Stablecoin Ponzis Are The New NFT Grift

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It seems Do Kwon has discovered dynamite with his UST, Terra has gone from $3 to a high of $120 and now hovers around the $100 mark, what seems to be the primary growth factor has been the anchor protocol and the ability suck out supply to back a stablecoin known as UST. UST currently has a supply of 18 billion, meaning there should be around 180 million Terra locked up at the current value to back that.

In my opinion, it should be more as it needs to be over collateralised but hey what do I know? The demand for UST to earn the 20% on anchor encourages people to buy Terra, covert it to UST, and then lock it up to clip the premium.

An idea that, has obvious flaws which I've addressed previously but is the hot flavour in juicing your shitcoin price after the NFT market seems to have cooled off, one I also called a while back.

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Everybody, Yeah Yeah, Copy the ponzi, yeah yeah

Backstreets back alright

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You can see the copycats already rolling out in HBD and now USDD by everyone's least favourite crypto shill Justin Sun. Tron has been pretty much a cheap stablecoin moving chain and a gambling dapp chain and has been languishing.

Justin has been looking for a way to get back into the lime light and is clearly done copying Vitalik and now his keen on copying Do Kwon.

Since Tron has billions in circulation it will take more tokens to back his stablecoin and he claims he will start with 15 billion in USDD, which should suck up 200 billion in TRON to back that market, as well as liquidity pairs across the various DEX's run on TRON.

Sure this could adjust trons supply and juice the pumpa-mentals, adding some burning of TRON through his DEFI gateways and obviously wash trade on all these platforms can do wonders for the price short term.

It's all about attracting liquidity to your platform and the offers to do so, quickly become a pissing contest. 20% is already a stupid return that is grossly unsustainable but this is the competition, Do Kwon set the bar and now it's on everyone else to fight for liquidity by offering more outrageous rates.

The complexity continues

As more chains try to copy this technique you'll see more stablecoins backed by native coin pop up, like the NFT trade where these jpeg platfroms sprung up on different chains. I don't see this trend dying anytime soon as there is still a second layer of complexity that is likley to be employed.

Trading pairs and pools between these stablecoins bridged across each chain.

Yes you'll probably see something like TRON backing USDD and Terra backing UST

Then there is USDD on Terra and UST on Tron and pairs to trade between them. The complexity theature and risk will keep compounding in a desperate attempt to keep people locked in and promise them paper gains.

You'll probably see these stablecoin pools having massive APRs to keep people locked in and not to unwrap/burn their stablecoins to get the natve token so they can dump for fiat.

Shortening the lifespan of the trade

That may be the next leg but having all these chains competing with the same Ponzi, will shorten the life span of the Ponzi so you have to cook up additional layers faster to keep people involved as the yields go down.

How long can this con go on for? No one knows, but I am putting my theories out there and if I'm proven wrong, I'll be the first to admit it.

However, this frenzy has so many telltale signs of ones we've seen before and like the previous ones will leave as quick as it came, leaving a trail of broke investers in its wake.

Have your say

What do you good people of HIVE think?

So have at it my Jessies! If you don't have something to comment, "I am a Jessie."

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25 comments
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Interesting theory for sure. And we should be careful.

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Lol I doubt anyone is being careful, If they did, I wouldn't have to put out these posts for people to ignore

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I recently sold some LUNA thinking this whole thing is going to go POP at some point.

With Hive at least the HBD amount is so low we haven't seen our Hive pump yet.

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Lol it is popping well for Do Kwons account as the Terra foundation stacks bitcoin, I find it funny people say bitcoin now backs it, how? Are they using bitcoin to set a buy floor? No, it's all a story

I don't get the point of stablecoin savings and yield, you're still getting debased by the rate of the asset it represents in this case the dollar, sure it's better than most fiat currencies, but very few people are factoring that in, they're still on the fiat bus of I had one dollar now I have $1.25 so im winning

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like the previous ones will leave as quick as it came, leaving a trail of broke investers in its wake.

This seems inevitable as it gets more and more complex but maybe a few "solid" coins will survive.

All the bridging and cross chain stuff seems the perfect environment for people to get lost in, chasing the high APRs. It certainly takes a lot of management that's for sure. Not somewhere I'd spend my time but it's interesting watching from the sidelines.

