An important discussion erupted today on X (formerly Twitter) after @Phyrex_Ni, an account holder for a major Chinese cryptocurrency investor, posted content stating that contract violations in Web3 projects, especially those listed on Binance, are alarmingly frequent. The message, posted at 11:10 a.m. UTC, follows a viral post by @Bitwux about the loss of contractual integrity in decentralized ecosystems.
Binance Web3 Project
In his post, Phyrex claimed that he has invested in and nurtured many crypto projects over the past year, all of which have signed formal contracts. However, he revealed that nearly every project released on Binance ends up violating such agreements. This issue has rippled throughout the Binance ecosystem. Chainalysis estimates that approximately 15% of new projects in 2025 will not be unlocked as promised.
contract spirit
Phyrex complains that Web3 has no judicial regulation, is slow and ineffective. He observed that one legal battle over a failed project lasted six months with little progress. Analysts agree that even with blockchain’s potential for transparency, smart contracts cannot be enforced in traditional courts.
Legal experts from Sheppard Mullin and Project binance Syndicate have verified that Web3’s lack of centralization provides investors with minimal options when a project exits a transaction. Informal reputation and community trust, or what Phyrex calls the so-called contract spirit, are important enforcement mechanisms.
KOLs are treated as “big green onions”
Phyrex’s post also highlights the fact that KOLs (Key Opinion Leaders) are being exploited, typically early investors and influential groups. He says the project team’s mission is minor (0.1% to 1%) but equally unsuccessful, viewing the project team as just a big leek, an ant with a howitzer voice.
Mr. Phyrex continued that while previously there was no avenue for victims to voice their complaints, improved networking and resources have led some investors to organize collective action. According to the report, Dao arbitrations such as Arbitrum DAO resolved 15% more cases in 2025 than in 2024 through on-chain arbitration. Phyrex likened investing in Web3 to gambling and was always prepared to lose money. CoinTelegraph went on to point out that currently only 20% of Web3 projects conduct independent smart contract audits before launch, leaving most investors exposed to untested and high-risk trades.
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