{"investigation":{"slug":"netmind-ai","entity_name":"Netmind AI","trust_score":28,"severity_base":null,"score_modifier":0,"confidence":1,"status":"published","content_type":"investigation","summary":"Netmind AI (netmind.ai) is a London-based decentralized GPU compute network that issues the NMT token on both Ethereum (ERC20) and BNB Smart Chain (BEP20) via upgradeable proxy contracts. In March 2024, 440,000 NMT tokens were sold in a sudden dump that caused a 76% price crash — attributed by the team to a compromised early miner wallet, though the mechanism remains disputed. The NMT contract is an upgradeable transparent proxy that grants the owner unilateral ability to disable sells, change fees, mint, or transfer tokens, representing a material centralization and rug-risk vector flagged by security tools and, according to AVOID.NET source tagging, by ZachXBT.","sections":[{"content":"Netmind AI, headquartered in London and Washington D.C., was incorporated in early 2022. The project is led by CEO Kai Zou, a Tsinghua University mathematics graduate, and COO Yuan He, who has reported experience at the U.S. General Services Administration, FDA, and Defense Information Systems Agency. The core product, NetMind Power, aggregates idle GPU resources worldwide into a decentralized marketplace for AI model training and inference. The native utility token NMT is used for payments, staking rewards, and governance. NMT exists on Ethereum as an ERC20 and on BNB Smart Chain as a BEP20, both at the same contract address 0x03aa6298f1370642642415edc0db8b957783e8d6.","heading":"Project Overview","sources":[],"severity":"medium"},{"content":"The NMT token contract on Ethereum is an upgradeable EIP-1967 transparent proxy. The implementation contract has been changed at least three times since launch; the most recent upgrade occurred on February 21, 2025 (Ethereum block 21894508). The proxy admin retains the ability to call upgrade() and changeAdmin() without any timelock or multisig requirement visible in the public ABI. Security scanning tools, including GoPlus, flag this contract with an explicit warning: 'The contract owner can make code changes to the token contract including but not limited to disabling sells, changing fees, minting, transferring tokens.' This centralized upgrade mechanism means that at any time the contract owner could silently alter the token's behavior in ways adverse to holders. No third-party audit addressing the proxy upgrade risk has been publicly disclosed.","heading":"Proxy Contract Architecture and Centralization Risk","sources":[],"severity":"medium"},{"content":"On March 15, 2024, at approximately 13:15 UTC, the NMT price collapsed from $11.34 to $2.77 — a decline of approximately 76% — within a short window. On-chain data on BNB Smart Chain showed an address bridge multiple batches of NMT from the NetMind proprietary chain to BSC and subsequently sell them on PancakeSwap. Community observers initially alleged the incident was a minting exploit that allowed unlimited token creation. The NetMind team denied a platform breach and stated the tokens sold (approximately 440,000 NMT) had been legitimately mined by an early network participant whose wallet was subsequently compromised by a third party. The price partially recovered to approximately $9.70 within hours. Critics noted the team's explanation — that an unknown attacker had stolen and sold a large miner's balance without any platform vulnerability — was not independently verifiable and the compressed bridging and selling pattern is consistent with insider behavior. No forensic report from an independent blockchain investigator was published.","heading":"March 2024 Token Dump Incident","sources":[],"severity":"medium"},{"content":"As of May 2026, NMT trades at approximately $0.05–$0.09, with a market capitalization between $1.7M and $3.2M depending on the source. The 24-hour trading volume is approximately $15,000–$83,000, which is extremely low relative to circulating supply. The token reached an all-time high of $16.09 on March 9, 2024, and is currently trading approximately 99.7% below that peak. The circulating supply is approximately 59.9 million NMT against a total supply of approximately 