“Ponzi” the new fad word in r/CC


If you look back a year ago the word “ponzi” was almost never used in this sub. Now it appears in about 1/4 of the front page posts. It is just like DCA, which got way popular ~ a year ago during a decent dip.

Now the thing is most of the uses of the word “ponzi” are not actually using it correctly. The dictionary .com definition of ponzi scheme is “a fraudulent investment operation that pays quick returns to initial contributors using money from subsequent contributors rather than profit”.

Many users on this sub use “ponzi” in a different meaning. Older investors are able to cash out emissions when new users buy into the ecosystem and if new users dry up then the value of the ecosystem dries up.

The issue with this definition is that it makes every single token that has emissions a “ponzi scheme”. Earning emissions for providing liquidity is an integral part for many tokens to get a large liquidity pool. If existing users and new users stop buying the token the price will go down from the sell pressure of the people selling the emissions that they earned.

Now I get that a lot of cryptos are not sustainable and will eventually fail. People will be left holding bags and often that is the person who gets into a project once it is hyped vs the person that gets in early. I have learned in crypto that it is better to take incremental profits and potentially miss out on having a giant bag if it goes to the moon than be the person holding the bags.

submitted by /u/pbjclimbing
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