Services in kind is a pretty common business practice. You see this a lot at the SMB level especially outside of the US.
Small businesses are cash strapped. So you find someone who needs your services and you need their services. Instead of exchanging cash, you exchange invoices and do the work. You build them, say, a $5000 website, they perform, say, $5000 of landscaping.
At big boy levels this is often structured as “strategic partnership”.
The part that makes it not fraud is that both parties do actually do the work.
This feels very adjacent to the story about the whole town in debt, and the rich guy leaves a $100 bill on the table, [and so on], in a way that I can't quite put my finger on.
You can't put your finger on it because money is merely an accumulator and medium of exchange of economic performance. The performance of services in exchange for other services without money is a perfectly valid economic exchange that can and should be booked to revenue of each of the parties, if actually performed.
Loans without any economic performance of services generate circular meaningless cash flows yeah, but that's not the case when services are actually performed.
Loans are promises to pay. Business deals are promises to perform services or deliver goods. The difference is easily lost in the details even for accountants and economists.
The key realization is that it increases expenses at an equal rate as the revenue increase.
You get $5000 of revenue but spent $5000 on services.
You also have to pay taxes on that $5000 like other revenue.
So many small businesses will try to just exchange the services more directly in some way, or give steep discounts. (Tip: This doesn’t mean it’s entirely correct for tax/legal/accounting purposes, so don’t do big deals like this without consulting professionals. I’m just saying this is what’s done by some people)
> The part that makes it not fraud is that both parties do actually do the work.
The cheap criticisms of these deals always miss this part: something of value is traded for the dollars by both parties. Companies can’t simply circulate dollars between themselves.
If I spent $5k as a business to realize $5k in revenue the tax is zero (ignoring as you say sales VAT, etc)
The problem comes when the $5k you “traded” also didn’t cover the actual expense to provide the $5k you “earned” - now you have an actual loss even if cash didn’t flow.
I find this amusing: I'm from Poland, where after the VAT tax was introduced in the 1990s, there were famous "VAT carousel" crimes, with people ending up in prison. The basic idea was similar, except you also collected VAT refunds from the state.
If you search for "vat carousel" today, it seems this is still a thing.
VAT is a joke of a tax. It's quite incredible why the government concerns itself with chasing people's accounts around. What a waste.
If something can't be monitored with minimal effort, it only serves to enrich the legal/accountancy/hr/admin priest caste.
The amount of labour wasted on moving numbers around numbers is staggering.
edit: Between the government and businesses, VAT costs 5% in admin fees to raise. In a modern world where most transactions are digital, is this a great use of resources?
SEC calls this round-tripping. ASC 606 requires commercial substance — if both parties just book offsetting transactions, auditors flag the net cash flow as zero
They're already ahead of you; you have to consistently book revenue (accrual or cash basis) which means they both go at the same time (which would offset) or that real money is being exchanged. You can't accrue the 100 you're (supposedly) giving me now and THEN accrue the 100 I'm giving you next year.
What if instead of trading dollars I want to promise to trade dollars in the future? My investors need to see me capturing the market. Might even create some panic for added fun.
I remember in the couple years before the dot com crash in 2000, there was a lot of satire being written which was being taken very seriously. You couldn't tell what was serious and what was humor because both were absurd.
This took me far too long to figure out that it was parody. I'm sure some VC has at least thought of building a SEC Violations as a Service platform. This is truly the dumbest timeline.
Obligatory Michael Lewis quote, from Boomerang (2011):
> Yet another hedge fund manager explained Icelandic banking to me this way: you have a dog, and I have a cat. We agree that each is worth a billion dollars. You sell me the dog for a billion, and I sell you the cat for a billion. Now we are no longer pet owners but Icelandic banks, with a billion dollars in new assets.
The first economist says to the other “I’ll pay you $100 to eat that pile of shit.” The second economist takes the $100 and eats the pile of shit.
They continue walking until they come across a second pile of shit. The second economist turns to the first and says “I’ll pay you $100 to eat that pile of shit.” The first economist takes the $100 and eats a pile of shit.
Walking a little more, the first economist looks at the second and says, "You know, I gave you $100 to eat shit, then you gave me back the same $100 to eat shit. I can't help but feel like we both just ate shit for nothing."
"That's not true", responded the second economist. "We increased the GDP by $200!"
Well while the pile of shit makes it a joke, isn't there a real advantage here of legibility?
Like you have a measure (GDP) and it can't accurate measure things unless a sale occurs. So even if the money is a wash there was an actual activity occurring in the economy and now it's recorded.
