Xterio TGE controversy: Fraud, injustice, zeroing in... What happened to the former star project?

Written by: Arain, ChainCatcher

Editor: Nian Qing, ChainCatcher

"This is the first time I've seen someone lose nothing by brushing off their hair." Crow (pseudonym) commented in the Xterio rights protection group.

Web3 game R&D and operation platform Xterio was once a star project in the market. With its strong team background and abundant capital support, it attracted many investors to invest with real money. A netizen named "Little Man" wrote on On one occasion, I had a meal with someone from Xterio, and then we came back to share our positions. This meal was so expensive, I really wanted to cry.”

However, what awaits investors is the reality of widespread losses. On January 8, Xterio launched a token generation (TGE) activity. Investors' dissatisfaction due to losses continued to rise. As KOLs participating in Xterio continued to break the news and display loss data, the community's dissatisfaction suddenly aroused, and various The Xterio rights protection group is brewing vigorously.

Loss, fraud, humiliation... The dream of wealth was shattered, and the once dazzling star project seemed to have fallen from the altar.

TGE is full of doubts and the community is hammering Xterio

The founding team members of Xterio come from top game developers such as FunPlus, EA, and NetEase. At the same time, they have also received investment from well-known institutions such as Binance Labs, FunPlus, and FTX.

Compared with many Web3 native projects, Xterio can be said to be born with a silver spoon in its mouth. On August 30, 2022, it completed US$40 million in financing at a valuation of US$300 million. Well-known institutions such as FunPlus, Makers Fund, FTX Ventures, and XPLA led the investment, and many industry giants participated in the investment. Then on July 13, 2023, Binance Labs injected another US$15 million into it to support its game development and token launch plans in the fields of AI and Web3.

Based on the past sluggish performance of the NFT market, investors have already incurred losses on Xterio. An investor told a ChainCatcher reporter that he had purchased the Little Dinosaur NFT (from the self-developed game Age of Dino) launched by The time is below 0.3ETH.

It can be seen that losses are not the main factor that triggers community sentiment. The real trigger is the TGE incident on January 8, which completely ignited the powder keg between the community and the project:

Xterio officially released a token economic plan on January 2, planning to issue 1 billion XTER: 28% of which will be allocated to the community, and 20 million tokens will be fully unlocked in TGE; 26% will be allocated to the ecosystem, and 20 million tokens will be Fully unlocked at TGE; 15% allocated to investors; 12% allocated to the team; 9% tokens allocated for marketing, 15 million tokens will be fully unlocked at TGE; 4.25% Tokens belong to the vault, and 5.75% of the tokens are used to provide liquidity and collateral for TEG.

After announcing the token economic plan, Xterio also announced the rewards for Age of Dino in the TGE event, promising that Age of Dino will receive a 2% XTER token ecosystem subsidy during the TGE period. In addition, at least 8% of Age of Dino tokens will be fully unlocked and distributed to NFT holders and players during AoD's TGE.

After the TGE, many investors reported that the actual airdrop ratio of tokens was different from the claims. ChainCatcher conducted centralized interviews with investors after the TGE incident.

Xiao Tao (pseudonym) is one of the many losers. He is an Age of Dino individual player. In an interview with ChainCatcher, Xiao Tao said: "You airdrop and issue normal shares. If the currency price is not good, I will give you 0.5%. Airdrop, what is this but a fraud? This is a complete insult to investors!”

Xiao Tao showed ChainCatcher a screenshot of the airdrop contract address he took during the TGE project. "The airdropped contract has a total of 20 million tokens, and only 5 million airdrop tokens have been collected in the past day." Xiao Tao also told ChainCatcher, He invested 50,000 U in the Xterio project, fully expecting a huge return. However, reality gave him a heavy blow. In the end, the return on capital was only 4,000 U, and the loss rate was as high as 92%.

Investor Pengpeng said: "Judging from the situation of receiving coins, the team only airdropped 0.5% to the community, and embezzled the remaining 1.5%. Moreover, with so many activities and 10,000 NFTs, only airdrops were airdropped to the community. 2%. The project team went to the exchange to pledge the liquidity it should provide." Pengpeng showed another set of screenshots to ChainCatcher.

Siemens (pseudonym) calculated an account and said that 80% of the aforementioned airdrops should have been taken away by the project side: "Not counting AI points (Xterio cooperated with Bybit Wallet on an Xterio AI Agent points event at the end of last year), community players got it The approximately 3 million tokens also include the project side Mousecang, which has at least 1,000 dinosaur NFTs, of which more than 85%. It is a rare NFT and accounts for a large share. Therefore, after counting AI players, only less than 4 million tokens were actually received by the community, accounting for about 3.5% of the initial circulation of 112.5 million. "

Xiao E (pseudonym) pointed out another problem, that is, Xterio inflated data during the TGE, causing players' rights to be diluted. He shared a screenshot of his Telegram chat with Xterio’s business person Kelly to ChainCatcher. It can be seen that in the screenshot, he asked Kelly whether all the points will exceed 100 million, and Kelley’s reply was “unlikely.” , and in the end, Little E found that the points had increased to 270 million during the airdrop. Little E claimed that this was equivalent to an increase of at least 170 million points out of thin air.

