EthConnect aims to create a lending platform built on the Ethereum blockchain. Find out how it works today in our review.
What Is EthConnect?
EthConnect, or ECH, is a digital currency that plays a role in a decentralized lending platform. That platform is built on the Ethereum blockchain.
The EthConnect ICO begins on November 1, 2017.
Right away, you’ll see some red flags on the EthConnect website. The first is the name, which is way too similar to the bitcoin community’s most infamous scam, BitConnect. The second is that the company promises to pay you 52% ROI per month by lending money through the platform.
As an EthConnect user, you buy tokens, then stake them on the platform. EthConnect will use those tokens to provide loans to users.
Why would somebody pay an interest rate of 52% per month for a loan? How does EthConnect plan to attract borrowers with an interest rate that high? These are all good questions. Let’s take a closer look at how EthConnect works to see if it’s a scam or a legitimate investment opportunity.
How Does EthConnect Work?
EthConnect promises to give token holders “many opportunities of investment”. You can invest your EthConnect, stake it, mine it, or trade it.
However, the main way in which you make money with EthConnect seems to be through referrals. Just like BitConnect’s pyramid scheme referral system, EthConnect has a 5 level referral system where you get paid 8% for anyone you directly refer to the platform.
The company describes this as “a solar module referral system” – although I’m not totally sure what that means.
In any case, you get paid 8% on the first level of referrals, down to 0.5% on the fifth level of referrals. The more people you refer to the platform, the more money you’ll make.
Overall, referrals seem to be the primary way to make money through the platform. The company vaguely mentions earning up to 52% through lending or staking. However, they don’t do a great job of explaining how these services work, or how much the average user can expect to make.
Based on the EthConnect website and whitepaper, EthConnect seems to be a referral-driven cryptocurrency with limited real products or services. Like most pyramid schemes, the goal is to encourage users to refer friends to the platform – they don’t seem concerned with solving any real world problems.
The whitepaper basically confirms that EthConnect is a scam. It’s a mess of vague information about cryptocurrencies in general, partnered with stock business photos and images of cities. The whitepaper features no technical details of the platform, and it has no information about the team behind EthConnect.
The EthConnect ICO
The EthConnect ICO is scheduled to take place from November 1 to November 30, 2017. The company will release 8 million EthConnect (ECH) tokens at an initial price of $0.50 per token.
By the end of the sale, that price will rise to $1 USD.
30% of the total supply of tokens is being distributed to investors. 30% is being given to developers, 20% to advertisers, and 20% to a “maintenance provider” – whatever that is.
One of many red flags about EthConnect is that the company claims investors should expect a price of $200 per ECH Token by the end of 2018. When somebody is selling you something today and claiming its value will rise several hundred percent within months, it’s a sign you’re being scammed.
EthConnect Investment Packages
EthConnect claims to offer a number of investment packages. These packages are unrelated to the EthConnect (ECH) cryptocurrency. Instead, you buy these “investment packages” in USD.
Four different investment packages are available, all of which claim to pay you up to 45% per month:
- $100 to $1,000: ROI of up to 45% per month
- $1,010 to $5,000: ROI of up to 45% per month plus 0.10% ROI per day
- $5,010 to $10,000: ROI of up to 45% per month plus 0.20% ROI per day
- $10,010 to $100,000: ROI of up to 45% per month plus 0.25% ROI per day
Again, it’s not totally clear how EthConnect plans to make money from these “investment packages”. The company claims the money will be used for lending. However, who’s going to pay 45% per month to borrow money from a sleazy online company? Payday loan companies offer better APRs.
Once again, the main purpose of EthConnect seems to be making money through a pyramid scheme.
Who’s Behind EthConnect?
EthConnect lists an address in Tokyo. Aside from that, we have no information about the team or their background. The whitepaper and website have no “About Us” page with any further information about the company.
When someone is asking for your money online, yet refuses to disclose their identity to you, it’s a sign you’re probably being scammed.
EthConnect seems to be a bad attempt to capitalize on the success of BitConnect, bitcoin’s infamous scam and pyramid scheme. The cryptocurrency has no real products or services on its platform. There’s some type of lending scheme that claims to pay lenders 45% returns every month. The main point of EthConnect is to convince users to refer people to the platform, then purchase coins.
There’s an overall lack of transparency regarding the EthConnect project. The whitepaper gives us no information about any technical details of the project. There’s also no information about the team or developers available online.
For all of these reasons, EthConnect seems to be one pyramid scheme you should avoid. Unless more information is shared from the team, EthConnect seems like a pointless cryptocurrency that doesn’t plan to solve any real world problems.