Key Insights:
- Cipher’s abrupt collapse highlights risks in crypto investments, even with influencer endorsement.
- Adam Cochran faces scrutiny and trust issues after the promoted Cipher project fails within weeks.
- Despite high operational costs and quick downfall, Cipher pledges investor reimbursement, sparking industry debate.
Prominent crypto project Cipher faces backlash after its sudden failure just weeks following a high-energy promotion by Key Opinion Leader (KOL) Adam Cochran. Investors were left grappling with unexpected losses, triggering a fierce online debate regarding the project’s legitimacy and sustainability.
A short story pic.twitter.com/VPAc6o5stE
— ZachXBT (@zachxbt) October 24, 2023
Adam Cochran, known for his influential presence in the crypto space, had advocated for Cipher, only to find the project unsustainable due to excessive operational costs. Initially presented as an investment, the project faced stern criticism from commentators, including the notable analyst ZachXBT, who labeled it a “Ponzi fork project.”
Cipher’s downfall began after admitting to severe financial and structural hurdles, notably the lack of genuine users and overwhelming reliance on bots. The team disclosed operating costs of $35,000 per month while earning significantly through the Cipher fee contract, pointing to deeper management issues.
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Adam Cochran Opens Up on Cipher Debacle
In a series of charged exchanges on social media, Cochran defended his stance, expressing frustration with the team’s decision and citing personal losses incurred through platform fees. “Something failing isn’t a rug,” he argued, emphasizing the distinction between project failure and fraudulent schemes. He revealed the team’s exorbitant monthly expenses and efforts to mitigate costs, all while exploring avenues for a “graceful exit.”
Fwiw I'm annoyed the team did this and lost a lot on the fees as well. But the team had ballooning costs.
I talked to the team this morning and their now looking at ways to either turn it around or absorb into another project.
Something failing though isn't a rug; and the team…
— Adam Cochran (adamscochran.eth) (@adamscochran) October 24, 2023
However, ZachXBT challenged Cochran’s explanations, questioning the rapid downfall of Cipher and highlighting the financial damage to investors lured by Cochran’s promotional activities.
“How can it be ‘failing’ when it was literally only around for a few days/weeks?”
ZachXBT contested, implying premature capitulation possibly driven by insufficient profits from the “garbage fork.”
How about all of the people who bought into shares of people as a result of your posts and woke up to a huge losses?
How can it be ‘failing’ when it was literally only around for a few days/weeks?
Seems to me team gave up bc they could not grift enough $$$ off a garbage fork.
— ZachXBT (@zachxbt) October 24, 2023
Responding to accusations of a grift, Cochran denied any deceptive intent, referencing a potential grant that exceeded the project’s Total Value Locked (TVL). He reiterated his substantial investment and consequential losses, stressing the inherent risks of early-stage projects.
Despite the controversy, Cipher’s commitment to returning the remaining investments provides solace to disillusioned investors. Nevertheless, the incident underscores the volatile nature of the crypto industry, where high-stake investments can lead to significant gains or staggering losses.
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The Cipher debacle is a cautionary tale, highlighting the need for thorough due diligence and skepticism towards projects with unclear operational stability, even when endorsed by industry giants. As the dust settles, the crypto community is left wondering who to trust in the fast-paced, high-risk blockchain frontier.
Mubashir Ahmed is a multifaceted market analyst with extensive knowledge of the blockchain industry. He is proficient in market analysis and blockchain technology, having had experience with numerous projects in the space. He has a deep understanding of the Cryptocurrency industry, its trends, and how to best approach investing in it.
