Despite billions in VC investment, many web3 crypto platforms are still pretty hostile places for users new to the crypto world, as Justin Kan, a co-founder of Twitch and the person that Justin.TV was named after, learned last week after launching Fractal, a ‘marketplace’ where in-game items could be bought and sold as NFTs.
Shortly afterwards, Fractal suffered a security breach when a scammer hacked the announcement bot for the startup’s Discord which sent out a fraudulent link to the platform’s more than 100,000 users, urging them to pay up for a new NFT. The message promised users access to 3,333 commemorative NFTs designed to celebrate the platform’s success, but the link was faked with a URL for fractal.is that swapped an “i” for the “l”, taking users to a minting site where funds were taken and they earned nothing in return.
They’ve locked down their Discord… with exception of Threads which their mods don’t appear to know how to stop…
A ton of angry people who just lost some money. pic.twitter.com/Sx1iqB5BgB
— Zach Bussey (@zachbussey) December 21, 2021
As the news broke, the Fractal team issued a statement acknowledging the hack, and promised to “make this right.”
Earlier today, approximately 373 of our community members fell victim to a scam posted on our Discord. We are sorry. We are going to make this right.
The hacker made out with ~800 sol (~$150,000) by managing to post a fake mint link in our #announcements channel. With over 100,000 members in our community, it’s quite impressive that the hacker only managed to dupe .3% of our community.
— Justin Kan ❄️ (@justinkan) December 21, 2021
While Fractal’s team seemed to be looking to coach their users in the right direction, the broader issue is that the underlying incentive structure of the NFT market tends to discourage users from engaging skeptically because drops sell out so quickly and there’s a culture of seizing on any and every opportunity, which can be dangerous for less seasoned crypto buyers.
Kotaku, a self-described video game website and blog, quickly reported on the disastrous launch with their usual flair for the negative and dramatic.
Not sure this is the time to be congratulating yourselves, but go on. Fractal say they are “planning to fully compensate these 373 victims,” before adding the extraordinary warning, “We must use our best judgement as there’s no ‘undo button’ in crypto,” making the entire post read like a textbook example of showcasing why this is such a shitty space.
In response, Kan had the following to add.
Well, yes. Plus Luke Plunkett is a smear merchant.
— Ꮗιʅʅ (@OliWilly) December 23, 2021
Written by Luke Plunkett. That’s all we need to know about this article.
— Zakky (@ZakkyZu) December 22, 2021
‘Blocked By’ needs to be public information just like ‘Followed By.’
It’s ridiculous that we pretend these high-follow counts are popular when for all we know they have 5x as many people who refuse to allow them on the TL
— Shepherd 🇺🇸 (@AdsAmateur) December 22, 2021
No one with any sense disagrees with Justin kan. He is simply saying what most of us think.
We aren’t necessarily pro-NFT either, but we at least recognize that people lost money. The biggest recently known scam in the field of video games was Squid, which resulted in more than $ 3.3 million in losses. At the moment, the most important platform in the field of video games, Ubisoft Quartz, is not having the success that was expected.
Tread wisely in the NFT realm folks.