Popular Equity

abuse and defenses

There's money to be made through this service, and that attracts bad actors. Bad actors hurt the marketplace. Structural defenses against fraud help ensure the market can provide good estimates of individual venture value. Most of the structural defenses come from market transparency, explicit trading mechanics, and open input from users.

The overhead for bad actors should be high enough to make the platform uninteresting.

Because there will be gray areas, it's important for the natural failure mechanism to fall back to something like: money in, nothing meaningful happens, so same money out. In other words, the failure to generate a robust and diverse market to support a venture can happen for lots of reasons. It's important for the platform to quantify the robustness of the market, so that things that need to fail do so gracefully and transparently.

To motivate some of the approaches for security against abuse and outright fraud, it makes sense to spend a little effort thinking like a criminal. How would a criminal game this?

Pump and dump, baby!

The magical family fund that multiplies money (i.e. the investment club in nothing)

A neighborhood security nonprofit

Money laundering

How would Putin use this?

Defense is an ongoing process, but here are some of the structural defenses of the initial formulation:

Intentionally slow trades

Trusted/referenced listings and accounts

Transparency and exclusivity: public trading records

Real-time quality measures of market diversity and brand validation

Holding the cash

Whistle blowing and crowd-sourced escalation