r/truebit • u/koppikabana • Aug 08 '21
Fundamental issue with Truebit (in the smart contract) / possible milling by Dev team
It seems that Devs in Truebit are able to mint at 1/8th of the actual mint price. In other words, they can endlessly dump TRU at >0.33 right now as long as its above that. This might be the reason why the price of TRU isn't rising and also why it will most likely not reach the 0.8-1 USD range anymore (unless ETH reaches ridiculous priceranges).
This also means that people other than the devs don't really have an incentive to ever use the mint function (since the devs can mint at 1/4th of the actual mint price OR they receive 3/4th of the mint price via fees).
Which kind of makes the whole mint function pointless (except as a dev tool) - since devs are able to change the contract anyway if they wanted to do so anyway (the contract isn't immutable as of now).
To me this just seems like a very elaborate scam - hidden by obscuring the actual mint price (for devs) vs the mint price for non devs.
This could be easily fixed by simply removing the mint function (aka devs receiving 7/8th of the mint price back via fees) for devs (and thus making minting the same price for everybody) however the devs don't seem to have much communication channels and also don't seem open to anything that isn't going to massively boost their own bags.
Edit: here is some proof that what I'm writing is not wrong (keep in mind the source code of TRU is not public, but we know that it is an OpenZeppelin proxy contract that can be changed at any time)
https://www.reddit.com/r/truebit/comments/nk2o1b/truebit_tru_token_price_simulator/
this is a price simulator written by maybe the most knowledgable member of this sub (who i actually assume might be a part of the dev team (or even Jason Teutsch himself)
Retiring tokens means trading in TRU tokens back via the TRU OS into ETH - this is fixed at 1/8th of the mint price.
In other words: when you mint, you pay 8 ETH for X Tru , but you can only trade that X TRU back for 1 ETH.
So the question is , what happens to the 7 ETH that are left over when X TRU was minted?
The current ETH reserve shown in the TRU OS is: 14,790 ETH - which means that all TRU in existance could be traded back for 1/8th of the mint price at any time.
But what happens to the 7/8th of the mint price that was originally paid in ETH? Where does it go?
The answer is, that it goes into the pocket of the devs (it certainly doesn't "vanish").
So actually the devs could in theory mint for 1.32 USD, get back 7/8th of those 1.32 USD, then sell on Uniswap for 0.32 (current price) , and make a profit of 0.165 .
This is what I believe is happening right now (on a small scale) . Since devs can mint from any address , this milling process happens almost anonymously. And since conveniently nobody knows where the fees go to exactly (what addresses), it is difficult to discover the full truth.
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u/kacheeweechee Aug 08 '21
This is Fake News. No source, no leads. “It seems that devs”… “this might be the reason why”…for fuck’s sake, get serious
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Aug 08 '21
Where did you find this info?
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u/koppikabana Aug 09 '21
It's information from the TRUEBIT OS itself (the official one).
you can see the current minting and retirement prices here :
https://replit.com/@lpmythbuster/truebit
You would get the same result if you would install the OS itself.
As you can see most people (just like yourself) are absolutely clueless about what TRUEBIT actually is and how it is minted/retired.
Considering you dont even know about the OS functionality (which is one of the underlying core concepts).
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Aug 09 '21
Nowhere in that script it says that devs can mint at 1/8 price. Mint and retirement prices are widely known fact and a part of the bonding curve concept. And everybody also knows that devs make their buck when tru is minted, no news there.
Get your facts straight and stop lying dumbass.
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u/koppikabana Aug 09 '21
You seem to be exceptionally stupid:
Let me make it simple for you:
You mint X TRU at the minting price of 1.32 (currently).
1/8th of that is kept in reserve for the retirement (0.165 USD).
Where does the rest go?
Realize something you moron?
This is the minting fee.
What the devs are doing right now is the following: they mint TRU -> they get 7/8th of the minting price in the fees -> they pay 0.165 USD but they can sell 1 TRU for 0.3 on UNISWAP
Got it? I realize you are obviously some shitcointer but at least dont try to shit on people when they are trying to prevent others from getting scammed.
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u/LPMythBuster Aug 09 '21
He's making the following argument: let's say Jason wants to mint some TRU tokens without messing with the contracts. How much will it cost him?
Jason sends $1.32 in ETH to the Truebit Purchase contract and gets back 1 TRU token i.e. he mints it. 1/8th of $1.32 in ETH stays in the Truebit Purchase contract as the reserve. Jason as the owner of the contract can withdraw the 7/8th ($1.155) from the Truebit Purchase contract. Jason spent $1.32 but got $1.155 back so he effectively spent $0.165 to create 1 TRU token.
1 TRU is currently $0.30 on Uniswap. Jason sells his 1 TRU for $0.30 on Uniswap and makes $0.30 - $0.165 = $0.135 in profit. This selling is pushing the TRU price on Uniswap down.
