex raised 3,242,085 KDA from anonymous investors. The backstage merchantability itself was dubious successful quality due to the fact that determination was nary KYC oregon immoderate AML compliance.

Some clip aft the backstage merchantability concluded, an nonfiction (from different author) appeared, it was alleged that Francesco Melpignano was down Kaddex, which would marque Kadena and Kaddex tally by the aforesaid people, portion the assemblage was told a abstracted entity would physique Kaddex. The nonfiction discussed 2 large points: (1) the backstage merchantability whitethorn not person been ineligible and compliant and (2) Francesco Melpignano is progressive successful some Kadena and Kaddex. Whether oregon not the backstage merchantability was ineligible oregon not is nary interest for now.

Key takeaways from the nonfiction arsenic wherefore Francesco Melpignano was alleged to beryllium progressive successful Kaddex:

  • One developer from Kaddex was doxxed: Guglielmo Sportelli, Application Developer astatine Redwing Labs.

  • The website kaddex DOT com was recovered connected a dedicated server belonging to Redwing Labs.

  • Redwing Labs operates nether the names of Redwing Labs, Redwing Technologies and RWL S.R.L.

  • Francesco Melpignano was recovered to beryllium the proprietor of the Redwing entities.

  • When Francesco Melpignano was asked to remark connected the situation, Melpignano responded by starting a cleanup; helium deleted his LinkedIn (now restored without Redwing present). Guglielmo Sportelli had to region Redwing Labs from his LinkedIn (see below) and the website kaddex DOT com was moved retired of the Redwing Labs dedicated server to different hosting provider.

None of the issues raised successful this nonfiction were ever addressed and ever disregarded arsenic "FUD". Bringing up "Redwing Labs" and "Redwing Technologies" resulted successful a prohibition from immoderate Kadena and Kaddex related channel.

Coming retired of anonymity

A period aft the nonfiction was published, the Kaddex squad decided to measurement retired of anonymity. Picking isolated their instauration statements amusement that respective radical notation that they person been with Kaddex since the start, astir notably the CFO, Daniele De Vecchis and galore of the different Italian-sounding names, namely, Adrian Cardoso, Giuseppe Pace, Guglielmo Sportelli and Felice Angelini.

Another important enactment is the instauration connection of Nicolas Ramsrud, Ramsrud states that helium has been "recently brought on" arsenic CEO and CPO. Who did Ramsrud regenerate truthful rapidly earlier the squad could beryllium doxxed? Or possibly that idiosyncratic is not replaced and Kaddex inactive has much undoxxed squad members?

"Founding" members backgrounds

Let's dive into the inheritance of these "founding" members. First off, the primitively doxxed squad member, Guglielmo Sportelli. It was recovered retired that Sportelli was moving for Redwing Labs aft the backstage sale. Currently Sportelli lone lists Kaddex arsenic employement. Why is it truthful important that cipher knows Sportelli was progressive successful Redwing Labs?

Second up we person different developer, Antonio Semeraro, Antonio was not yet mentioned due to the fact that we don't cognize if Antonio Semeraro worked for Kaddex since the inception of Kaddex oregon not. Antonio Semeraro announced successful his instauration connection that helium has acquisition moving for Redwing Labs. Project Manager Adrian Cardoso inactive states connected his LinkedIn that helium works for Redwing Labs. I tin commend Adrian for not trying to erase history, but not for not speaking retired against Kaddex' fiscal misconduct.

Next up is Giuseppe Pace. Giuseppe utilized to enactment for Redwing Labs arsenic Chief Technology Officer (CTO) but has since scrubbed his LinkedIn illustration and replaced his relation astatine Redwing Labs with Self Emplyoed[sic]. Scraping tract Rocket Reach scraped LinkedIn and inactive has a archived grounds of Giuseppe Pace moving astatine Redwing Labs: [link redacted to abide by rules].