It is understood that the points Xiao E refers to are the point rewards that Xterio has issued in some activities in the past. These point rewards have been officially promised to be converted into airdrop rights in the future. Users can use Meet your Anima (Palio), Overworld Arena and Earn Xterio ecosystem points for activities such as Dinoski (Age of Dino).

In addition to individual investors, other actors in the Xterio interest chain also suffered losses to varying degrees. Previously, it was reported that the game studio was promised by the project party to return gas. The studio used more than 10,000 accounts to brush data, and each mint of an NFT required 3 dollars of gas, but it was not actually fulfilled. During the interview, a game studio staff member told ChainCatcher that they lost up to 80,000 U (USD) on Xterio, but the specific reason for the loss was not disclosed.

Crypto KOLs successively issued X denunciation projects during the Xterio TGE period, becoming a prominent group in this turmoil.

Bingwa, who has nearly 60,000 fans, said that he exchanged 30U for 1 coin, with an estimated return rate of -97%, and a cumulative loss of up to 300,000 US dollars (note: it may be a floating loss).

The big V "Tu'ao Big Lion Brother" with over 110,000 fans directly criticized the project team, claiming that the PUA community spent more than a year spending money and time to complete tasks, and everyone only received 20 million airdrops, while the project team On the first day, TGE released 15 million airdrops to itself through the Making Share. "Now this airdrop has made me have a very big psychological shadow on the so-called successful entrepreneurs of Web2 coming to Web3." While blaming TGE While the incident was unfair, he expressed his dissatisfaction with the team behind the project and reminded market participants to "disenchant" the aura of entrepreneurs.

Siemens said that Dong Ruibao, the founder of the project, often uses "unreasonable" as his motto, and when encountering problems, he uses "I am unreasonable to do things" as an excuse to continue in the PUA community.

KOL's opinions took turns to "criticize", and negative sentiment in the community continued to spread. Xterio's reputation plummeted during the TGE period.

The true face of the crisis and internal chaos

In addition to unfair distribution, chaos within Xterio also surfaced during the crisis.

0xkunkun pointed out that Kelly was responsible for Xterio’s currency listing and business negotiations, but wildly hinted in the Telegram group that he would list on Upbit before TGE, which caused the floor price of Little Dinosaur NFT to be raised to 0.6 ETH. After TGE was announced, Little Dinosaur was directly criticized by the community. Hit 0.15ETH.

Mr. D (pseudonym) said that the project staff openly placed orders in Discord and purchased points off-site for 0.3U (USD)/point, creating the illusion that the points are of high value.

"It is completely illegal to place an order for yourself. It is equivalent to a listed company placing an order and your own employees will collect it off-site. This is illegal." Mr. D said excitedly in an interview. However, Mr. D was worried about this. What I still have in mind is something that the project team promised but was unable to fulfill. "The project team promised everyone to return the acceleration card. One account has 30U." I got a few for the cost, but when the promised time came, they refused to refund. When I asked them, they just pretended to be dead. It was pure fraud!"

Some investors pointed out that there may be problems in decision-making within the project team. Xiao Tao said: "The official announcement of token economics, they (project staff) also knew about it at the same time as us, which shows that the decision-makers did not communicate with other colleagues at all. After discussing it, I will be the dictator!"

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 calm down community members. It was not until the evening of January 10 that the conflict began to ease with a new announcement.

It is worth mentioning that in response to a common concern among investors and the community (the 2% airdrop has not been implemented), ChainCatcher sent an interview invitation to Xterio on the afternoon of January 10. As of press time, no official reply has been received. However, on the evening of January 10th (the day the interview invitation was sent), Xterio released a new announcement in X to make up for Age of Dino players. The announcement gave a more detailed introduction to the 2% XTER ecosystem allocation:

• 1% of XTER (10,000,000 tokens) will be distributed to Dinosty NFT holders. The airdrop is based on NFT holdings and will be snapshotted 36 hours after the announcement;
• 1,550,898 XTER from the vault's 777 NFTs will be awarded to users of the new game version when it launches in approximately 4 weeks.
• Game Reward: 0.5% (5,000,000 XTER) for Roar holders via snapshot within 36 hours of this announcement.
• 0.4% (4,000,000XTER) collected points based on your skin and snapshot taken 36 hours after announcement.
• 0.1% (1,000,000 XTER) is allocated to the top 200 players based on in-game strength ranking. We will collect the top 100 players from Zone 1 and Zone 2 and combine them into an overall ranking.
• Collection period: January 14th at 8am - February 13th at 8am UTC (30 days). Any unclaimed tokens will go directly into the NFT pool.

