Author: Arain, ChainCatcher
Editor: Nianqing, ChainCatcher
"This is the first time I've seen someone lose money on a shill." Crow (alias) commented in the Xterio rights protection group.
The Web3 game development and operation platform Xterio was once a star project in the market. With its strong team background and strong capital support, it attracted many investors with real money. A netizen named "Little Person" wrote a memoir on X about the reason for building a position in Xterio: "Suddenly I remembered why the people around us have an average loss of 1 million on this project. A few months ago, when this project announced the investment of Binance, there was an occasion where I had dinner with the people of Xterio, and then we all FOMO'd on the position. That dinner was so expensive, I want to cry."
However, the reality awaiting investors is generally a loss. On January 8, Xterio carried out a token generation event (TGE), and the dissatisfaction of investors due to losses continued to rise. As the KOLs participating in Xterio continued to expose and show the loss data, the dissatisfaction in the community was immediately ignited, and various Xterio rights protection groups were brewing vigorously.
Losses, fraud, humiliation... the dream of wealth has shattered, and the once dazzling star project seems to have fallen from the altar.
TGE Doubts Abound, Community Hammers Xterio
The founding team of Xterio comes from top game developers such as FunPlus, EA, and NetEase, and has also received investments from well-known institutions such as Binance Labs, FunPlus, and FTX.
Compared to many Web3 native projects, Xterio can be said to have "been born with a silver spoon in its mouth". On August 30, 2022, it completed a $40 million financing round with a $300 million valuation, with well-known institutions such as FunPlus, Makers Fund, FTX Ventures, and XPLA as the lead investors, and many industry giants participated. On July 13, 2023, Binance Labs also injected $15 million into it to support its game development and token launch plans in the fields of AI and Web3.
Based on the past poor performance of the NFT market, investors have already suffered losses on Xterio. An investor told a ChainCatcher reporter that he had bought the Xterio-launched Dino NFT (from the self-developed game Age of Dino) at an average price of 1-1.2 ETH, while according to Opensea data, the floor price of the Dino NFT has been below 0.3 ETH for the past three months.
It can be seen that the loss is not the main factor that triggered the community's emotions, the real fuse was the TGE event on January 8, which completely ignited the powder keg between the community and the project:
On January 2, Xterio released its token economic plan, planning to issue 1 billion XTER tokens: 28% for the community, with 20 million tokens fully unlocked at TGE; 26% for the ecosystem, with 20 million tokens fully unlocked at TGE; 15% for investors; 12% for the team; 9% for marketing, with 15 million tokens fully unlocked at TGE; 4.25% for the treasury, and 5.75% for providing liquidity and staking at TGE.
After announcing the token economic plan, Xterio also released the rewards for Age of Dino during the TGE event, promising that Age of Dino would receive a 2% XTER token ecosystem subsidy during the TGE period. In addition, at least 8% of the Age of Dino tokens will be fully unlocked and distributed to NFT holders and players at the AoD TGE.
After the TGE, many investors reflected that the actual airdrop ratio was different from the announced one. ChainCatcher conducted centralized interviews with investors after the TGE event.
Xiao Tao (alias), one of the many losers, is a personal player of Age of Dino. In an interview with ChainCatcher, Xiao Tao said: "If you airdrop the normal amount, I can accept the price not doing well, but airdropping 0.5%, this is not fraud, what is it? This is a complete insult to investors!"
Xiao Tao showed ChainCatcher a screenshot of the airdrop contract address during the project's TGE, "The airdrop contract had a total of 20 million tokens, and only 5 million tokens were claimed in one day." Xiao Tao also told ChainCatcher that he had invested 50,000 U in the Xterio project, full of expectations for a generous return, but the reality dealt him a heavy blow, and he only recouped 4,000 U, with a loss rate as high as 92%.
Investor Peng Peng said: "From the situation of token claiming, the team only airdropped 0.5% to the community, and embezzled the remaining 1.5%. And with so many activities plus tens of thousands of NFTs, they only airdropped 2% to the community. The project team used the liquidity they should have provided to stake on the exchange."
Ximen Zi (alias) did some calculations and said that 80% of the aforementioned airdrop should have been taken by the project side: "Not counting the AI points (Xterio collaborated with Bybit wallet at the end of last year for a Xterio AI Agent points activity), the community players only got about 3 million tokens. This 3 million also includes the project's rat trading, the project has at least 1,000 Dino NFTs, of which more than 85% are rare NFTs, taking up a large share. So in summary, including the AI's shill players, the community actually only got less than 4 million tokens, accounting for about 3.5% of the initial 112.5 million circulating supply."
Xiao E (alias) pointed out another problem, that Xterio inflated the data during the TGE, resulting in the dilution of player rights. He showed ChainCatcher a chat screenshot with Xterio's business person Kelly on Telegram, in which he asked Kelly if all the scores would exceed 100 million, and Kelly replied "unlikely", but Xiao E found that the scores eventually became 270 million during the airdrop period, which he claimed was equivalent to adding at least 170 million points out of thin air.
