The Cream Team: History of Suspicious Activity and Questionable Decision Making
CREAM Finance (Crypto Rules Everything Around Me) is a decentralized finance (Defi) project based on Ethereum blockchain, and is a fork of Compound and Balancer. Heading up the project is Jeffrey Huang aka Machi Big Brother, who besides owning a professional League of Legends esports team, was a member of the popular Taiwanese boy band L.A. Boyz.
This article looks at Huang’s projects, past and present, shedding light on a series of questionable undertakings and decisions, and acts as a warning for those considering investing in future projects.
Mithril:
Starting with a quick look at Huang’s previous project: Mithril (MITH). Described on the official website and across its social media platform as “the most widely accepted token in Asia”, the traded volume and coin ranking suggests otherwise. On the 12th October 2020, MITH had a daily traded volume of 600K and was ranked 681 overall in terms of market capitalization, with a total worth of USD 6M.
This excellent article provides sound evidence that Mithril engaged in vote manipulation to list on Binance. The article steps through how whales holding a large number of BNB tokens, the tokens required to vote for listings, were distributed to multiple Ethereum address to cast favourable votes for Mithril listings.
WIFEY:
WIFEY was a YFI clone that was later confirmed as a exit scam, with it’s colourful history documented by various sources. Central to the scam was CREAM Finance, where users had to stake yCRV for crYCRV on CREAM to get attractive WIFEY rewards. After a quick price pump, tokens were dumped on Balancer and the project was dead.
Code Audit:
The CREAM Finance code is based largely off Compound, and the Compound code has been audited. The CREAM code, however, has not been audited despite frequent calls from the community to do so.
A moderator of the channel Discord suggests that the code is being pushed through audits, however there have been no updates on the matter and no details provided on who is auditing the code:
On the 16th September, the team revealed that there was an input error for the number of rewards on the smart contract, with an extra 0 being added leading to 10x the daily rewards being distributed. While this wasn’t a smart contract bug, it highlights the potential for errors within the code and inputs by the developers, which should have created urgency for an audit. Instead, the team decided to burn 6 million CREAM tokens 5 days later on the 21st September, tokens which could of been used to pay for a code audit.
Transparency:
There is no road map, no team profiles, no link to the governance community portal on the main website. There is no indication on how governance proposals will be implemented and when.
SWAG Finance:
SWAG.live is claimed to be one of “leading Asian Adult Entertainment platforms” (remember the similar claim from Mithril) where users purchase diamond credits to exchange for exclusive content on the website. The author conducted extensive research to discover that many premium videos are readily available on other adult websites. Jeffrey Huang is the founder of SWAG.live platform.
SWAG Finance was launched on 3rd October, creating the SWAG token which will supposedly drive the governance of the SWAG.live platform as the team aims to “migrate the business fully on chain, to provide complete transparency”. There is no detail on exactly how the tokens will be used to govern the Swag.live platform from the perspective of profit sharing and development.
Xixi Huang is the Taiwanese lead on the project, and was also responsible for Shrimp Finance and Dice Finance, both projects linked closely to Jeffrey Huang’s CREAM Finance.
This is the latest project to be linked to the CREAM developers, with CREAM finance currently offering exchange between USDC and CREAM for SWAG tokens (remember the early adoption by WIFEY by CREAM), dropping all other exchange pools in favour of SWAG.
At the time of writing, there is a proposal being brought forward by the SWAG developers to allow SWAG to be used as collateral on CREAM Finance. A user on the Discord channel identified that at the time of launch, 10 addresses had balances of more than 20 million SWAG tokens each. These accounts appear to have been consolidated with now one address (0x3bcfa9357ab84baec04313650d0eebb3fd51070d) controlling almost 90% of the supply. There are also no details on if founder and developer tokens are locked or unlocked. This all points to a potentially devastating exit of SWAG tokens into established projects, destroying the value of SWAG and potentially CREAM.
Further to this, in a write up by Boxmining, the team claim to that they will not actively participate in governance, however on the very first SQUIRT (the terribly named mechanism for token holders to participate in community governance), 526 million tokens have voted. Considering that one address holds 555 million tokens out of a possible 625 million tokens, this would mean that the largest token holder, presumed to be a founder or developer wallet, has already participated in governance. These SQUIRT events also remunerate token holders, with the first SQUIRT offering 111,827 USDC as a pool for voters. The bulk of this rewards looks to be headed back to the founder / developer wallets with their participation.
Governance:
The community governance portal was launched quietly, with no Medium article or links from the main website. Casual holders are unlikely to know of proposals and therefore miss out crucial votes that govern the project.
On the 9th October, the community put forward a proposal remove the FTT token being used as collateral on CREAM. The vote resulted in users deciding to partially delist FTT.
During the vote, the official CREAM Finance Twitter retweeted comments from developers against the delisting of FTT. The team also retweeted comments from FTX CEO Sam Bankman-Fried (SBF), the developer behind FTT, who, without great surprise, was also against the delisting of FTT. The CREAM team, had a view, and despite being considered a community project, shared a particularly view widely on official social media accounts.
The most interesting part of this story is that SBF is a multisig holder at CREAM Finance, and would be negatively impacted by the removal of FTT. SBF allegedly used the CREAM platform to supply FTT tokens to borrow other tokens to sell, and if removed from CREAM, would not be able to continue doing so. These particular actions raise the question if there was a potential conflict of interests between developers / founders and multisig holders. Should a project that is community governed (or claims to be) support one particular view that may impact the activities of multisig holders?
Word of Warning:
The team behind CREAM Finance has a history of questionable and controversial decision making. However, the team has also had small wins, launching creamY, which was praised by Andre Cronje. The platform was one of the first on the Binance Smart Contract chain and is quick to list and add new and emerging projects.
These small wins do not offset a long list of of behaviour that some might view as intentionally malicious. There are good projects that exist in the Defi world that bring innovation and value to the space. Projects that involve Jeffrey Huang and his team however, do not appear to be so, with links to vote manipulation, close ties to exit scams, failure to address code audits and questionable governance and conflicts of interest. Investors would make an easy and wise decision by avoiding current and future projects linked to this team.