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there will always be coins, that I sure of, but they will all have a lifespan, and when you add risk on top of it like gimmicks you're only shortening that lifespan. Chains are too focused on gaming the money and less on building anyhing people would use

Bridges to me don't make sense, since its either a custodian, like BitGo does for wBTC and other w assets on ETH so you have 3rd party risk, or it's a smart contract that can be attacked as we saw with wrapped ETH on Solana with the 300 million wormhole hack. Every bridge adds the ability to double-spend since its a two-way peg

I am happy to sit on the sidelines too and cry bloody murder lol

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Yes I noticed. It is the new fad. I think the finance, platform or currency doesn't matter for us humans , we will run ponzis everywhere,😷

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Lol the idea of getting rich quick is a hell of a drug abs when you can offer people something for doing nothing you’ll never run short of clients

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It's all a giant mess that will inevitably deflate.
Meanwhile, there are other Ponzis out there, making even wilder promises:

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And the answer is yes, people do really believe that this is sustainable. 😆

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LOL I always think of something Grant Williams said, if someone offers me 8% returns I'd run the other way because that would solve the pension crisis. I think people are just numb to numbers and don't understand math, the crypto market is just a natural evolution of how far you can go with disinformation

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This is why i'm now investing heavily in projects like the pulse chain.. I've deduced greed will destroy this space much like the type of capitalism we've practiced over the last 100 years is dying. So the only theory i can resort to now is suck up the funds from the not so smart people who going to get scammed and put it all in a non scam project like bitcoin myk, lol

Because they aren't going to stop. These people as dumb as rocks and i'm smart enough to exploit these systems. I hate to do it that way but you can't reason with mad men.. It's a reason why these type people exist in heavy numbers. So we can't save them all what's funny is that Richard Heart used the same reasoning to create the hex and pulse chain community.

Now is he really a scammer? Probably so i don't know.. What i do know is his reasoning worked. What he did get this.. Was created a project deliberately that looked like a scam. Then he got everybody's money just like he said he would. Then he supposedly donated over $27 million to life extension projects.

Now hate him or love him. Right or wrong that's atleast $27 million tha tdidn't end up in the hands of the scammers right?

Isn't it so sad we have to reason like this when you dealing with dumb people? It's bad but these people are incapable of stopping .. of understanding... they ignorant. they idiots.. So why waste time trying to convince them just take their money and create a good use for it..

Because i can name off several products in crypto that are good projects that get no funding no attention. These people too greedy to put their money in bitcoin because they want millions of percents in returns. So that's where we at.. Create a project that looks like a scam and do good with it problem solved, lol

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I don't see Richard as a scammer, he is a speculator and an opportunist, he is openly telling you nonsense and if you believe it that's your choice. I think him and many in crypto are just the cost of doing business, and the cost of learning critical thinking skills, a fool and his money will always part ways for some or other reason

What I see is any monetary network will constantly be attacked, be that the network directly or the individuals, theres always a weak link

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Yes i think Richard Heart exploits greed and that opportunist psychology so he's able to manipulate that. However i think it's a deeper rooted situation. if you go back to the 1950's to 1960's it's the era of families where you only need one earner.

So at this stage people live in an economy where it's alot more social cohesion between company and people and community. So that was the era where if your wife was pregnant your boss would go i need to give you a raise you having a baby. You wouldn't have to beg him for a raise. That's when capitalism in america worked the best.

The problem is by the time you get to the 1980's .. it's changed to the concept greed is good.. The idea of the selfish gene is in full effect. What else is in full effect is capitalism decline and it's road to destruction.

So the reason people move the way they move is because they are still under the false narrative that profit is more useful to them than social cohesion and companies, products or services that do good useful things.

The reason they choose the shitcoins is because they are still under the false idea that profit is better. Profit is not better if it were better the profit model would move our society to a more higher quality standard of living and it's not doing that because greed does not do that. That's why in the 50's and 60's companies didn't only adopt that quality .. but many other qualities and performed much better.

So it comes down to two ideas.. Either people are waking up to this and there is a natural bottleneck or delayed response.. or they still through lack of understanding believe profit and greed is good. Which is why they will select the shitcoins over bitcoin and lose all their money..

