UPDATE: After contacting Timeless Investments and Twire, the technical service provider of the collection, who was apparently largely responsible for the creation of the smart contract, the article was modified. The updates are in italic and underlined.
On May 26th, Timeless Investments announced their first own NFT collection together with artist Cro. The mint tokens were sold out after a very short time and were a real success for the company. 3 months later the reveal took place. From technical problems to NFTs that have still not been received, everything is included. The emerging success story is thus characterized by failure and the question of whether it was all just about making money can’t get out of your head. Below is a thread as to why the Carlito NFT ripoff story might be true.
What is Timeless Investing?
Timeless is the first company in the world to use blockchain technology to make it possible for everyone to invest in collectibles and thus participate in their value development. With this business model, the asset class of collectibles is to be democratized and the market for rare collectibles, such as watches, art and vehicles, is to be made accessible to everyone. Timeless, a brand of New Horizon GmBH based in Berlin, is a digital platform that verifies, acquires and then divides unique assets into shares that anyone can buy from €50 and trade with other users. The company takes on the custody, insurance and maintenance of the assets. Shares can be bought securely, conveniently and digitally via the Timeless app.
1,000 NFTs by Carlito – Cro x Timeless
As Carlito, Cro pursues another artistic expression besides music: he paints pictures. Therefore, Timeless decided to collaborate and tokenize the first artwork created for fractionalization, “Michelle”. Around 400 fans currently hold shares in this value.
Due to the groundbreaking success, two weeks later it was decided to enter into another cooperation with the artist Cro. This time the goal was to release an NFT PAP (Profile Art Picture) collection of 1,000 unique interpretations of Michelle.
Mint runs smoothly
The guaranteed mint for Michelle Holder and early access for Timeless users then started on July 5th. Furthermore, selected Premint Raffle winners could also claim a mint token. The Public Mint followed two days later. A short time later, the 1000 NFTs were sold out.
That’s why Timeless Investments celebrated the drop as a complete success and shared tweets like this one:
Public Reveal Goes Wrong – What Happened?
On August 25th at 10:22 p.m. the time had finally come. The mint tokens are finally revealed and everyone gets their NFT.
The story is over and everyone is happy. Unfortunately not . The first technical difficulties crept in even before publication. That’s why it was decided to add a second additional variable to make the metadata 100% secure.
So it’s only a matter of time before the reveal takes place.
After a few technical hardships, it’s done. The reveal came live on August 25th: “WE FINALLY MADE IT”. Or not?
After the alleged NFT Reveal, several members wrote in the Discord that there were significant problems. It doesn’t matter whether this has to do with a hidden NFT or whether some mint tokens are still not revealed.
Because the unsuccessful reveal caused considerable damage. Although the moderators of the Discord group try to downplay the incidents as normal, the affected investors still have to reckon with the consequences. These are listed in the next sections.
Damage was caused by the failed NFT Reveal. This is because the reveal was postponed by a month. So investors had to wait for the service they purchased on 05.07-07.07. Furthermore, due to cost savings, the mint token was changed and a new token was sent to the owners. According to some users, this was poorly communicated, which is why the mint token continued to be traded on Opensea. Unknowing people bought the mint token and were left with their money.
In addition, the question arises to what extent the claim of Timeless has been fulfilled. Timeless wants to ensure that every investor can invest in small amounts. Since the collection was allocated via airdrop, it happened that Opensea allocated the tokens under “Hidden”. As a result, most investors were unaware of the airdrop that had taken place. While Discord has been exemplary in trying to help these investors, investors who, for whatever reason, don’t own the Discord app have been left in the lurch.
Distribution of the NFTs to different wallet addresses
If you look at the distribution of the NFTs on Etherscan, several things become apparent. The largest address alone has 300 NFTs. This is due to the fact that Timeless Investments mined 300 NFTs themselves. Furthermore, the FAQ states that about 100 NFTs distribute the artists and contributors. This means that out of the 1000 NFTs, more than 400 NFTs were already unavailable in the first place. Thus, the collection that was available to the general public is limited to 600 NFTs.
It is also surprising that there are only 403 keepers in total. That means each address holds about 2.5 NFTs. If you subtract the 300 NFTs from Timeless and assume 700 NFTs and 402 holders, it is still 1.75 NFTs per address. A look at Etherscan also confirms this picture.
For example, of the 10 largest addresses behind Timeless, all 10 or more hold NFTs. So now the following question arises: Why didn’t Timeless Investments limit the mint to a certain number of tokens? If you assume that the collection, as Timeless writes on its own homepage, is aimed at Cro fans and its community, it actually makes no sense to allow an unlimited mint. Since the collection was limited to 700 NFTs, if you wanted to live up to your promises, you could have kept 700 fans happy with a Mint limit.
