This penalty is fair because it upholds accountability in a space that is often exploited due to its anonymity and lack of regulation. In traditional finance, fraud and theft carry legal consequences—Web3 should strive for similar protections without relying solely on centralized authorities. By using on-chain evidence, such as the withdrawal of investor funds followed by abandonment of the project, the community can define transparent, verifiable criteria for blacklisting.

Such a system would serve as a strong deterrent to bad actors, making them think twice before launching malicious projects. It would also help protect newcomers and non-technical users from falling victim to scams, thereby improving overall trust and adoption. This enforcement could be managed by decentralized watchdog DAOs, using community voting and objective data to ensure fairness and transparency.