After this announcement, the confrontational mood among Age of Dino players has basically subsided. According to an interview with ChainCatcher, most Age of Dino players believe that the announcement is helpful, but it has "only just recovered their money." Participants of Xterio's other two games, Meet your Anima (Palio) and Overworld Arena, are still unaccounted for and are still in limbo. I hope that the status of rights protection will be improved -but the expansion of the rights protection group has obviously slowed down.

"Let's see what happens to Little Dinosaur on the 14th first," said a community member.

"AI points will also be distributed on the 14th." Little E added.

It is difficult to explore the true nature of the crisis, but judging from the reaction of the Xterio team before and after the TGE incident, the team did not conduct crisis public relations at the first time, which led to this crisis of trust and a rift between the community and the project.

Giant Whale Dong Ruibao's highly centralized AOD is suspected of being a

rat warehouse

Many investors told ChainCatcher reporters that the reason they were initially interested in Xterio was that Xterio used FunPlus’ team. FunPlus is a Swiss-based video game developer and publisher of games including Lords of Avalon, State of Survival and Guns of Glory.

FunPlus provides the technology stack for Xterio. Xterio, on the other hand, is the exclusive partner of FunPlus to issue and deploy non-fungible tokens (NFTs) for all current and future FunPlus games.

In 2022, Xterio announced that it had raised US$40 million, led by FunPlus, FTX, Makers Fund, XPLA and others. While announcing the investment, Xterio stated that FunPlus provides Xterio with a technology stack, and Xterio serves as FunPlus’ exclusive partner to issue and deploy non-fungible tokens (NFTs) for all current and future FunPlus games. This shows that FunPlus and Xterio Close relationship.

Xterio's official website shows that there are currently a number of games on the platform. Four self-developed games include "Age of Dino", "City Shadows", "Overworld" and "Palio", covering categories such as FPS, MMO, sandbox, and leisure.

Xterio related people pointed out to ChainCatcher that at present, the Xterio core team is basically Hong Kong people, which is relatively exclusive. Only the core team has the right to Tokenshare. Other employees do not have the right to allocate Token. The right to allocate Token is firmly controlled by Dong Ruibao and Ryan Cheung. In his hands, Jeremy was basically sidelined.

"If it were Jeremy, he would not allow the above-mentioned things to happen. The Overworld reward was just 80U, and there was no bottom line." The source said.

Who is Jeremy?

Jeremy Horn is the co-founder of Xterio and "Overworldplay". He has previously participated in the production of "Harry Potter: Hogwarts Mystery", "Star Wars: Smugglers", "Family Guy: Looking for Things", "Comic He has rich game development experience in Web2 games such as "Avengers Academy".

"Jeremy Horn at least understands token economics." Xiao Tao said.

"Although Jeremy sucks, at least he will find professional consultants to help him design." Other community members said.

At the end of 2024, Dong Ruibao, the former Chief Strategy Officer of FunPlus and CEO of FunPlus Interactive Entertainment, suddenly announced his departure from FunPlus, pried away some FunPlus members, fully invested in the Web3 entrepreneurial project Xterio, became the actual head of Xterio, and published an article on the matter , the article was forwarded by FunPlus founder and CEO Zhong Yingwu (Andy), saying he supported Dong Ruibao's entrepreneurship. Interestingly, around the time Dong Ruibao announced his resignation, FunPlus also revealed that it was undergoing major layoffs.

The aforementioned Xterio related person pointed out that on the day of TGE, Dong Ruibao set up an AOD NFT fund of 6 million yuan. "I suspect this is to whitewash the mouse warehouse. Because the scores of the main castle are just data."

Many community members expressed their doubts to ChainCatcher about the existence of rat warehouses in many of Xterio's self-developed games.

When a ChainCatcher reporter asked Dong Ruibao why he did this and whether there was an act of using the Web2 and Web3 businesses to make up for the west, the above-mentioned Xterio related person responded that it was unnecessary, "I have seen Dong Ruibao's wallet, it is a giant whale. He is not short of money and actually does not need financing.”

In fact, Dong Ruibao has a glorious resume in Web2. He once served as the chief operating officer of NetEase. According to his own memories, the "Fantasy Westward Journey" he led and released during his time at NetEase is currently the longest-running game in the world. In addition to his achievements in the gaming industry, Dong Ruibao also crosses the financial circle, has more than 7 years of experience in investment banking and investment management, and manages nearly US$100 million in venture capital. Prior to this, Mr. Dong worked in the investment banking department of Softbank China Fund Management Co., Ltd., Nomura Group, JF Securities Co., Ltd., and as an auditor at Ernst & Young.

"This is Dong Ruibao." Relevant people commented.

"He should never investigate the activities he launched. Let alone make money, real players will lose their money. He should only look at those false data, maybe just to get listed on Binance, but unfortunately he didn't get listed in the end." Xiao Tao explain.