There are only two options for this decision. Either the demand for the NFTs was so low that you didn’t see any other option than doing an unlimited mint, or you wanted to use people’s fears to make money as quickly as possible.
The former is unlikely since Timeless should find enough buyers with 160,000 users. Furthermore, it is a cooperation with the artist Cro, who has more than 1,600,000 followers on Twitter alone. As a result, the second seems quite likely.
Distribution of the Carlito collection by Rarity
Another important aspect is the distribution of the collection based on rarity. After analyzing the metadata, the following picture emerges:
Now it plays a significant role in whether the mint tokens were revealed correctly or not. Because those who had access first could see the attributes of the NFTs and consequently buy the best ones. So on the 27th, the top 3 were bought away. This causes financial damage to those who did not have the opportunity to do so. As a result, they no longer have the opportunity to sell their own (poorer) NFTs.
Furthermore, it is noticeable that Timeless has both the best NFT (Carlito: 1) and 3 of the third best NFTs in the collection. This could be a coincidence as the chance is 30% due to the large quantity of 300 pieces, but it is unlikely.
It is much more likely that Timeless received the best NFT in advance to sell to investors in the app. It can therefore be assumed that there were no fair chances when the drop occurred and that small investors in particular made losses.
Regarding this, the moderators say that an unlimited mint is not uncommon. Nothing wrong with this one. Despite all this, more thought should have been given here. Because the collection is primarily aimed at fans who have not been properly served by the low number of drops.
How decentralized is the NFT project?
Since Timeless Investments, as announced, owns 300 NFTs, the question arises as to whether the project is still decentralized. Timeless assures the following:
“After 3 months Timeless is allowed to sell 25%, after 6 months 50%, after 9 months 75% and after 12 months 100%. In general, Timeless will try not to sell before 12 months have elapsed in order for the transaction to be tax-free. The impact on the price of NFTs is therefore positive as many NFTs are withdrawn from the market for months, making the collection appear smaller.”
The problem with the statement is that it is based on pure trust. So there are no obligations that Timeless has to fulfill with regard to a sale. Also, it is uncertain how many NFTs were distributed to the collection helpers. Timeless only provides approximate information here, which cannot be proven.
Unfortunately, this means that Timeless Investments has a major impact on the price. Therefore, the floor price of the collection is of little importance and should always be viewed with caution. At any time, Timeless can decide to sell 30% of the NFTs at any price, thereby defining a new floor.
Cro concert – more open questions
A key argument that Timeless keeps mentioning is that you can win tickets to a Cro concert in December. Five lucky winners are to take part in the Cros Homecoming Concer Experience in Munich. No information is given about the draws.
So this could be the next scandal. Since Timeless and employees own more than 40% of the collection, a fair draw is almost impossible. If this does not take place live in a video call, there is unfortunately every assumption that the work was not done correctly here either.
This point has not yet been addressed in detail. While it was confirmed that if an NFT owning Timeless Investments wins the ticket will be raffled to a shareholder, there is no specific plan as of how the raffle will finally take place.
Conclusion – Is Carlito NFT a scam?
There is no complete answer to this question. There are definitely enough signs. How can a company with 36 employees screw up a mint like that? How can it be that some tokens have still not been revealed to this day?
Thus, the following conclusion can be drawn. Something went wrong with the Carlito NFT collection. The fact that true fans were not offered any added value is a pity. For this reason, the collection can only be stamped with the Gelddruckerei stamp. If you had wanted a fair and sustainable mint, things would have had to be different. But just the fact that they chose to own more than 40% to influence the price shows that it was never about the community. Timeless investors are now suffering from this, and they became aware of the exclusive collection primarily through the newsletter. So in the end there is only one question left to answer: How can a company that appeals to so many customers host something like this?
There are a few things that went wrong with the collection. Both technical problems and the ignorance of investors were to blame for this. Ultimately, the question remains whether Timeless Investments or Twire had a duty to elucidate more here. Difficulties were reported on Discord, but unfortunately there is no public statement on the problems.
Timeless Investments – Another case of failed funding?
Timeless Investments was able to collect 12 million in funding with their business model. Despite all this, the site itself has little to show for it. So far, only two watches have been made with a profit and the money paid out to the users. The rest is currently being traded with other users on the marketplace at a profit or loss.
In itself, the page is therefore completely opaque. The assets are usually offered at very high prices in order to always achieve a positive effect. The probable price calculations are based on the past and thus give the impression that significant increases in value of similar dimensions must take place.
Therefore, it can only be said that the Timeless Investments offer is just as opaque and manipulative as the NFT collection itself. For these reasons, we strongly advise against using Timeless Investments or investing in the NFT Collection. Ultimately, despite the millions in funding, there could be an end similar to that of Nuri.
Here, too, a company took advantage of the new trends and fooled investors and users in general with false user numbers for years. Thus, caution is always required, especially with new startups, even if they have many users.
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