Debunking the ‘Zeus Capital’ Disinformation Report on Chainlink

Short and Distort: A Primer

Key takeaways on “Short and Distort” schemes
  • Writing and publishing false research reports/articles
  • Using a pseudonym to hide their true identity
  • Lying about credentials and impersonating an established firm
  • Circulating false rumors on social media
  • Accusing malicious intent/fraud by a project’s founders
  • Manipulating data sets to fit a specific narrative
  • Lying through omission using half-truths
  • Using provocative and hyperbolic language
  • Paying for advertisements and coverage
Recent Article by Cointelegraph about the manipulation from Zeus Capital

Chainlink: The Industry Standard Blockchain Oracle

The Chainlink ecosystem
Growth in the number of smart contracts that have interacted with the LINK token

The Short and Distort Scheme Against Chainlink

  • They claim Chainlink is on Testnet when in fact it has been on mainnet since May 30th, 2019, and provides oracles for countless live applications that collectively secure over $1.5B USD in value. They tried to explain this away as Chainlink wasn’t a live blockchain, but it was never designed to be a blockchain. It’s middleware that runs both on-chain (any blockchain) and off-chain (to connect to any external system).
  • They claim that Chainlink’s adoption is declining when in fact it’s been growing exponentially since launch, with over 200 partners/integrations/collaborations. Numerous market-leading projects have stated that integrating with Chainlink allowed them to obtain critical off-chain data resources, go-to-market quicker, and become more secure through increased decentralization.
  • They claim projects are freeloading and even get paid to use the Chainlink network, when in reality numerous project founders that have integrated with Chainlink, such as Kava and Aave, have publicly confirmed that they pay to utilize the Chainlink network.
  • They claim the team is small and inexperienced when in fact the Founder is the pioneer of the blockchain oracle space (involved since 2014), the team is rapidly growing (now 40+ members), and they have outspoken and highly experienced advisors such as Ari Juels (former Chief Scientist of RSA), Tom Gonser (Founder of DocuSign), Evan Chang (Director of Engineering at Facebook), and numerous others.
  • They claim the Google and SWIFT partnerships are fake because the logos were “taken off the website” when in reality Google is prominently shown on the chain.link website. All you have to do is exert a tad of effort to scroll through their panel of quotes to find one from Google’s Allen Day. On the other hand, SWIFT is featured on the smartcontract.com website, with links to the Sibos PoC work they conducted.

Zeus Capital LLP: A Fake Anonymous Entity

Fraudulent Misuse of Company Logos and Brands

Marc Zeller of Aave regarding Zeus Capital
Ethereum World News (EWN) denied any connection to Zeus.
The Block denied any connection to Zeus.
AnChain.AI denied any connection to Zeus.
Aave again denied any connection to Zeus.

Anonymous Entity

A search of “zeus-capital.com” on the Internet Archive’s WayBack Machine shows that the site only became active July 17th, 2020. The last known snapshot of the website was from December 26th, 2018 that returned a 404: file not found error

Impersonation

Zeus Capital Twitter Account

Debunking the Executive Summary

Claim # 1: Market Manipulation

Many of Chainlink’s users live on mainnet using the Price Reference Feeds
The trend of Chainlinked smart contracts continues to rise

Claim #2: Permissioned On-boarding

Fiews’s node listing on market.link
High quality, security reviewed Chainlink nodes used in many networks
One of the many Chainlink Price Reference Feeds

Claim #3: Broken Tokenomics

Claim #4: Only on Testnet

News article about Chainlink’s mainnet launch

Claim #5: Founders are Dumping

Publicly stated terms during the LINK token sale in September 2017

Claim #6: LINK is a Security

Crypto Rating Council’s analysis of both Ethereum and Chainlink

Claim #7: On-Chain Token Data

As shown before, the number of Chainlink powered smart contracts is growing

Claim #8: Max Addressable Market

  • Securing smart contracts and the DeFi economy
  • Decentralizing traditional finance (CeFi) and FinTech
  • Providing a blockchain abstraction layer for enterprises
DTCC Project Whitney case study report

Claim #9: Secondary Provider

Claim #10: Economics and Competition

  • MakerDAO’s oracles are highly opaque, where 75% of the whitelisted nodes are anonymous. Maker oracles’ data quality is vulnerable to volume shifts, especially in thinly traded markets, as nodes pull data from pre-selected exchanges. This is especially concerning given all the new collateral additions. Additionally, they only offer oracles for a few crypto price feeds and only have a handful of users, which appears to have stagnated in new adoption.
  • Uniswap v1 is a highly insecure oracle solution, which has led to protocols getting oracle attacked and losing user funds. Uniswap v2 and it’s Time Weighted Average Price (TWAP) based oracle is set up in a manner where price accuracy is inversely correlated with tamper-resistance, meaning it’s hard to get both price accuracy and security. Additionally, Uniwap only supports price feeds for Ethereum tokens and the only known user is Augur, showing real limitations in network effects.
  • Compound’s current oracle solution is centralized, completely under the control of the core team, and only used by Compound. They are working on an Open Oracle System which is designed to support signed price data (a feature Chainlink has supported since day one) taken directly from cryptocurrency exchanges, opening it up to similar attack vectors like Maker. Compound’s OOS is not live and does not have any planned users outside of Compound.

Claim #11: Team

  • Started building smart contracts pre-Ethereum in 2014
  • Built the first widely used interface for DEXes
  • Built the first blockchain-based email service
  • Built the first centralized oracle service
  • Last but not least, built the first decentralized oracle network
  • Lead companies that have been acquired by Amazon
  • Expert in applied artificial intelligence
  • Best selling Amazon author
  • Graduated from Harvard Business School.
  • Worked previously a software engineer and team lead at Pivotal Labs
  • Built mission-critical systems securing sensitive HIPAA compliant data and building scalable payments automation software.
  • Oversees countless engineers and integration specialists who aid in the development and deployment of Chainlink oracle networks
  • Professor of Computer Science at the Jacobs Institute at Cornell Tech
  • Former chief scientist of RSA
  • Formalized Proof of Work consensus in 1999 (powers Bitcoin and Ethereum)
  • Created Proof of Retrievability in 2014 (powers FileCoin and Sia)
  • Co-author of the Chainlink whitepaper in 2017 and only works with Chainlink
  • Co-author of the Mixicles whitepaper in 2019
  • Co-founder of The Initiative For CryptoCurrencies & Contracts (IC3)
  • 36,000 total scholarly citations
  • Founder of DocuSign, the industry-leading e-signature provider in the world
  • Joined as a business advisor to Chainlink in early 2019
  • Decentralized consensus researcher
  • Associate Professor at the University of Illinois
  • Associate Director of the Initiative for Cryptocurrencies and Contracts (IC3)
  • Board member of the Zcash Foundation and Ethereum Enterprise Alliance
  • Advisor to both Zcash and Tezos
  • Former Senior Manager at Apple
  • Director of Engineering Blockchain at Facebook
  • Co-creator of the LLVM, which generates the low-level machine code running every Apple device, as well as much of Google, Nvidia, and Intel
  • Ethereum Core Dev and developer liaison at the Ethereum Foundation (the glue between Eth core devs and the community)
Dated image (thanks to Covid) but the team has been rapidly growing with top-tier experts

Claim #12: Code Progress

Conclusion

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Breaking down the information asymmetry on Chainlink, smart contracts, and the cryptocurrency ecosystem. Founded by The_Crypto_Oracle and ChainLinkGod

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