Entropy: Controversy Over Fee Waivers and KOL Promotions Spreads

The controversy surrounding KOL promotions related to Entropy is linked to fee subsidies, referral rewards, and a new trading structure for unlisted stock futures. Factors contributing to the increase in KOLs include a lack of new projects, a $14 million investment from Ribbit Capital, the influence of Roger, arbitrage through fee subsidies, and potential point rewards from invitation links. Entropy acts as a market distributor based on Hyperliquid's HIP-3 and recently launched a perpetual futures market following a $14 million funding round. HIP-3 is structured to allow external distributors to open perpetual futures markets on top of Hyperliquid, with trade execution and margin processing utilizing Hypercore infrastructure. Entropy is closer to a derivatives distributor than a new coin issuer, handling unlisted stocks and real asset prices as on-chain perpetual futures. Currently, it attracts users through fee subsidies and claims that full fee waivers are possible with specific invitation codes. The invitation reward structure has also been identified as a background for the spread of KOLs, with KOLs reportedly viewing potential point rewards as more significant than rebates. However, if KOLs mention the same project, suspicions of paid promotions may arise. Perpetual futures are derivatives without expiration, exposed to price fluctuations, but operate with collateral, leverage, and liquidation conditions. From the perspective of Korean investors, Entropy is closer to a derivatives distributor based on Hyperliquid, with participation incentives focused on fees and points.

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