It is understood that the scores mentioned by Xiao E refer to the score rewards Xterio has issued in some past activities, and the official has promised that these score rewards can be exchanged for airdrop rights in the future, and users can obtain Xterio ecosystem scores through activities such as Meet your Anima (Palio), Overworld Arena and Dinoski (Age of Dino).
In addition to individual investors, other stakeholders in the Xterio value chain have also suffered varying degrees of losses. Previously, there were reports that a game studio was promised Gas refunds by the project side, and the studio used over 10,000 accounts to brush data, with 3 dollars of Gas needed to Mint each NFT, but it was not actually paid out. In the interview, an employee of a game studio told ChainCatcher that they had lost $80,000 on Xterio, but did not disclose the specific reasons for the loss.
The crypto KOLs have been voicing their grievances against the project during the Xterio TGE, becoming a prominent group in this turmoil.
The Bing Wa, who has nearly 60,000 followers, said he exchanged 30 U for 1 token, with an expected return rate of -97%, and a total loss of up to $300,000 (note: may be unrealized loss).
The big V "Aussie Lion Brother" with over 110,000 followers directly cursed, claiming that the project side had been PUAing the community for more than a year, and the community had spent money and time doing tasks, but everyone only got 20 million airdrops, while the project side released 15 million airdrops to themselves on the first day of TGE, "Now this airdrop has given me a very big psychological shadow about the so-called Web2 successful entrepreneurs coming to Web3." While accusing the TGE event of unfairness, he expressed his dissatisfaction with the team behind the project, reminding market participants to "disenchant" the entrepreneurial halo.
Ximen Zi said that the project founder Dong Ruibao often takes "unreasonableness" as his motto, and whenever something happens, he continues to PUA the community by saying "I just do things unreasonably".
The continuous "hammering" of KOL comments, the negative emotions in the community are spreading, and Xterio's reputation during the TGE period can be said to have plummeted.
Here is the English translation of the text, with the content inside <> retained without translation:
The True Face of the Crisis and Internal Chaos
In addition to the unfair distribution, the internal chaos of Xterio has also emerged in the crisis.
0xkunkun pointed out that Kelly was responsible for the listing and business negotiations of Xterio, but he was frantically hinting in the Telegram group that Upbit would be listed before the TGE, causing the floor price of the Small Dinosaur NFT to be raised to 0.6 ETH, and after the TGE was announced, the Small Dinosaur was directly smashed by the community to 0.15 ETH.
Mr. D (alias) said that the project staff openly shilled in the Discord, buying points at 0.3U (USD) per point outside the market, creating the illusion of high point value.
"Shilling yourself is completely illegal, it's like a listed company shilling and then their own employees buying it off-market, this is illegal." Mr. D said excitedly during the interview, but what still bothers Mr. D is the project team's unfulfilled promises, "The project team had promised to refund the acceleration cards, it cost 30U per account, I got a few, but when the promised time came, they just ignored it. I asked them, they just played dead, it's pure fraud!"
Some investors pointed out that there may be problems with the decision-making process within the project team, and Xiao Tao said: "The official released the token economics, and they (the project staff) also knew at the same time as us, which shows that the decision-makers didn't even discuss with their other colleagues, they just acted unilaterally!"
Within 2 days after the TGE, the Xterio official Discord channel was completely flooded with negative comments from the community, and there was a lack of official staff to soothe the emotions of the community members, until the evening of January 10th, when the conflict emotions began to ease with a new announcement.
It is worth mentioning that regarding the issues that investors and the community are generally concerned about (the 2% airdrop not being implemented), ChainCatcher sent an interview invitation to Xterio on the afternoon of January 10th, but as of the time of writing, no official response has been received. However, on the evening of January 10th (the same day the interview invitation was sent), Xterio released a new announcement on X addressing the compensation for Age of Dino players, providing more detailed information on the 2% XTER ecosystem allocation:
- 1% of XTER (10,000,000 tokens) will be distributed to Dinosty (Small Dinosaur) NFT holders, with the airdrop based on NFT holdings and a snapshot taken within 36 hours of the announcement;
- 1,550,898 XTER from the 777 NFTs in the treasury will be rewarded to users of the new game version to be launched in about 4 weeks.
- Game rewards: 0.5% (5,000,000 XTER) for Roar holders, based on a snapshot taken within 36 hours of this announcement.
- 0.4% (4,000,000 XTER) based on your skin collection points, with a snapshot taken within 36 hours of the announcement.
- 0.1% (1,000,000 XTER) based on in-game power rankings, allocated to the top 200 players. We will collect the top 100 players from Zone 1 and Zone 2 and merge them into an overall ranking.