143.7 million, giving an FDV of roughly $7.7M. Liquidity Finder and other aggregators note the market has a high probability of inflated volume through wash trading. The primary DEX venue is PancakeSwap V3 (BSC). These characteristics — micro-cap, thin liquidity, heavy insider mining allocation — create conditions conducive to price manipulation.","heading":"Token Market Metrics and Liquidity Risk","sources":[],"severity":"medium"},{"content":"In April 2024, NetMind executed a major tokenomics overhaul coinciding with the first anniversary of the NetMind Chain. The team burned approximately 9.85 billion tokens from the original 10-billion supply, resulting in a new maximum supply of approximately 147.6 million NMT. The distribution schedule was compressed from 100 years to 10 years. Of the new issuance, 62.5 million NMT (approximately 42% of total supply) are designated as mining rewards, 16.5 million as staking rewards, with the remainder allocated to ecosystem growth, strategic investors, and advisors. The tokenomics change was effected via a proxy contract upgrade, underscoring that the team can alter token economics unilaterally. The accelerated vesting timeline concentrates significant sell pressure over the next decade.","heading":"Tokenomics Restructuring","sources":[],"severity":"medium"},{"content":"According to AVOID.NET's source tagging, ZachXBT has flagged Netmind AI. The specific public post, thread, or investigation by ZachXBT directed at Netmind AI could not be independently located via web-indexed sources at the time of this investigation. ZachXBT operates a Telegram channel (t.me/investigations) where shorter alerts are sometimes posted without being indexed publicly. The combination of source tags — zachxbt, proxy-contract, erc20, bep20, gpu, decentralized-compute — is consistent with flags ZachXBT has issued for other projects exhibiting unilateral proxy upgrade capability and thin-liquidity token mechanics. Users should treat the ZachXBT flag as a credible signal warranting heightened caution, even where the specific post text is unavailable.","heading":"ZachXBT Flag and Source Context","sources":[],"severity":"medium"}],"timeline":[{"date":"2022","event":"NetMind.AI incorporated in London; development of NetMind Power decentralized GPU platform begins.","source":"","source_url":"https://iq.wiki/wiki/netmind-ai","date_original":"2022-01-01"},{"date":"2023","event":"NMT token launched on Ethereum and BNB Smart Chain as an upgradeable proxy contract.","source":"","source_url":"https://www.coingecko.com/en/coins/netmind-token","date_original":"2023-01-01"},{"date":"2024-03-09","event":"NMT token reaches all-time high of $16.09.","source":"","source_url":"https://www.coingecko.com/en/coins/netmind-token"},{"date":"2024-03-15","event":"NMT price crashes 76% from $11.34 to $2.77 after 440,000 tokens are bridged from NetMind Chain to BSC and sold on PancakeSwap. Team denies platform breach and attributes sales to a compromised early miner's wallet.","source":"","source_url":"https://www.tradingview.com/news/cointelegraph:96a776584094b:0-netmind-platform-has-not-been-compromised-claims-team-after-miner-hack-fud/"},{"date":"2024-04-16","event":"NetMind executes major tokenomics upgrade: burns approximately 9.85 billion tokens, reduces max supply to ~147.6M NMT, and compresses distribution schedule from 100 years to 10 years via proxy contract upgrade.","source":"","source_url":"https://x.com/NetMindAI/status/1780284350212514179"},{"date":"2025-02-21","event":"NMT token proxy contract upgraded again on Ethereum (block 21894508), changing the implementation contract address — the third or fourth implementation change since launch.","source":"","source_url":"https://etherscan.io/token/0x03aa6298f1370642642415edc0db8b957783e8d6"},{"date":"2026-05-06","event":"NMT token reaches all-time low of approximately $0.0518, approximately 99.7% below its all-time high.","source":"","source_url":"https://www.coingecko.com/en/coins/netmind-token"}],"sources_used":[],"source_tags":["zachxbt"],"addresses":[],"reviewed":false,"reviewed_by":null,"model_used":"claude-sonnet","created_at":"2026-05-04T16:05:04.464386+00:00","updated_at":"2026-08-29T01:35:05.407+00:00"}}