I was incapable to nexus the different members, Felice Angelini and Daniele de Vecchis backmost to Redwing Labs. At this constituent we bash cognize that astatine slightest 4 of the "founding" Kaddex members are oregon were Redwing Labs employees. 2 retired of those 4, 3 retired of 5 if we see Francesco Melpignano recovered it indispensable to effort and erase the nexus to the past they had with Redwing Labs. We besides cognize that Redwing Labs is owned by Francesco Melpignano. Kaddex is apt a Redwing Labs project, which makes Francesco Melpignano the proprietor of Kaddex.

Francesco Melpignano is besides the CEO of Kadena ECO, the assistance programme which has $100M to walk connected Kadena incentives. It's precise dubious that Kadena would enactment the aforesaid idiosyncratic who owns the biggest DEX, Kaddex, and the biggest wallet, X-Wallet, successful complaint of the ECO assistance programme.

Financial trouble? The double dip

We get astatine the 18th of April, erstwhile I disclosed that Kaddex utilized backstage merchantability capitalist funds to bargain their ain nationalist sale. Read the afloat nonfiction here. Kaddex allotted themselves 1.15% of the full supply, valued astatine the clip of the merchantability astatine $1,840,000 US dollars. To bash so, Kaddex utilized hundreds of proxy accounts due to the fact that the maximum bounds was acceptable astatine 100k $KDX. The Kaddex squad allegedly tried to usage bot votes to crippled the DAO (Discord) and rise the limit, but the assemblage prevented that from happening.

Fairly rapidly aft the nonfiction Mandrake issued his archetypal response. There would beryllium an extended reply, the "FUD" would beryllium dealt with and Daniele de Vecchis mentions thing astir ethics. Note that I person written a 2nd nonfiction astir suspicious on-chain transactions from Kaddex. Daniele de Vecchis could respond to and disregard the allegations fom the 2nd nonfiction wrong an hour, those transactions were implicit fractional a twelvemonth old: Daniele de Vecchis knows precisely what goes connected on-chain and knows everything astir the finances and fiscal transactions of Kaddex.

What really followed was a precise abbreviated statement, nary "FUD" was addressed, it was confirmed that Kaddex utilized capitalist funds to bargain their ain sale. Daniele de Vecchis besides claims to respond to assemblage questions. Over the people of 12 days aft the nonfiction was published, I can't deliberation of a azygous question regarding the treble dip incidental that has been answered by the team. Kaddex pretends to beryllium a DAO, but Kaddex uses their Discord "DAO" for 1 azygous purpose: apical down centralised connection to the commoners. It's besides funny to work that the tokens acquired successful this mode volition beryllium burned, if the tokens were acquired for immoderate morganatic purpose, they would not person to beryllium burned.

Several days aboriginal Daniele de Vecchis follows up with different comment, simply stating that helium drops his CFO position. Nothing other has been said oregon cleared up astir the incident. I deliberation it's harmless to accidental that if the funds were to beryllium utilized for morganatic purposes it would person been amended for everyone progressive if Daniele de Vecchis simply explained what the funds were needed for, alternatively de Vecchis took the blasted and resigned his position. Up until this time it's not wide what resigning his presumption means; stepping down from the CFO presumption oregon leaving Kaddex. For now, it seems to beryllium concern arsenic accustomed and ignoring the assemblage and their questions.

It's funny that nary of the different squad members talk astir this incident. One of the fewer squad members making a connection is Steve D'Agostino, Chief Marketing Officer. D'Agostino thinks it's champion to pain the tokens and determination forward. None of the different squad members situation talk astir the incidental oregon reply questions successful immoderate way, signifier oregon form.

Instead of answering questions, Kaddex decided to commencement banning the assemblage members who kept asking for clarification and transparency. I've besides tried personally to get successful interaction with Daniele De Vecchis done his Mandrake relationship connected respective societal medias, each effort has been chilled. The squad is gathering a large partition astir them to support themselves from the community, the aforesaid assemblage they assertion to service with their DEX and DAO.

Conclusion: what now!?

Kaddex cannot look to determination guardant oregon backward connected this issue. Instead of giving the promised afloat transparency, they bash what they bash best; effort to hide the issues by banning radical who inquire questions and going backmost to concern arsenic usual. It shows however hypocritical the squad is and however overmuch contempt they person for the community. What we present cognize is that Kaddex treble dipped the sale, they admitted to it. The bought KDX was not meant for the assemblage oregon to walk later, due to the fact that they are going to pain it. It would not beryllium burned if it was bought for benevolent purposes. The incidental is terrible capable for 1 of the apical dogs to resign their function, successful this lawsuit Daniele de Vecchis.

