In life there are winners and losers, but in the Sirius Labs hackathon it appears there are only losers as it seems Sirius Labs are exercising a clause in their terms and conditions to restructure their prize pool down from $400 000 to about $33 000. I haven’t been in the cryptocurrency space for very long, but this definitely seems to qualify as a rug pull.
Basically the original prize pool on offer was as follows:
Grand Prize: $100 000
First Prize: 5x $20 000
Second Prize: 10x $5000
Third Prize: 20x $1000
This seems like a pretty reasonable payout structure, until you add it up (which I apparently didn’t) and realize it still doesn’t come to $400 000. However, what they are saying now is pretty shady. (Edit: This may be wrong, see Edit 2 at bottom of article. It looks like it did add up). This is the new payout structure:
First Prize: $20 000
Second Prize: 2x $5000
Third Prize: 3x $3000
I think you can see the difference here. From what I can tell they are planning on handing out about 8.25% of what they originally promised. That’s a pretty big difference.
This story is developing and I will be speaking to the “winners” of this hackathon. From what I can tell there were some really good projects there and none of them deserved this. I have also reached out to Sirius Labs for comment, and will update this if I get anything back, and I wouldn’t be surprised if Chia weighs in on it too. Watch this space for updates as they come.
**Updated with statement from Chia Network on Reddit** It looks like they plan on making the winners whole. That is very kind of them, and something they don’t have to do. But it is a good idea.
First off, Chia Network would like to congratulate all of the winners of the Sirius Labs Hackathon. We’ve been following the progress of many of your projects from the sidelines and are excited and happy to see the results that came from it, and look forward to seeing some of these projects go into production!
That said, it has come to our attention over the last 24 hours that Sirius Labs has begun to contact the winners with information that contradicts the expectations they have set over the past several weeks of the event, offering prize payouts significantly less than what was originally advertised. In some cases the adjustments are minimal, but in the most important case of the top winners, they appear to be significantly less by tens of thousands of dollars to be only 20% of what was expected, with a total overall payout of less than 10% of what was advertised.
Let me be clear… Chia Network cannot condone this behavior. While they may possibly be within their right to do this due to the clause in their hackathon rules about “all final prizing decisions being at their discretion”, it doesn’t match the spirit of what they have advertised these past weeks. While their claim that “The Grand Prize is separate from First Place and does not have to be awarded at all if no project is good enough to earn it.” is an argument that could be made in other spaces at the cost of bad press perhaps, not so in the world of Blockchain and Crypto. This space is already rife with scams, rug pulls, bad ethics and fraud. We take our mission very seriously to make Chia Network and the Chia ecosystem stand up above this and make our community a better, different place, from those. Therefore taking this position in the context of how they managed expectations publicly up until this point is unacceptable in our eyes.
As a result, while Chia was not directly involved with this Hackathon, the judging, or the prizing, we did provide training and documentation to help kickstart the project as well as tangential support via press and social media. Therefore we feel we have an obligation to step in and make the winners whole. Chia will therefore be paying out the difference in money to any prize winner who has had their expectations mis-managed, and is being offered less than what was initially advertised, to help make them whole.
We are very disappointed that the first ever Hackathon in the Chia ecosystem came to this, and the fact is we can’t manage and police every independent operator in this space like this as time goes on, especially when we are not involved. However, in this particular scenario we provided official support and guidance to the project and helped elevate it’s status, and so we feel this is the right thing to do in this situation. However, this is not something we can do every time this happens if we are not involved with the process, so we always encourage people to exercise caution and due diligence with these kinds of events in the future if the entities involved are largely unknown and untested.
Edit 2: I may have had the original payout promises wrong, and they did originally add up to 400k.