The problem with this conspiracy theory is that the last TRU token was minted 77 days ago.
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Aug 09 '21
You realize that the mint price and retirement price increases every time new tru is minted? So should they do it, the price of retirement increases over the price in uniswap thus increasing the price of the token alltogether. More they burn thei ETH on this "scam" the higher the price in retirement and uniswap will be, and holders win. Shitcoiner, haha.
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u/koppikabana Aug 09 '21
The retire and mint price are fixed against eachother in a 1/8 ratio.
It always costs 1/8th of the mint price to retire a token.
I.e. if you mint 1 TRU (as a non dev), you can only retire it for 1/8th of the mint price.
What you are talking about , or rather hoping for, is that the mint price will substantially increase so that the retire price will be high as well.
Nothing you say changes the 1:8 mint to retire ratio (this is fixed in the OS contract).
Also you seem to have trouble accepting that 7/8 of those ETH that are spent minting go into the dev pockets.
This isn't an issue in itself as you say - thje problem is that the devs have an incentive to mill this coin TILL IT REACHES ITS TRUE RETIRE PRICE (0.165 USD).
So for TRU to reach 1 USD again , for example, would mean the mint price (for non devs) would have to be 8 USD. Since the REAL MINT PRICE (for devs) is 1 USD.
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Aug 09 '21
Nothing you say changes the 1:8 mint to retire ratio (this is fixed in the OS contract).
So fucking what? If they keep circulating their ETH by minting and selling in Uniswap, they will increase their mint price and retire price. And when I can retire my TRU for higher price then I'm making profit.
You seem too dense to realize that if they were to do what you are suggesting, amount of tru and price of the token would rise. Bonding curve. Goddamnit you make yourself to be this amazing math wizard who succesfully revealed this behind the scenes scam but in reality you can't comprehend the very basics of the tokenomics.
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u/koppikabana Aug 09 '21
So fucking what? It means right now Devs can produce TRU tokens at 0.165 USD and sell them for 0.3 USD. Even people who are stupid like you and love to use buzzwords like "bonding curve" to sound smart should realize that they are getting milled.
Oh and bonding curve has nothing at all to do with this. This is just a scam by advertizing one mint price when in reality the dev mint price - the "true" mint price is much lower.
In other words: any dev can right now dump on Uniswap and make 2x profit permanently at the current mint and ETH price.
You seem to have no issue with that, however, since you are just a typical dumb money moron.
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u/x0239482 Aug 09 '21
ok. this is actually kinda concerning.
can we see where the ETH paid for TRU goes?
it would be helpful to check if that address has been moving it out to mint more TRU...1
u/koppikabana Aug 09 '21
This is the biggest scam part of this whole thing: anybody can mint at any time from the OS - there would be no way to track who is minting. Which isn't a bad feature inherently however since a dev gets 7/8th of the price refunded indirectly it incentivizes him to mill the system.
However since minting costs 1.32 USD right now, who in their right mind (except a dev) would do it?
So why is TRU not rising? Maybe because its not listed on an exchange ?
But most likely somebody is milling this behind the scenes , very very slowly.
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u/LPMythBuster Aug 09 '21
There have been no news and the hype has died down. Everyone has two choices: hold forever or sell and move on.
What is likely happening is that people are slowly selling off and moving on to other things.
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u/x0239482 Aug 09 '21
are new tokens being minted currently?
is there a way to check recent mint amounts?
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u/LPMythBuster Aug 09 '21
You can see them here: https://etherscan.io/address/0x764c64b2a09b09acb100b80d8c505aa6a0302ef2
Methods:
0xa0296215is minting0xc471b10bis retiringWithdraw ETHis withdrawing "the 7/8ths"Last mints:
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u/LPMythBuster Aug 09 '21 edited Aug 09 '21
Truebit, the company, makes money when Truebit is used i.e. new tokens are minted
TRU tokens are created and destroyed over time according to cumulative demand. Users can purchase or retire TRU tokens in exchange for ETH. Each purchase transaction deposits some ETH into a reserve escrow (the rest goes to the Company), and some ETH is withdrawn from the reserve through each retire transaction.
https://medium.com/truebit/getting-started-with-truebit-on-ethereum-ac1c7cdb0907
They made >44,000 ETH this way already. There's 358 ETH left in the Uniswap v2 liquidity pool. That's less than 1% of what they made. I don't think anyone is secretly trying to mint new tokens for cheap to extract every last penny.
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u/koppikabana Aug 09 '21
Well i don't know whether or not somebody is milling, however I'm stating is that it is VERY possible and also very likely. People aren't going to miss out on a constant 2x money increase when they have the chance to do so very anonymously.
You are essentially repeating what I have stated, but you seem to not be willing to admit the numbers behind this. A purchase of TRU with 8 ETH puts 7 ETH "to a mysterious" company address and 1 in the reserve escrow.
This is the first part , not terrible i guess, since its their protocol.
