Table of Contents
Introduction:
The market for cryptocurrencies has experienced an increase in the number of investment options in recent years; however, some of these chances have turned out to be fraudulent scams. The Generation Zoe (GenZoe) smart-contract cycler Ponzi scam is one of the most recent disputes in the field of cryptocurrencies. In the following paragraphs, we will go through the specifics of the Generation Zoe plan and discuss the takeaways that investors may get from it.
What exactly is the Zoe Generation?
Generation Zoe was a smart-contract cycler Ponzi scam that promised investors substantial returns via the use of a 2×1 and 2×2 matrix structure. The program was conducted on the Binance Smart Chain (BSC), and participants were needed to purchase participation in a smart contract known as Zoe Cash. In a few of days, investors were promised returns of up to five times the amount of money they first invested.
How exactly did the plan get executed?
Via the use of a smart contract hosted on the Binance Smart Chain, the Generation Zoe scheme was able to function. In order to participate in the Zoe Cash smart contract, investors needed to pay Binance Coin (BNB) to the address specified for the contract. When the monies had been collected, the investors were placed either in a 2×1 matrix or a 2×2 matrix, depending on the total amount that they had contributed.
Before becoming eligible for a return on their initial investment, investors had to bring in a total of one new investor for everyone they brought in themselves, creating a 2×1 matrix. The investor who was at the top of the matrix would earn a return on their investment that was equal to 200% of their original amount after they had introduced two additional investors. The other investor would then move up to the top of the matrix and get a return after two new investors were recommended. This would happen once two new investors were suggested.
Investors were expected to bring in two new investors each, who in turn brought in two more investors each. This continued until the matrix was full. After all of the spaces in the matrix had been occupied, the investor who had been placed at the top of the matrix would be entitled to a return that was equal to 500% of their original investment. After that, the remaining investors in the matrix would climb to the top of the matrix, where they would be eligible for a return once the matrix was once again completely filled.
The plan assured potential investors that they would get returns of up to five times the amount of their original investment in a matter of days. Yet, these profits could only be obtained if the Ponzi scheme continued to expand and new investors continued to put money into it.
Why is Generation Zoe a Ponzi scheme?
Since it depends on new investors to pay rewards to previous investors, the Generation Zoe operation is categorized as a Ponzi scheme. The profits that are being promised are not being created via legal investing operations; rather, they are being generated through the recruitment of new investors. The program is also not viable since it is dependent on a continuous influx of new investors in order to maintain the payment of returns to earlier investors.
A self-executing and unchangeable smart contract was used in the operation of the scheme. This kind of contract is known as a “smart contract.” Despite this, there is no way to tell whether or not the program is bogus. Since it enables con artists to automate the process of enticing new investors and delivering returns to previous investors, the use of smart contracts in fraudulent schemes has grown more widespread over the last few years. This trend is expected to continue.
The results of the strategy are as follows:
After just a little period of time, in May of 2021, the authorities put a stop to the Generation Zoe plan, which had only been active for a few weeks. Concerned investors were the ones who brought the scam to the attention of the Binance Smart Chain team when they detected abnormalities in the scheme’s functioning.
After the completion of an investigation, the Binance Smart Chain team located the contract address for Zoe Cash and froze the cash that was contained inside the contract. Also, the group got in touch with the relevant authorities and briefed them about the plan.
The important takeaways are:
The Ponzi scam that Generation Zoe was running should serve as a lesson to anybody considering investing in the cryptocurrency sector. The plan promised enormous profits by using a smart-contract cycler Ponzi scheme, but in the end, it was brought down by the authorities that were investigating it.
While making financial investments, traders and financiers have to use extreme caution, and before putting their money into any plan, an in-depth study must be carried out. In addition to this, they should be skeptical of programs that guarantee big profits.
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