With the Ethereum Merge, where the second biggest cryptocurrency is moving from Proof-of-Work (PoW) consensus mechanism to Proof-of-Stake (PoS) consensus mechanism, many people are turning around and watching the PoS more closely.
While PoS is not something new and literally thousands of coins and tokens are using this consensus mechanism, each of them chooses their own rules and features. For instance, our featured token today, BnbRain, is a PoS token that describes itself as the token with the highest redistribution of BNB yields in the market. But is that really the case?
What is BnbRain?
BnbRain (BRAIN) is a decentralized cryptocurrency platform based on Binance Smart Chain (BSC) adhering to BEP-20 token standard. The goal of this project is to improve the whole ecosystem built around BNB, with the emphasis on Staking, Swapping and Farming.
BnbRain prides itself as one of the most “generous” cryptocurrency projects, as it offers 18% of BNB air dropped directly into the wallet of the user every 4 hours. It is thus one of the highest paying reflective tokens that offer dividend rewards for holding of BRAIN. These rewards are then paid directly to the user in BNB (which is why BRAIN is a reflective token). The longer the user holds BRAIN tokens, the higher the rewards are.
The high payout of 18% is allowed thanks to the auto liquidity function of BnbRain as well as passive disbursement yield. This means that every selling transfer will see a 18% fee redistributed amongst holders of BRAIN BNB. Thus, as long as the users hold their BRAIN tokens, they will be able to earn passive income.
According to the whitepaper of the project, BnbRain plans to become a one stop shop for the users who want to find everything connected to staking, swapping and farming. It also plans to become an educational platform with the aim of improving the financial security and literacy of its users, while becoming one of the best reflection coins in existence.
Features of BnbRain
To help this project with these courageous goals, the team decided to implement several interesting features that should help the project not only differentiate, but also become attractive for users. These are for example:
- Auto liquidity — 3% of each transaction are sent to liquidity on Pancakeswap
- Anti-whale system — transaction (Buy/Sell) that trade more than 1% of the total supply will be charged double the fee amount
- Redefining investment culture — improving upon the traditional investment approach composed of complex analytics and pattern recognition, the project aims to use a hybrid approach to innovation
Amongst other things, BnbRain is also a huge supporter of Proof-of-Stake. This is mostly due to the benefits that staking as well as this consensus mechanism offers, which were also outlined in detail in the white paper.
According to the team, the main reason why staking is advantageous is the reward that is generated as a passive income just by holding of the coin or token. Moreover, they expand on the benefits of staking as follows.
- No hardware is required — unlike Proof-of-Work there is no need for specific equipment or hardware for crypto holding. Proof-of-Stake works with no equipment requirements, making them more cost-effective, less expensive and less energy-consuming.
- Scalability — Proof-of-Stake staking protocols allows for higher transaction outputs and lower fees, improving the scalability of the whole ecosystem.
- Eco-friendlier — staking removes the need for continuously purchasing expensive hardware and consuming energy.
Tokenomics and tax distribution
As per the white paper, the initial supply of the token was 1 trillion BRAIN. This was distributed into three categories, with 60% being part of the initial burn, 34% being allocated to Liquidity Pool (LP) and the remaining 6% being allocated to marketing.
What is however more interesting is the division of fees, named “tax distribution.” Every buying transaction has a tax of 12%, which is divided into three categories: 6% BNB Reward, 3% Market Wallet and 3% Liquidity Pool. On the selling side, the transaction tax is 24%, with 18% going to BNB Reward, 3% going to Market Wallet and the remaining 3% allocated to LP.
Three huge red flags
Sadly, when it comes to this project, and many many others, there are countless red flags that the investors or potential users need to have in mind. In case of BnbRain there are at least three crucial warnings that anyone interested in this project need to account for.
Currently, the biggest issue with this project seems to be the inactivity of the whole team, and for that matter, of the BnbRain as such. The official website is not currently working, with social media and other channels being almost deadly quiet. This is definitely a negative sign for the community, users or the potential future of the project as the inactivity is not explained by the team.
This also affects the price of BRAIN token, which does not seem to be actively trading on any major exchanges or platforms. Any form of market data or tracking parameters of this token are flat or incomplete, showing a huge warning over the current as well as the future state of the project.
Hand in hand with the current inactivity also goes the roadmap that was highlighted in the whitepaper. While at the first glance it seems quite elaborate, upon closer review it is very clear that the team has only planned for the year 2021, without any details of what will happen in the subsequent future.
Thus, heading to almost the last quarter of the year 2022, the investors or users of BnbRain do not only know what happened in the past nine months, but also what is supposed to happen in the remaining three months or in the following year. Absence of clear and concise goals and plans is a huge warning.
Unfortunately, the whitepaper on its own was not the best written piece. It was full of grammatical errors, inconsistent descriptions and repetitive arguments. While it explained the project better than probably any other written piece out there, the quality of the whitepaper is far from sufficient.
Having poorly written whitepaper also reflects on the team as such. Due diligence, punctuality, correct wording, structure or introduction of ideas, is crucial in the explanatory parts of whitepaper. Once the team is not able to deliver on these in the best manner, one might simply ask whether they are capable of delivering the described and promised product.
BnbRain can thus be viewed not only through its plans and ambitious goals, but currently, mostly via its inactivity and incompetence. That is hardly at any point a sign of a solid project. With three huge red flags, the investors or users of the project should always be very careful with the decision of whether or not to put money or time into it. And in this case, sadly, it looks like the decision should be pretty simple, unless the activity from the team drastically changes.
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