Insider trading: State-of-Play

Does anyone know of (public) projects (in the broadest sense) looking at insider trading in the Substrate ecosystem? Here, insider trading means trading/transfers of tokens. I don’t have mind side-deals, related party transactions (HT @rich).

By “the broadest sense” I mean data, pallets, tools, websites, etc.

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You can add into that the dark markets that are inevitably emerging around paid influence, bought votes and side deals when it comes to treasury funding and financing.

There is plenty of historical precedent (this is not just a Polkadot problem, but a crypto industry one) and conflicts of interest abound in terms of the capital moving behind the scenes behind the theatre of “community governance”.

I’m working on a piece to outline some of the areas where I have been exposed to this directly by virtue of contributing to the ecosystem and in the proposal of spending.

TL:DR it’s a rats nest but people would rather look the other way since “everybody is doing it”.

Thanks, I’ll edit my OP to clarify that there is also a narrow sense to my question - token holdings and trading.

I’ll bear that in mind. Done properly one should be able to repurpose the tools from the traditional informed trading use case.

I wouldn’t be surprised. Having been involved in the employee-stock-options-are-free bun fight I learned not to ascribe to malice that which you could explain by stupidity. And I have seen a lot of that in the X-token (I don’t want this flagged :wink: ) is not a security debate. So I expect to discover the same is true of insider trading, related party transactions etc., etc. But as I say likely due to stupidity/ignorance before malice.

Post that here when you do. Hopefully, I’ll get to it before some snowflake flags it.

The deepest and most egregious issues are those that relate to the recirculating capital put to work in service of pumping and then dumping crowdloans and parachains.

This is a criticism of a system of incentives that leads to a steady degradation of “Web3 principles” rather than specific behaviour.

However if we’re going to actually air the dirty laundry (of which there is a lot) then this is the sort of “public good” initiative the ecosystem should be funding.

There are many stories, but people do not share publicly what they do privately, since economic incentives and social stigma combine to discourage any rocking of the boat.

Some of the most important stories published by the Guardian have come from anonymous or confidential tipoffs. If you have something sensitive to share with us, here’s how to get in touch. - How to contact The Guardian securely

Ironically perhaps, we can utilise Substrate’s tools and talent to initiate an investigative reporting unit, beginning by shining a light on the ecosystem’s own shortcomings.

This connects directly with the new narrative being perpetuated regarding “public service broadcasting” by The Kusamarian as part of their latest funding request.

The Kusamarian is a public service broadcaster providing a platform for builders, reporters, and community of the Polkadot Network.

If The Kusamarian is going to actually become “The BBC of Polkadot” as its supporters now claim as part of the funding propaganda, this would make me believe, rather than it being a useful populist LARP.

The fascinating question is whether this kind of vital journalism would also ensure the initiative ends up biting the hand that feeds…

I am drafting a W3F grant application to work out what is required for the Substrate ecosystem to surpass the current status in TradFi. We’ll see how it fares. I’ll link it here when I put it forward.

Yeah, over time I’ve moved towards the camp of “As long as it’s done transparently, it shouldn’t be illegal/stigmatized”. But the idea is to make the data readily available to any Substrate developer - what they or their DAO etc. do with it is out of my hands.

Agree, we should be funding the airing of the ups and downs of our tech with timely updates of everything that happens in it, to that degree the only one doing it with a good degree of professionalism is the Kusamarian, yes lots of opportunistic people came here to make some $. DYOR is way harder when you are coping with 40 different technologies, this provides a platform on up to date discussions. The Kusamarian does not caters to new entrants of the ecosystem, this caters to people building within the ecosystem, and the ecosystem community has been loud about it. Never the less his hard work seems to be coming to an end because of our perspectives.

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Just to clarify the edit I made to the OP.

What I am referring to is trading and holdings of ‘insiders’. IIUC, what is cited above about the valuable work (as I understand @rich) the Kusamarian is doing, is broader.
The two are often related, insiders selling in advance of adverse news, etc. However, I intended to refer to only

… projects (in the broadest sense) … Here, insider trading means trading/transfers of tokens.

After all the insider may have a legitimate reason for the sale.

I’ll make sure to emphasize this point in any proposal.

As best I can tell there is no such effort underway, so I’ll draft what I have in mind and post in a separate thread for comment.