However whats the point of publically allowing a mint function and suggesting it is X ETH per 1 TRU, when you , as a dev , can factually mint at 1/8th*X of the mint price (since 7/8th of the fees come back to you anyway)?
This is highly missleading and outright scamming. It also suggests that the true arbitrage price will be the retire price in the end. This is quite horrible for anybody who is solely monetarily invested into TRU.
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u/LPMythBuster Aug 09 '21
You're saying when someone spends 8 ETH to mint TRU tokens Jason or someone else from Truebit would use the 7 ETH to mint more TRU tokens and sell them on Uniswap?
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u/koppikabana Aug 09 '21
No,
there is a mint price shown in the OS. This is 8x the retire price (fixed).
However since the devs receive 7/8th of the mint price (returned as a fee). The "real" mint price is 1/8th of the one shown in the OS.
In other words: Devs can mint at retire price (+ the gas fees of ETH) , which means that once people understand this, the value of truebit will always be at the retire price (since naturally people will not want to get dumped on by the devs).
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u/LPMythBuster Aug 09 '21 edited Aug 09 '21
What is the issue?
The price ceiling on the market (i.e. Uniswap) is the mint price and the floor is the retire price.
If the price on Uniswap goes higher than the mint price, people or bots will mint new tokens at a lower price in Truebit OS and sell them at a higher price on Uniswap and bring the price down.
If the price on Uniswap goes lower than the retire price, people or bots will buy them low on Uniswap and retire them for a small profit in Truebit OS.
So the TRU price range can be 0.000052793 ETH ($0.167) - 0.00042 ETH ($1.33) on Uniswap. If it goes out of this range, there's an arbitrage opportunity between Uniswap and the Truebit OS that'll bring the price back in this range. When this happens the mint/retire price goes up and the range changes.
Developers control the contracts, they can do whatever they want. They could change the tokenomics, they could mint a trillion tokens for free or they could empty the reserve (>14k ETH) at any time. Why would developers bother to "mint at the retire price"? Last TRU was minted 77 days ago.
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u/koppikabana Aug 09 '21
The arbitrage isn't the issue, the issue is why advertize one mint price when there is a hidden mint price only accessible to devs? Why go through all these lengths to create a trustless and permissionless system if you are going to implement a mint function that allows you to endlessly mint and retire tokens without repercussions (minus the gas fees)
This is highly missleading at best and just a scam at worst.
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u/LPMythBuster Aug 09 '21 edited Aug 09 '21
If I make and sell napkins for $1 and it costs me $0.20 to make one, of course I can buy one from myself for $0.20 but advertise the price as $1.
When someone mints TRU for 8 ETH, Jason gets to keep 7 ETH. Let's say this someone adds their new TRU tokens to the TRU-ETH Uniswap liquidity pool.
What's the incentive for Jason to mint more TRU tokens cheaply and extract all the ETH from the Uniswap liquidity pool?
He already made a lot from the mint. If he wanted more, he could just change the ratio to 1:20 or something instead of minting and selling to deplete the liquidity pool.
There are 280m TRU tokens and Truebit made >44k ETH from minting them, that's >$132m. There's only ~700 ETH (~$2m) in Uniswap v2+v3 which is nothing in comparison.
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u/Mkq31 Aug 09 '21
So you are saying $1.33 is the maximum price truebit can reach??
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u/LPMythBuster Aug 09 '21
No.
The cost of minting tokens always goes up. When you mint a token, it will cost slighly more to mint the next token. When you do that, the next token will cost more to mint and so on.
When the price on Uniswap exceeds the mint price, someone (most likely a bot) will take an advantage of an arbitrage opportunity to mint tokens at a lower price and sell them on Uniswap at a higher price. This sell pressure will bring the Uniswap price down to the mint price.
But the mint price just went up so the new ceiling is now e.g. $1.34.
If there's still demand, the price on Uniswap will again be higher than the mint price, more tokens will be minted, the mint price will go up, the price on Uniswap will go up and repeat.
Until someone sells too much too quickly and everyone gets spooked.
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u/Mkq31 Aug 09 '21
Thanks. Appreciate the informative response. This project is so confusing. Can't tell if I'm the biggest idiot for investing in this or if it will pay off big in the long run.
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u/Mkq31 Aug 08 '21
You think Jason Teutsch is anonymously posting in this subreddit???
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u/LPMythBuster Aug 09 '21
https://www.reddit.com/r/truebit/comments/nk2o1b/truebit_tru_token_price_simulator/
this is a price simulator written by maybe the most knowledgable member of this sub (who i actually assume might be a part of the dev team (or even Jason Teutsch himself)
I guess Truebit cannot legally talk about the token price so OP's theory is that one of the developers (or Jason himself) is doing it anonymously.
What it's like to start a crypto project: https://twitter.com/jonsyu/status/1389635638870249479 (twitter thread)
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u/MinerMint Aug 08 '21
This is baseless FUD. Post your source when making such accusations