For example, if you've ever wondered why useless art trades at such eye-watering valuations, the answer is that the high valuations are fictions that governments will accept for tax purposes, from which you can derive a variety of exciting tax consequences: https://naturalist.gallery/blogs/journal/understanding-the-f... more-or-less because they agree among themselves what the art is valuated at for their own benefit.
It’s a funny joke because it is truly happening (without the fraud as a service middleman). This sort of trade has been rampant the last few years in the AI and GPU space.
Services in kind is a pretty common business practice. You see this a lot at the SMB level especially outside of the US.
Small businesses are cash strapped. So you find someone who needs your services and you need their services. Instead of exchanging cash, you exchange invoices and do the work. You build them, say, a $5000 website, they perform, say, $5000 of landscaping.
At big boy levels this is often structured as “strategic partnership”.
The part that makes it not fraud is that both parties do actually do the work.
This feels very adjacent to the story about the whole town in debt, and the rich guy leaves a $100 bill on the table, [and so on], in a way that I can't quite put my finger on.
You can't put your finger on it because money is merely an accumulator and medium of exchange of economic performance. The performance of services in exchange for other services without money is a perfectly valid economic exchange that can and should be booked to revenue of each of the parties, if actually performed.
Loans without any economic performance of services generate circular meaningless cash flows yeah, but that's not the case when services are actually performed.
Loans are promises to pay. Business deals are promises to perform services or deliver goods. The difference is easily lost in the details even for accountants and economists.
That's a bit jumbled. You can gain clarity one level up the abstraction layer. Money is a note that means a debt is owed.
The man who saved Pumplesdrop By W. J. Turner
the last thing you should do in this scenario is book that as revenue. Of course I would never do this, but you could keep it off the books.
It depends if your goal is to sell the company or evade taxes, of course.
The key realization is that it increases expenses at an equal rate as the revenue increase.
You get $5000 of revenue but spent $5000 on services.
You also have to pay taxes on that $5000 like other revenue.
So many small businesses will try to just exchange the services more directly in some way, or give steep discounts. (Tip: This doesn’t mean it’s entirely correct for tax/legal/accounting purposes, so don’t do big deals like this without consulting professionals. I’m just saying this is what’s done by some people)
> The part that makes it not fraud is that both parties do actually do the work.
The cheap criticisms of these deals always miss this part: something of value is traded for the dollars by both parties. Companies can’t simply circulate dollars between themselves.
> You also have to pay taxes on that $5000 like other revenue.
Businesses do not pay taxes on revenue, they pay taxes on profit.
Other taxes may be applicable though (such as VAT or sales taxes).
If I spent $5k as a business to realize $5k in revenue the tax is zero (ignoring as you say sales VAT, etc)
The problem comes when the $5k you “traded” also didn’t cover the actual expense to provide the $5k you “earned” - now you have an actual loss even if cash didn’t flow.
There are jurisdictions in the US where businesses owe tax on revenue.
https://en.wikipedia.org/wiki/Gross_receipts_tax
https://en.wikipedia.org/wiki/Business_and_occupation_tax
Thank god, it's satire
https://web.archive.org/web/20260515043739/https://www.revsw...
"This is a parody website. Any resemblance to real companies wash-trading their revenue is purely coincidental and also definitely happening."
"Any comparison to OpenAI is totally valid"
I find this amusing: I'm from Poland, where after the VAT tax was introduced in the 1990s, there were famous "VAT carousel" crimes, with people ending up in prison. The basic idea was similar, except you also collected VAT refunds from the state.
If you search for "vat carousel" today, it seems this is still a thing.
I first hear about this from a guy running a warehouse. He noticed the same boxes commining in again and again.
VAT carousel is fraud. This is pre-legal.
VAT is a joke of a tax. It's quite incredible why the government concerns itself with chasing people's accounts around. What a waste.
If something can't be monitored with minimal effort, it only serves to enrich the legal/accountancy/hr/admin priest caste.
The amount of labour wasted on moving numbers around numbers is staggering.
edit: Between the government and businesses, VAT costs 5% in admin fees to raise. In a modern world where most transactions are digital, is this a great use of resources?
VAT is a regressive tax. It hits everyone along the way, rich or poor. It hits the poor especially hard proportionally.
The best bit of tongue-in-cheek is in the FAQ:
> We take 2% of every swap. Then we swap our revenue with another platform.
SEC calls this round-tripping. ASC 606 requires commercial substance — if both parties just book offsetting transactions, auditors flag the net cash flow as zero
What if they buy each other's NFTs instead?
offsetting in what horizon? I give you 100 in q4 2026 you give me 100 in q1 2027
They're already ahead of you; you have to consistently book revenue (accrual or cash basis) which means they both go at the same time (which would offset) or that real money is being exchanged. You can't accrue the 100 you're (supposedly) giving me now and THEN accrue the 100 I'm giving you next year.
You could but the other guy would have to book 100 of goodwill in the interim, matched by me booking goodwill later, and that brings it's own problems
Anyone else getting "SSL_ERROR_NO_CYPHER_OVERLAP"
Confirmed. Firefox and Chrome.
Visiting the website's url (revswap.ai without www) redirects me to revai.com which is for sale on godaddy... Fastest enshittification ever?
Yes. :/ GrapheneOS over here
I'm on firefox on windows.
What if instead of trading dollars I want to promise to trade dollars in the future? My investors need to see me capturing the market. Might even create some panic for added fun.
I remember in the couple years before the dot com crash in 2000, there was a lot of satire being written which was being taken very seriously. You couldn't tell what was serious and what was humor because both were absurd.
The FAQ is amazing....pre-legal haha
This is why substance over form is a thing in revenue accounting. Unless you're an American AI company ofc.
It's weird to keep referring to these AI behemoths as "startups".
They have no scalable business model that yields profit outside of raising more investment, so yes, somehow they are still startups
Let no one have the excuse of "this was so unexpected" once it burns down.
Reminds me a bit of the NFT parody site https://nfd.miami
Reinventing tax litigation from first principles
Never seen that particular SSL error before!
(Pending) Crime-as-a-Service
I don’t see anything topping the internet today better than this. Perfect, no notes.
I like this bit:
Read the whitepaper*
*there is no whitepaper
AKA YC companies buying from each other.
Some of the text can't be read if opened in Firefox with dark mode as default. Kudos to you guys for making it anyway!
What are the types of ARR the platform support?
Can it also generate SOC2 certifications in days?
They gotta become a platform, so likely more will come
I heard they started a hardware unit operating in stealth, but the rumor is they’re working on a box.
It’s down already. The fund exceeded its capacity.
Is there a way we can leverage the Gig Economy to book large gains?
This can’t be legal, can it?
This took me far too long to figure out that it was parody. I'm sure some VC has at least thought of building a SEC Violations as a Service platform. This is truly the dumbest timeline.
Obligatory Michael Lewis quote, from Boomerang (2011):
> Yet another hedge fund manager explained Icelandic banking to me this way: you have a dog, and I have a cat. We agree that each is worth a billion dollars. You sell me the dog for a billion, and I sell you the cat for a billion. Now we are no longer pet owners but Icelandic banks, with a billion dollars in new assets.
That's just a variant of this old one:
Two economists are walking through a cow pasture.
The first economist says to the other “I’ll pay you $100 to eat that pile of shit.” The second economist takes the $100 and eats the pile of shit.
They continue walking until they come across a second pile of shit. The second economist turns to the first and says “I’ll pay you $100 to eat that pile of shit.” The first economist takes the $100 and eats a pile of shit.
Walking a little more, the first economist looks at the second and says, "You know, I gave you $100 to eat shit, then you gave me back the same $100 to eat shit. I can't help but feel like we both just ate shit for nothing."
"That's not true", responded the second economist. "We increased the GDP by $200!"
Well while the pile of shit makes it a joke, isn't there a real advantage here of legibility?
Like you have a measure (GDP) and it can't accurate measure things unless a sale occurs. So even if the money is a wash there was an actual activity occurring in the economy and now it's recorded.
Except the GP quote actually happens.
For example, if you've ever wondered why useless art trades at such eye-watering valuations, the answer is that the high valuations are fictions that governments will accept for tax purposes, from which you can derive a variety of exciting tax consequences: https://naturalist.gallery/blogs/journal/understanding-the-f... more-or-less because they agree among themselves what the art is valuated at for their own benefit.
Domain is down?
Isn't this highly illegal, and worst of all: this is cheating taxes ...
Let's just say if you really want to commit crimes, don't start with challenging the IRS. Just don't. There's so many horror stories about that.
As the FAQ suggests, it's "pre-legal".
But it's all for mocking the current market... so.
Activities like this are a good sign of a bubble close to bursting. The circular deals Nvidia and OpenAI have done are good examples of this.
https://www.bloomberg.com/graphics/2026-ai-circular-deals
It's a joke
It’s a funny joke because it is truly happening (without the fraud as a service middleman). This sort of trade has been rampant the last few years in the AI and GPU space.
"This is a parody website. Any resemblance to real companies wash-trading their revenue is purely coincidental and also definitely happening."
I pay you a million dollars to eat dog shit. You pay me a million dollars to eat dog shit.
The result? The GDP goes up two million and we both have shit eating grins.
It's a bad example, because both sides actually got the entertainment they paid for and is totally valid economic activity.