- Claim period: January 14th 8am - February 13th 8am UTC (30 days). Any unclaimed tokens will go directly into the NFT pool.
After this announcement was made, the antagonistic emotions of the Age of Dino players were basically dissipated. According to the ChainCatcher interview, most Age of Dino players felt the announcement was helpful, but it was "just barely breaking even", while participants in Xterio's other two games, Meet your Anima (Palio) and Overworld Arena, are still in a state of hoping to maintain their rights - although the expansion of the maintenance group has slowed down obviously.
"Let's see what happens to the Small Dinosaurs on the 14th." said a community member.
"The AI points will also be distributed on the 14th," added Xiao E.
It is difficult to explore the true face of the crisis, but from the reaction of the Xterio team before and after the TGE event, the team did not carry out crisis public relations in a timely manner, leading to the current trust crisis, and a rift has appeared between the community and the project.
Whale Director Ruibao Dong Highly Centralized, AOD Suspected of Being a Rat Trap
Many investors told ChainCatcher reporters that the reason they were initially attracted to Xterio was because Xterio used the FunPlus team. FunPlus is a video game developer and publisher headquartered in Switzerland, with games including "King of Avalon", "State of Survival" and "Guns of Glory".
FunPlus provides the technical stack for Xterio. On the other hand, Xterio is the exclusive partner of FunPlus, responsible for issuing and deploying non-fungible tokens (NFTs) for all current and future FunPlus games.
In 2022, Xterio announced that it had raised $40 million, with the round led by FunPlus, FTX, Makers Fund, XPLA and others. When announcing the investment, Xterio said that FunPlus provides the technical stack for Xterio, and Xterio is the exclusive partner of FunPlus, responsible for issuing and deploying non-fungible tokens (NFTs) for all current and future FunPlus games - this shows the close relationship between FunPlus and Xterio.
The Xterio website shows that the platform currently has multiple games, with self-developed games including "Age of Dino", "City Shadows", "Overworld", "Palio", covering FPS, MMO, sandbox, casual and other categories.
An Xterio-related person told ChainCatcher that the current Xterio core team is mostly from Hong Kong, relatively exclusive, and only the core team has the right to share tokens, while other employees do not have the right to allocate tokens, and the token allocation right is firmly controlled by Ruibao Dong and Ryan Cheung, with Jeremy being basically marginalized.
"If it were Jeremy, he wouldn't have allowed the above things to happen. The Overworld rewards were just casually given away 80U, without any bottom line." the informant said.
Who is Jeremy?
Jeremy Horn is the co-founder of Xterio and "Overworldplay", and previously participated in the production of games such as "Harry Potter: The Mystery of Hogwarts", "Star Wars: Smugglers", "Family Guy: Finding Things", and "Marvel: Avengers Academy", with rich game development experience.
"Jeremy Horn at least understands token economics," said Xiao Tao.
"Although Jeremy is also bad, at least he would find professional consultants to help him design it," said other community members.
At the end of 2024, Ruibao Dong, the former Chief Strategy Officer of FunPlus and CEO of Qujia Interactive Entertainment, suddenly announced his departure from FunPlus, poaching some FunPlus members and fully investing in the Web3 startup Xterio, becoming the actual leader of Xterio, and published an article about it, which was reposted by FunPlus founder and CEO Andy Zhong, expressing support for Dong's entrepreneurship. Interestingly, before and after Dong's announcement of his resignation, FunPlus also broke out that it was undergoing a large-scale layoff.
The aforementioned Xterio-related person pointed out that on the day of the TGE, Dong set up a 6 million yuan AOD NFT fund, "I suspect this is to whitewash the rat trap. Because the scores of the main castle are just data."
Multiple community members expressed doubts to ChainCatcher about the existence of rat traps in Xterio's self-developed games.
When ChainCatcher reporters asked why Dong would do this, whether there was a behavior of dismantling the east wall to patch the west wall between the Web2 and Web3 businesses, the aforementioned Xterio-related person responded that there was no need, "I've seen Dong's wallet, he's a whale. He doesn't lack money, in fact he doesn't even need financing."
In fact, Dong has a brilliant resume in Web2. He once served as the Chief Operating Officer of NetEase, and according to his own recollection, the "Dream of the West" he led the launch at NetEase is currently the game with the longest global operation time. In addition to his achievements in the game industry, Dong has also crossed over to the financial circle, with more than 7 years of investment banking and investment management experience, managing nearly $100 million in venture capital. Prior to this, Mr. Dong had worked at Softbank China Fund Management Co., Ltd., Nomura Group, Iffco Securities Limited Investment Banking Department, and as an auditor at Ernst & Young.
"That's Ruibao Dong," the relevant person commented.
"He should never have researched the activities he launched, let alone make money, as real players have lost everything. He should have only looked at the false data, perhaps just to get listed on Binance, but unfortunately he still didn't make it in the end," said Xiao Tao.