Why? because bitcoin greed index is much less and bitcoin is much more practical and solution based just like the social companies of the 50's and 60's than the shitcoins that promise 1600% returns a year, lol

I'll leave with this story @themarkymark of hive punk nfts... do you know how to catch a monkey?

You find something shiny and create an aperture where as long as the monkey's hand is open it can proceed in and out of this aperture.

However when the monkey @manniman latches on to the shiny item his greed won't allow him to release it.. His fist is now closed. Without an open fist the monkey is trapped @edicted

His greed and lack of ability to reason has become his undoing.

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I don't think profit is a bad thing, profit and price rises are a sign a certain part of the economy is undersurface and requires more resources and labour, its an indicator of inefficiencies in the market. I know this doesn't apply to the overfinancialised market but I think people are so attached to fiat figures they can't consider first principles

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Well i use to believe profit was a good thing.. i think it's many examples now of why it doesn't have to be.. I think gdp as a metric is an outdated measurement over the health and happiness of humanity.. For example. if i'm a business that's found a way to get rid of toxic waste by burying it some place and not paying dumping fees then i realize that over the next 10 years the environment will suffer as a result.

Then what i've done is basically taken the position of it would be "better'" for me to get rid of the toxic waste and harm the environment as i'll retain more capital.

So you may say well that's extreme and that's probably a bad idea not geared towards doing ethical or good business. You then scale that up or down and you're still on the same track of not making the world a better place. I believe profit is only good when it does both.. makes the world better and creates more resources. The problem is often times in the profit model we are getting an either or situation.. Either i fire you and not lose profits or i keep you and do regardless of what that does to the crime rate to our neighborhoods.

So i think profit is probably not the best metric of how business and government and society should run. I think you mazimize benefits by first taking care of the people. Investing in the people and in the longterm the people paying society back.

So if we take this nft thing.. marky mark selling nfts as much as $24,000.. a jpeg.. So buffet would say it's ridiculous and anyone in their right mind but he has a profit of basically about $24,000.. no workers earned anything no production was created.. nothing just air in a bottle. He thinks thats' good because it's profit.. now the guy who paid that much his chances of selling that for more money are probably slim to none. marky mark just unloaded essentially crap on somebody.. didn't make the world better didn't do anything..borderline scam

Is that good for society..absolutely not..it does no good.. only in the name of profit for the sake of profit and the same thing is what most companies are based on now.. Non human entities holding overcapitalized assets for no other reason but that So it gets complicasted but the metric is still dumb. it's why the ceo in the video did what he did because how his company was structured was the less beneficial situation for everybody in the company.

it's as dumb as saying i have a chain of restaurants and their are hungry homeless people on the street but the best alternative for me is to throw the food away because if i give it to them it has no market value.

You see how silly the reasoning has to become to maximize the best alternative for society.. Because even if you make a good argument about profit you still gotta make that argument make sense for the system to work. So i'm not saying surpluses are bad

I"m saying to set your business up on sheer profit is dumb.. The best economist in teh world would argue that the best system would be the system that gives you profit and social good. That's a system meeting it's maximum efficiency of use. .So why would anybody set up a system any different than that through deductive reasoning you just arrive at well that's stupid. i'm going to end up being the business that has to throw away tons of food just so i can sell it to this guy at a ridiculous price so the market determines it has value.

You could just as easily determined the market had value based on how many people got feed and helped and benefited.

So the argument typically is that well okay that sounds good but who's going to produce the food and what energy and etc.,.. but the level of food that can be produced is like over 10 billion people can be feed by the planet and we're still trying to fit a model that says the scarcity rate doesn't allow that to occur same as the energy .. So to get the models to work you gotta do all that lol

I'ts nonsense and malarky and most economist know that. Why? to fit an idea or concept or belief system.. a dying religion of sorts, lol. it doesn't make any sense it's just people wanting to hold on to a false nonsensical belief.

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I just quietly stack my HBD and move them through the Hive ecosystem and deal in USDC everywhere else and mind my business ... I learned a long time ago that chasing the hot new trend generally gets one burned and trampled...

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Lol very true, but that's what crypto is about, sucking people in through new hype cycles and leaving them poorer and then looking to a new hype train to get new targets in

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