The Tragic Collapse of a ‘Charitable’ NFT Project: What Went Wrong?

In November 2021, the nonfungible token (NFT) marketplace Orica entered the scene with a promise to be an “ethical platform” benefiting artists, collectors, and charities. The organization engaged in notable projects such as building a school in Uganda and aiding victims of human trafficking. However, less than two years later, the project collapsed, leaving behind allegations of a “rug pull” orchestrated by the founders. In this investigation, we delve into the details of Orica’s downfall and shed light on the truth behind the allegations.

The ICO Experience Amid a Bear Market

Orica launched its initial coin offering (ICO) from August 14 to September 14, 2021, with the goal of raising $3.1 million through the sale of its Orica (ORI) token. The ICO promised to allocate 50% of the total supply of ORI for “NFT marketplace rewards” and distribute 10% to advisors and partners, 15% to the team, and 25% to investors. Initially, the price of ORI surged to $3.638 per coin but subsequently plummeted to $0.036 by October 1, 2022.

Despite the decline in token value, the platform remained active, but its user base dwindled. Former users reported that the marketplace became less active, and eventually, the website and user interface went offline. The abrupt withdrawal of founders raised suspicions, leading disgruntled users to allege a rug pull.

Genuine Philanthropy Amidst the Chaos

Fortunately, amidst the collapse, the charitable efforts of Orica proved to be genuine. The project partnered with the Austrian charity project Bbanga to build a school for children in Uganda. The sale of Uganda-inspired digital art pieces as NFTs on Orica’s marketplace successfully raised more than the required funds to construct the school. In addition, Orica collaborated with the charity group Hope for the Future to sell NFTs and support its efforts in helping victims of human trafficking reintegrate into society.

Despite the platform’s demise, the funds raised for various charitable causes were processed through crypto donations processor The Giving Block. Artists who collaborated with Orica were also duly compensated for their work. It is worth noting that the team behind Orica made significant contributions to these charitable initiatives, donating 10% of their earnings.

The Mysterious Project Collapse

While the official narrative provided by Orica’s founders blames a hacking incident for the project’s collapse, users and blockchain data raise doubts about the authenticity of the claim. The migration of Orica from BNB Smart Chain to Polygon resulted in a lower total supply of tokens on the new chain. Some users reported not receiving their tokens on the new chain, leading to suspicions that their assets were mishandled.

Further investigation revealed that a separate account, allegedly operated by a hacker, gained ownership of a significant portion of the tokens and subsequently sold them through market-making operations. The project’s co-founder, Danial Zey, claimed ignorance of this act, alleging that his deployer key was stolen. However, he only reported the attack one month after it occurred.

Following these events, the communication channels of the project went dark, leaving tokenholders perplexed and unanswered. The team members involved in the project also became unreachable, heightening suspicions of foul play.

New Revelations: Denial and Suspicion

In a recent interview, Danial Zey denied the accusations of a rug pull and emphasized the complexity of the situation. He claimed that the team paid salaries to all members and covered liquidity, Certik audit, and development expenses. Zey stated that the project fell victim to severe hacking attacks, and the remaining team members are diligently working behind the scenes to recover from the situation.

However, the lack of transparency and the disappearance of key team members cast a shadow of doubt over these claims. Five out of the twelve team members involved in the ICO have deleted their LinkedIn profiles, including Zey himself. The absence of a clear explanation for the project’s demise has left many tokenholders feeling betrayed and left in the dark.

A Bittersweet Legacy

Amidst the collapse of Orica, the tangible impacts of the project’s charitable efforts endure. A school in Uganda stands as a testament to the funds raised and the positive outcomes achieved. However, the unanswered questions surrounding the project’s downfall and the lack of accountability from the team leave a bitter taste for investors and supporters.

While it is not uncommon for projects to face challenges and fail, Orica’s collapse raises concerns about the need for transparency, accountability, and investor protection in the cryptocurrency space. Investors should exercise caution and conduct thorough research before engaging with any project or token.

Editor Notes: A Cautionary Tale

The collapse of Orica serves as a cautionary tale for investors and participants in the cryptocurrency market. It highlights the importance of due diligence and skepticism when engaging with projects, especially those with promises of charitable contributions. As the industry continues to evolve, it is crucial to support reputable platforms and initiatives that prioritize transparency and accountability.

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