Some people use the term "ponzi scheme" for any project where the future payments are the primary source of funds for current payments.
In this definition, social security is a ponzi scheme because social security does not invest in anything. All payments are based on the project's ability to take funds from future workers.
Fiat money clearly falls into this category.
Needless to say, most crypto falls into this category.
I like your definition. Something becomes a scheme when the reward structure highly favors the initial investors over future investors.
If a person works at it; they can find a way to frame most investments with the term; so I really think that it is a matter of degree.
!WINE
Well initial investors are also taking more risk so the reward should reflect that.
Otherwise what is the point of taking the risk?
But gamified DEFI like this is heavily tilted because bigger investors can literally steal yield from smaller investors by design. That's a self-cannibalizing system because new investors are financially incentivized to not join.
But most of all I think what irks me is that... how will a project like this build value over time? It's a race against the unsustainable yields, and the unsustainable yields are going to win that race every time. On top of that as soon as the highest ranks get bored and cash out it's pretty much all over; constant sell pressure no matter what.
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