Could an overly-popular smart contract be dangerous to Ethereum?

5 min readJul 26, 2018

The world is gearing up for a new kind of technology, and the second biggest forerunner has a problem.

Fomo3d is an Ethereum based dApp that allows users to send ethereum to a smart contract in exchange for dividend-tokens and keys. Every time a user buys a key from the smart contract, a timer increases by thirty seconds (up to a limit of 24 hours) and distributes a portion of Ethereum to those holding key’s and tokens.

The real prize isn’t these dividends however; A large portion of token sales is placed inside the smart contracts wallet. When that 24 hour timer hits zero the last address to have bought a key receives 70–80% of the total pot depending on which teams are doing the best; this is still a ‘game’ after all.

The four available teams (Snek, Whale, Bull, Bear) choose your mascot!

These teams will affect the ratio of Ethereum distribution per round, each team favouring either dividends, current or next game’s pot payout as well as an equal balance option.

‘So far a huge amount of people have made massive returns so if I just get in quick…. No wait, yeah this is definitely a pyramid scheme.’

Yep thats right, Fomo3d is 100% a certified pyramid scheme, the companies website blatantly jokes about it.

Heck, they’ll even throw you a free ‘shilling’ pack to push the idea to family or friends and earn yourself more income.

At the end of the day, Fomo3d is a scam that states it is upfront, and I respect that.
— Fomo3d investors, probably.

Now, even with this forewarning — The idea of putting money in and getting more money out sounds pretty good; doesn’t it? To the point that I’m sure a lot of people would be tempted to give this a go, but let’s be honest — we’d only be putting in pennies right — Test the waters? It’d be crazy to put in more.

Well, turns out enough people felt that way because the pot’s up to 22,000 Ethereum ($10 Million USD) and counting. Until now the total pot sizes have been small and flown somewhat under the radar, but this thing has blown up:

Total Fomo3d Eth balance — one week time period — https://powh.trade/index.php

Now this would all be great if someone were to win the massive pot, it’s like a lottery that the public controls, anyone can buy more keys and become the last person to own the contract at the end.

Of course, that’s assuming this ever does end.

Are we ever going to let this go? There has to be someone out there that every time the timer gets a little low feels obligated to try just one more time, after all theres no maximum attempts.

For now the pot might be small enough to not attract the level of attention where the game would continue indefinitely. But if the pot was to hit six-figure levels of Ethereum, or better yet; if we see another big spike in the price of Ethereum, this could be the largest lottery in mankind’s history.

What does this mean for Ethereum?

The contract is set up to continually raise key prices as more are bought, up until a hard cap of 0.5 Ethereum per key.

And really, 0.5 Ethereum isn’t that much out there — it’s a drop in the bucket. Do we really have the capacity to stop? Will anyone ever actually win this prize?

If we assume 0.5 Ethereum is entered each 30 seconds (which would be the absolute minimum to keep the timer going indefinitely), we will lose 2880 Ethereum into the void that is Fomo3d each and every day.

Don’t let the beautiful artwork fool you.

This should balance out eventually, where the remaining ethereum will be too costly to justify a 0.5 ETH gamble and finally the pot will be won. But at what cost? The ethereum network would by now be suffering from a loss of liquidable ETH with too high a value to justify most legitimate use cases. As soon as our lucky winner sells their prize, or even beforehand out of pure speculation terror, we could very well see Ethereum go the way of a ponzi scheme due to the fact it’s single largest use case would be one.

Sure, when Ethereum costs one cent on the dollar we’ll all be ready to start using it for business-case smart contracts again, but this thought experiment — albeit a little ridiculous, highlights a large enough problem with smart contract blockchains and their decentralized, uncontrolled apps. We don’t just have a problem with scaling of users, any dApp, if it became just a little bit TOO popular, threatens the entire ecosystem and every business running on it.

What can be done?

In order for cryptocurrency to be useful in the future we have to change how we invest in it. We need to accept that our current methods of investment and the state of cryptocurrency is a mess. It’s a game of riding and timing the hype no better than Fomo3d.

The market is saturated with large scale investments for no-scale products. This is the sad truth behind the meme that is Fomo3d. It’s a metaphor on the state of our cryptocurrency community in general. With the way things are; we may all as well invest in a literal ponzi scheme.

— Although in the wise words of a wonderfully successful one: