When the market stops answering
An exit scam is not a crash and not a hack. It is a market that stops responding with the keys to the escrow still in its pocket. This is what that looks like from the outside, and the two habits that keep the cost down.
What an exit scam is
The word is harsher than the event, and the event is simpler than the word suggests. A market that stops answering is a hidden service that no one is keeping up. The addresses still resolve to a routing path, but the path leads to a server that is not sending packets back, and the login page never appears. The coins in the escrow are still in the multisig script. They are just waiting on a signature from a key whose owner is no longer checking email.
That is the whole mechanism, and it is the one that makes a market different from a wallet. A wallet that stops answering is a lost phone. A market that stops answering is a bank that closed its doors on a Friday and did not leave a forwarding number. The difference is that the bank held the keys to your account, and the market is the bank.
The signs that precede it
- Support that slows down. A market that used to answer in a day starts answering in a week, and the answers get shorter. The staff is still there, but the work is piling up faster than the people.
- Vendors who stop finalizing. The orders sit in escrow and the finalize timers run out one after another, which is the market’s own machinery telling you the market is not watching it.
- Deposits that credit slowly and withdrawals that do not leave. The coins go in on the chain and the wallet does not move, which is the clearest signal there is, because it is the market’s own ledger saying the market is busy with something else.
- A quiet announcement. The one that says the market is restructuring, or migrating, or taking a short break. The word short is the word to read twice.
What it costs, and who it costs
It costs the people with balances. A buyer who paid and is waiting on a delivery loses the order. A vendor who shipped and is waiting on a finalize loses the sale. A buyer who withdrew the same day loses nothing, which is the whole argument for the habit of moving the coins out as soon as the order closes. The loss is not the coins, it is the coins that were still in the building when the lights went out.
The scale is the point. A market of this kind holds the coins of thousands of accounts, and the exit is not a theft from one of them. It is a single event that empties a lot of wallets at once, and the people who are hurt most are the ones who were treating the balance as a place to park coins rather than a place to keep them for a week.
The two habits that cost the least
The first is to withdraw as soon as an order finalizes, not at the end of the week and not at the end of the month. The escrow is the protection while the order is open, and the wallet is the risk after it closes, so the moment the order closes is the moment the risk moves, and the withdrawal is the move that follows it.
The second is to watch the support and the withdrawals, not the announcements. The announcements are written for the people who are still buying, and the support and the withdrawals are what the people who are still there can see. A market that is preparing to leave shows it in the speed of its own machinery before it says a word about it, and the machinery is the only witness that does not lie on purpose.