5 ms·

>Non-collateralized stablecoins read: "ponzi scheme". This is pretty funny.

bombcar 5y ago
You used to have to build your Ponzi scheme, now it builds itself and is fully automated. Such advances. Much technology. Wow.
- raziel2701 5y ago
  We truly are witnessing the next-generation of Ponzi schemes.
  - daaang 5y ago
    Is that related to IRON somehow? PlusToken was certainly a Ponzi, I don't see anything in this article that suggests IRON is/was one.
xqk8 5y ago
A Ponzi scheme requires a central actor like Charles Ponzi, you're quoting a description of a "purely algorithmic stablecoin" which implies no central actor to channel new investors' money to old, no central actor to defraud the new investors and by telling them they've gained money when they haven't. I guess they are comparable in the way that they both require a inflow of capital, is that what you're saying? That would make them similar to pyramid schemes and startups too. "Ponzi scheme" is more specific than "scheme."
- jonfw 5y ago
  A ponzi scheme largely refers to a scheme where you invest capital to get access to the future inflow of capital, where that future inflow of capital comes from other investors who are hoping to access future inflows of capital, etc. The difference between this and a startup is obvious- a startup intends to become financially independent at some point
  - xqk8 5y ago
    It certainly doesn't largely refer to that. It requires a central actor to defraud new investors, promise investors returns that haven't actually been realized, channel their money to pay off the old ones. If you read up on why it's named a Ponzi scheme you can understand how they work.
    - shkkmo 5y ago
      > It requires a central actor I see exactly zero existing definitions of ”ponzi scheme” that mentions any "central actor" so you seem to be creating an entirely new definition purely to avoid the "ponzi scheme" label.
      - RaketenStadt 5y ago
        Then you didn't look at wikipedia which mentions "the con artist" and "the operator of the scheme" several times. If you're having to google the definition of the term maybe there's still a little more you need to learn about it.
        shkkmo 5y ago
        I don't see either of those as at all synonymous with "central actor". I would consider all the founders and early investors who knowingly promote the ponzi scheme as con artists. I google the definition to charitably give your argument the benefit of the doubt. I don't see how you think phrases like the following make for effective communication or a strong argument: > If you're having to google the definition of the term maybe there's still a little more you need to learn about it.
        RaketenStadt 5y ago
        Why isn't "the operator of the scheme" synonymous with "the central actor?" Either: 1. I'm trying to dodge the label "Ponzi scheme" for a reason you haven't provided (maybe you think I have millions invested in this shitcoin?) 2. This isn't a Ponzi scheme, and you don't know what a Ponzi scheme is Which explanation is simpler?
- saalweachter 5y ago
  Technically it has to be run from the Ponzi region of France.
  - xqk8 5y ago
    He was Italian, C− for effort
- raziel2701 5y ago
  I think we're splitting hairs with the definition, it's not a ponzi but it acts like a ponzi. It's a weird distinction I suppose, I personally have no qualms calling it a ponzi scheme because new money is needed to pay old money.
  - xqk8 5y ago
    A Ponzi scheme without anyone running it isn't a Ponzi scheme. > new money is needed to pay old money WOW that's a broad definition. Turns out my 401k is a Ponzi! Do you know the difference between, say, a pyramid scheme and a Ponzi scheme? Or is "new money is needed to pay old money" the most nuanced understanding you have?
    - shkkmo 5y ago
      > A Ponzi scheme without anyone running it isn't a Ponzi scheme. Citation please. > Do you know the difference between, say, a pyramid scheme and a Ponzi scheme? A pyramid scheme can make money for all participants but makes much more money for people high on the pyramid. Rising up the pyramid depends more on recruiting skill than time of entry. A ponzi scheme doesn't actually make any money but merely redistrubtes money from later investors to earlier investors.
    - wombatpm 5y ago
      Your pension, if you have one is a ponzi. Your 401k is your money subject to special tax rules.
    - perl4ever 5y ago
      It's pretty common, in the US context, to call Social Security a "Ponzi scheme". The label is also controversial, but it should be an undisputed fact that people call it that, and it's obviously not particularly similar to Madoff's scheme. Similarly, it's not hard to find people calling (particularly public) pension funds Ponzi schemes.
  - bena 5y ago
    Forget "central actors" or whatever. A ponzi scheme is a description of a certain type of fraud. We can reduce it to it being the fraud of claiming new capital as investor dividends. It's a little more complex, but at its heart, that's what you got to do. If there is no lie about the source of the money, it's not technically not a ponzi scheme.
grey-area 5y ago
Tether is also non-collateralised, they just pretend the money is in ‘corporate paper’. All of these stable coins are a fraud.
tornato7 5y ago
FRAX has so far pretty successfully pulled off a partially collateralized stablecoin

