Executive Summary

We are currently at the verge of extreme transition from our traditional financial structure, towards a comparatively open and decentralized structure. A structure that ensures transparency and involvement from the members that are supposedly going to be most affected by the laws.

However, traditional or non-traditional, financial structures are intrinsically prone to frauds and mall-practices. The ill-practices include many different types of investment frauds; some of which are, Ponzi scheme, Pyramid scheme, Pump-and-dump, Advance fee fraud and Offshore scams. For the understanding of this particular project, we will present in-depth analysis of Ponzi scheme, Pyramid scheme and pump and dump frauds.

· Ponzi Scheme It is fraud practices in which fraudster invites people to invest in a particular scheme. It then requires money from new investors to pay back old investors. Ponzi scheme fails, when too many investors take out their money, or it cannot attract new investors. This strategy is a mere cash flow rather than efficient cash handling strategy to acquire gains.

· Pyramid Scheme In this fraudulent practice a hierarchy is made, such as of a pyramid. Fraudsters present this scheme as a multi-level marketing campaign to turning a small investment into a large investment; where participants can make money by bringing in new participants. This structure collapse, when the chain of participants breaks.

· Pump-and-dump It is a fraudulent practice in which a fraudster buy unworthy stocks and propagate about their worth highly and in the end sell these unworthy stocks at inflated prices, leaving behind a number of individuals stuck in the situation; who’d do the same in order to get rid of the stocks. This practice is called pump-and-dump strategy

As mentioned above, many people are aware of these fraudulent practices and are avoiding newer investment strategies just to avoid the possible damage that can occur if the new project turns out to be one of these fraudulent strategies.

In contract. Our aim is to provide crystal clarification to our readers that Hash20 is not like any of these aforementioned fraudulent schemes. Our platform is protected from malwares through third party auditing.

In addition to providing safety, Web 3, projects like ours possess features that DeFi lags in.

All Ponzi schemes and, pump and dump schemes have a centralized structure, where majority power llies with the master mind of the scheme. In such cases, the onwer of that structure has the ultimate power to exploit the users. On the other hand, in the case of decentralized applications, the power is completely transfered to the community. In this case, the decision making is tranfered to the hands of