The metaverse has become a popular topic in cryptocurrency over the past year. Decentralized finance and NFTs have both been popular long before that.
Naturally, this has led to some projects combining aspects of DeFi, NFTs, and the metaverse into a single project. One of those projects is called Universe. This article will offer a comprehensive review of Universe that will include what this project does and whether or not it’s a scam.
What is Universe.Money?
Universe is a dApp as a service (DaaS) on the Avalanche blockchain. It was launched on January 25, 2022 by a team of anonymous developers. It promises passive income up to 1,113% via staking.
This project has a lot of promises and, in our opinion, very little delivery of those promises.
Anyway, the basic operation of the project looks like this:
Investors can use Universe token (UNIV) to create an NFT planet. It costs 100,000 UNIV to create one of these NFT planets. These planets pay out a reward of 1% to 3% per day. The reward is paid in UNIV and can be compounded for further rewards.
There are zero fees for any part of the project. The project also claims that users will eventually be able to vote on governance of the project.
Another undelivered promise by the developers is a Universe metaverse that will allow players to earn even more UNIV rewards. They even make the very big claim that there will be bridges that allow planet NFTs to be moved from one blockchain to another blockchain.
Finally, the project claims that some percentage of fees charged will be donated to environmental non-profits. It’s interesting because they at first claim that the protocol does not charge any fees.
The Problems With Universe.Money
Unsurprisingly, there are a lot of problems with Universe.Money. This section will outline all the problems that we have with this protocol and then offer our opinion on this project as a viable investment option.
The APR is Too High
The first problem we have with Universe.Money is that the APR they claim to provide is way too high. 1,113% APR per year is absolutely ridiculous.
1% to 3% returns per day is also ridiculous and completely unsustainable.
Investors in these protocols would never invest in a centralized financial product offering 1,113% per day as they would immediately deem it a scam. However, many DeFi investors invest in these high-yield yield farms for some reason.
Anyway, what ends up happening is the protocol ends up minting so many tokens that the value of each token goes down significantly. This can be mitigated by adding new users to the protocol, but once the protocol runs out of new money, then the price collapses.
These projects have a tendency to last a week or two before running out of new investors and subsequently collapsing in price.
This project has been around for nearly four months and the price has in fact collapsed.
We do not like projects that have anonymous founders as it greatly increases the chances of the founders exit scamming. It’s very rare to see a DeFi yield farm have a fully doxxed founder as these projects are not sustainable.
The founders would likely face lawsuits and possibly fraud charges if they did this without the cover of anonymity. Granted, they could still face lawsuits and fraud charges even if anonymous, but it’s a lot more investigative work to uncover the founders in that case.
Finally, Universe.Money makes some extremely large promises in its whitepaper and on its whitepaper. As expected, none of these promises have come to fruition and will most likely never come to fruition.
Some of these promises include the following:
- The creation of play to earn game and metaverse.
- The creation of a bridge that allows moving NFTs from one blockchain to another blockchain.
- 1,113% APR
The first two promises might not sound like much, but they are huge undertakings that would require a large, experienced team to complete.
The third promise is doable and not particularly difficult. However, it’s extremely difficult (read: impossible) to have that high of an emission rate without completely crashing the price of the token.
Is Universe.Money (UNIV) a Good Investment?
No, we would not consider Universe.Money a good investment. The emission rate from the NFT farm rewards make it so the price of the token inflates to zero.
In fact, this has already occured judging by the price history chart for UNIV:
Is Universe.Money (UNIV) a Scam?
We cannot say whether or not this project is a scam without looking for the blockchain to see if the developers are dumping tokens on the market.
That said, it’s an unsustainable project regardless of whether or not the developers are dumping the token.
In other words, this token will go to zero.
To summarize, Universe.Money (UNIV) looks like another DeFi yield farm, but without the regular features of a yield farm (ie. locking up LP tokens for yield). Instead, the project requires users to create an NFT planet that pays out a daily reward.
It’s a new twist on a tried and true DeFi scam.