You used to have to build your Ponzi scheme, now it builds itself and is fully automated. Such advances. Much technology. Wow.

raziel2701 5y ago
We truly are witnessing the next-generation of Ponzi schemes.
- daaang 5y ago
  Is that related to IRON somehow? PlusToken was certainly a Ponzi, I don't see anything in this article that suggests IRON is/was one.

xqk8 5y ago

A Ponzi scheme requires a central actor like Charles Ponzi, you're quoting a description of a "purely algorithmic stablecoin" which implies no central actor to channel new investors' money to old, no central actor to defraud the new investors and by telling them they've gained money when they haven't. I guess they are comparable in the way that they both require a inflow of capital, is that what you're saying? That would make them similar to pyramid schemes and startups too. "Ponzi scheme" is more specific than "scheme."

jonfw 5y ago
A ponzi scheme largely refers to a scheme where you invest capital to get access to the future inflow of capital, where that future inflow of capital comes from other investors who are hoping to access future inflows of capital, etc. The difference between this and a startup is obvious- a startup intends to become financially independent at some point
- xqk8 5y ago
  It certainly doesn't largely refer to that. It requires a central actor to defraud new investors, promise investors returns that haven't actually been realized, channel their money to pay off the old ones. If you read up on why it's named a Ponzi scheme you can understand how they work.
  - shkkmo 5y ago
    > It requires a central actor I see exactly zero existing definitions of ”ponzi scheme” that mentions any "central actor" so you seem to be creating an entirely new definition purely to avoid the "ponzi scheme" label.
    - RaketenStadt 5y ago
      Then you didn't look at wikipedia which mentions "the con artist" and "the operator of the scheme" several times. If you're having to google the definition of the term maybe there's still a little more you need to learn about it.
      - shkkmo 5y ago
        I don't see either of those as at all synonymous with "central actor". I would consider all the founders and early investors who knowingly promote the ponzi scheme as con artists. I google the definition to charitably give your argument the benefit of the doubt. I don't see how you think phrases like the following make for effective communication or a strong argument: > If you're having to google the definition of the term maybe there's still a little more you need to learn about it.
        RaketenStadt 5y ago
        Why isn't "the operator of the scheme" synonymous with "the central actor?" Either: 1. I'm trying to dodge the label "Ponzi scheme" for a reason you haven't provided (maybe you think I have millions invested in this shitcoin?) 2. This isn't a Ponzi scheme, and you don't know what a Ponzi scheme is Which explanation is simpler?
saalweachter 5y ago
Technically it has to be run from the Ponzi region of France.
- xqk8 5y ago
  He was Italian, C− for effort
raziel2701 5y ago
I think we're splitting hairs with the definition, it's not a ponzi but it acts like a ponzi. It's a weird distinction I suppose, I personally have no qualms calling it a ponzi scheme because new money is needed to pay old money.
- xqk8 5y ago
  A Ponzi scheme without anyone running it isn't a Ponzi scheme. > new money is needed to pay old money WOW that's a broad definition. Turns out my 401k is a Ponzi! Do you know the difference between, say, a pyramid scheme and a Ponzi scheme? Or is "new money is needed to pay old money" the most nuanced understanding you have?
  - shkkmo 5y ago
    > A Ponzi scheme without anyone running it isn't a Ponzi scheme. Citation please. > Do you know the difference between, say, a pyramid scheme and a Ponzi scheme? A pyramid scheme can make money for all participants but makes much more money for people high on the pyramid. Rising up the pyramid depends more on recruiting skill than time of entry. A ponzi scheme doesn't actually make any money but merely redistrubtes money from later investors to earlier investors.
  - wombatpm 5y ago
    Your pension, if you have one is a ponzi. Your 401k is your money subject to special tax rules.
  - perl4ever 5y ago
    It's pretty common, in the US context, to call Social Security a "Ponzi scheme". The label is also controversial, but it should be an undisputed fact that people call it that, and it's obviously not particularly similar to Madoff's scheme. Similarly, it's not hard to find people calling (particularly public) pension funds Ponzi schemes.
- bena 5y ago
  Forget "central actors" or whatever. A ponzi scheme is a description of a certain type of fraud. We can reduce it to it being the fraud of claiming new capital as investor dividends. It's a little more complex, but at its heart, that's what you got to do. If there is no lie about the source of the money, it's not technically not a ponzi scheme.

grey-area 5y ago

Tether is also non-collateralised, they just pretend the money is in ‘corporate paper’. All of these stable coins are a fraud.

tornato7 5y ago

FRAX has so far pretty successfully pulled off a partially collateralized stablecoin