Crypto and NFT is one big ponzi scheme. Who on earth is spending $000,000s on a virtual ship? I sense it is a case of somebody close to the NFT or virtual world buying the asset and making out it is a great thing and then selling it on quickly. Many a scam involves somebody from the group buying something so the unwilling feel like it safe. As always, don't be left holding the baby.
> Who on earth is spending $000,000s on a virtual ship? Money laundering?
The biggest crypto lending company is a ponzi scheme
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Re: The biggest crypto lending company is a ponzi scheme
#222Earlier quoted context omitted.
> Where do these high APYs come from? Well a lot of it is coming from incentives of these protocols and speculation in those native assets. But the author doesn't even know that, so I won't bother steelmanning his argument Is this not the very definition of a ponzi scheme? The returns coming from "incentives" of these protocols and "speculation" in those native assets sounds very ponzi-like to me.
If the yields are actually coming from speculation, it's not a Ponzi. Ponzis don't generate real yields, they just shuffle money from new investors to old investors. If it's actually making risky bets and winning them it's more like a hedge fund or something. Of course hedge funds don't have steady 10% yields, they lose money when their risky bets don't pan out.
That's essentially exactly what a Ponzi scheme is. You have an asset with 0 intrinsic value that only goes up in value due to new investors buying in.
You will only ever make more money if somebody buys in after you.
Unlike stocks where owning a share entitles you to profit stream of the company (intrinsic value)
Re: The biggest crypto lending company is a ponzi scheme
#223I don't really get all the "crypto is a Ponzi scheme" responses. This is about one company probably being shady with their books and claims. It's like saying Bernie Madoff built a Ponzi so USD is a Ponzi. Maybe crypto is a Ponzi, but this article is no evidence at all besides a hot market that provides the chum for sharks. It's very reminiscent of the housing bubble and the insane claims and over leverage (which is w…
Jealousy/FOMO/feeling like they missed the boat.
Re: The biggest crypto lending company is a ponzi scheme
#224Earlier quoted context omitted.
Not Celsius specifically but you can see details about yearn's strats here: https://docs.yearn.finance/getting-started/products/yvaults/... Specific vaults strats: https://medium.com/yearn-state-of-the-vaults/the-vaults-at-y... Links to the actual contracts: https://yearn.watch/
I just glanced through these and don't see any explanation. They basically just say "we put it in a vault and harvest the rewards". What I'm asking is where do the rewards come from. What is the underlying mechanism that makes this model sustainable. If you invest in a REIT, tenants earn money through their business and pay rents. If you invest in a BDC, the BDC makes loans to businesses and collects interest. Relati…
Some yearn vaults invest in liquidity pools that let users pay 10bps or whatever to trade one stablecoin for another. So the yield comes from that 10bps fee.
The sUSD yVault deposits sUSD into overcollateralized lending protocols and collects interest on loans to other users (who are presumably using Aave or CREAM as places to buy leverage to get super fucking long crypto). So the yield comes from other users paying interest to borrow sUSD.
Re: The biggest crypto lending company is a ponzi scheme
#225For those who believe "crypto is too big to fail", or the genie is out of the bottle, or that crypto concepts have become so engrained and popular that it's not possible to stop, I'd like to point out that Bernie Madoff's Ponzi scam lasted for 30+ years. People built entire lives on his very professional-seeming "business". Scams can go on for a very long time, and very large numbers of people can build their whole l…
Sure, let's talk shit about a new system that's largely censorship resistant (or trying to be) and call it the biggest scam in history (without any evidence) while praising the world's most authoritarian government. Hard to take you seriously.
Re: The biggest crypto lending company is a ponzi scheme
#226Earlier quoted context omitted.
Not Celsius specifically but you can see details about yearn's strats here: https://docs.yearn.finance/getting-started/products/yvaults/... Specific vaults strats: https://medium.com/yearn-state-of-the-vaults/the-vaults-at-y... Links to the actual contracts: https://yearn.watch/
I just glanced through these and don't see any explanation. They basically just say "we put it in a vault and harvest the rewards". What I'm asking is where do the rewards come from. What is the underlying mechanism that makes this model sustainable. If you invest in a REIT, tenants earn money through their business and pay rents. If you invest in a BDC, the BDC makes loans to businesses and collects interest. Relati…
I think the main answer to most of these questions is that everything works well as long as BTC and most others currencies continues to rapidly increase in value as a result of a lot of cash inflows into these cryptocurrencies. This papers over all of the fraud at least for now...
When the explanation is too complex for anyone to really grasp or verify, realize that this is probably intentionally opaque in order to hide the fact that it is either hugely risky, built on a house of cards or it may be just outright fraud.
Re: The biggest crypto lending company is a ponzi scheme
#227For those who believe "crypto is too big to fail", or the genie is out of the bottle, or that crypto concepts have become so engrained and popular that it's not possible to stop, I'd like to point out that Bernie Madoff's Ponzi scam lasted for 30+ years. People built entire lives on his very professional-seeming "business". Scams can go on for a very long time, and very large numbers of people can build their whole l…
Pyramid schemes like Rodan and Fields can go on forever, they will grow and contract over time, but there will always be a new group of people who are interested in getting rich. The mentality isn't much different than gambling at casinos I guess.
Re: The biggest crypto lending company is a ponzi scheme
#228Personally, I still feel that cryptocurrency in general is a net negative for the human race.
This viewpoint really discounts the experiences of those living in countries with rampant inflation or hyperinflation.
No, I'm aware of those situations. When I say "net negative" I don't mean "universally negative," I mean "taken as a whole given all available data."
Re: The biggest crypto lending company is a ponzi scheme
#229Clickbait title and no proof at all. HN hates all things crypto so much this gets upvotes even though the quality is less than Buzzfeed. Rates like these are absolutely possible to get using Defi, futures and so on. One example of doing it risk free (staying delta neutral) is by selling crypto futures contracts and buying the underlying asset to hedge. With that said, lenders like Celsius, Nexo, Crypto.com etc. shoul…
How can you read the whole article and say there was no proof? The article certainly provides plenty of evidence why celcius can't be offering the interest rates they're offering.
Re: The biggest crypto lending company is a ponzi scheme
#230Earlier quoted context omitted.
I'm not a huge fan of the the current cryptocurrency scene, but I think it will remain very useful as a medium of exchange and store of value in unstable parts of the globe for years to come.
Stablecoins will turn into CBDCs and CBDCs will serve that purpose. Bitcoin is down from 68K to 48K in the last what 3 weeks? Stores of value don't flail wildly and incoherently at the whims of a few whales, and given it supports 2-3 tx/sec using the energy of an entire country, it's a crap medium of exchange too. The future of crypto for anyone other than an anacap libertarian is CBDCs.
Even with its downsides, crypto serves as a useful medium of exchange for fringe goods. Digital (gaming) goods, guns and accessories, adult materials, and all kinds of things are flat-out banned at many payment middlemen (PayPal, Stripe, ...), and it causes problems from time to time even for large players.
CBDC's _might_ fill that void, but governments would need to treat it as infrastructure and not exercise some of the power that companies like Visa enjoy (blocking otherwise legal transactions).
To be fair, crypto hasn't really stepped up as being fantastic even for those fringe goods (insufficient adoption, painful user experience), but some utility still exists.