Many questions arise.

  • Was this fraudulent behaviour from Kaddex solely authorised and carried retired by Daniele de Vecchis oregon is de Vecchis taking the autumn for the remainder of the team?

  • Why bash the different squad members inactive condone Daniele de Vecchis successful their squad aft these fraudulent actions, who other was involved?

  • What is the engagement of Francesco Melpignano successful Kaddex? Why bash truthful galore squad members stem from Redwing Labs? Why did those squad members and Francesco Melpignano himself spell done the efforts of scrubbing their nationalist profiles from Redwing Labs?

After aligning the facts, I cannot deliberation of immoderate imaginable mentation of however this was not a lawsuit of the squad enriching themselves implicit the backmost of the community. If determination was a bully explanation, the tokens would not person to beryllium burned and Daniele de Vecchis would not person to resign.

At this constituent I tin urge everyone who is providing liquidity connected Kaddex to propulsion retired their funds. Kadena uses Pact arsenic astute declaration connection and astute contracts are upgradeable. The squad has shown nary respect for the assemblage and it's not harmless to supply liquidity oregon interact with their contracts. The KDX token is not yet minted, but it volition precise apt dump connected release. Nobody should bargain it. I consciousness precise atrocious for the radical who were duped into buying the nationalist merchantability of this token due to the fact that they volition person lockups of up to 1 afloat year. I promote anyone remotely funny successful Kaddex oregon $KDX to work the #general transmission of their Discord since the 18th of April and spot and acquisition the deficiency of transparency and connection archetypal hand.

In this paragraph I privation to crook to the Kaddex squad outer ring, those whitethorn see marketing, communications (as acold arsenic Kaddex communicates), non-core development, advisors and moderators, fundamentally anyone who did not cognize astir the fiscal operations of Kaddex. It's clip to asses wherever you stand, wherefore did you get into crypto and DeFi? By continuing to enactment for and with the existent Kaddex squad you condone an ambiance of contempt for the community, not being transparent and conducting top-down centralised concern approach. I don't basal for that benignant of DeFi, I request transparency and existent decentralisation, and I volition support calling everyone retired connected that.

A good punctuation from Don D'Agostino, Marketing Operations astatine Kaddex. It's clip for Kaddex' squad members to amusement their existent colours. Does identifying atrocious actors lone use to the assemblage oregon does it use to Kaddex squad members arsenic well? It's clip to marque a choice. If you proceed to enactment for oregon with Kaddex, you are condoning and protecting malicious actors stealing from the community.

As for Francesco Melpignano, the Kadena ECO and his ties to Redwing Labs and Kaddex, I anticipation we tin get a Kaddex inception communicative which intelligibly defines however and up until erstwhile Francesco Melpignano was progressive successful Kaddex. It's wide that it's not a mates of radical wrong Redwing Labs that wanted to bash a broadside task connected their own. History connected LinkedIn profiles was wiped; determination seems to beryllium thing to hide. After my nonfiction of the 18th of April, galore radical contacted me, and radical similar to talk. I admit that this is conscionable hearsay, due to the fact that I cannot marque these names public, but 2 abstracted anonymous sources confirmed that Francesco Melpignano was oregon is so progressive with Kaddex.

Kadena is fantastic exertion and a batch of astute radical are moving connected it, but having the aforesaid idiosyncratic successful complaint of Kadena ECO and progressive successful the biggest DEX and DAO connected the concatenation and frankincense besides progressive with the biggest wallet, X-Wallet, would springiness of a precise atrocious awesome to investors and developers looking for decentralisation. This would marque Kadena full batch little decentralised, defeating the full intent of Kadena: having solved the trilemma.

I inactive clasp my Kadena successful the anticipation that the ecosystem and the assemblage tin wide up and flooded these issues. The fundamentals haven't changed, we conscionable request a caller batch of benevolent actors, a clump of heroes to prevention us.

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