> How does anyone justify these obscure tokens and coins being worth billions.

The Greater Fool Theory. This stops working when you run out of fools, but the notion of "there's another sucker born every minute" probably keeps the ball rolling for a while.

Sure, but I thought there could be no more greater fools in 2013, and again in 2017.

It is shocking how many fools exist.

In 2017/18 the "smart" money was early into ICOs and the "fools" are just getting into those over the past year. Meanwhile the "smart" money has moved on to DeFi and all that nonsense - DeX, yield farming (ponzi scheming), flash loans, etc. The next cycle you'll see smart money move onto something else, and they'll have figured out how to repackage DeFi to the average fool, which will come with greater linkages to the inherent financial systems.

What made the GFC such a massive bubble was how much the financial system was woven into Mortgages/CDOs. Crypto is not there yet, right now it could pop and you'd hear a few regretful stories and friends who lost a few hundred on the "Doge", but it wouldn't be a widespread disaster. Once you start seeing apps utilizing DeFi to enable average "fools" to purchase equities, fund home/auto/college loans etc that will signal a bubble with vicious potential.

Dogecoin purchases via Robinhood is probably the easiest we have right now to getting the average fool to trade their currency for memes, but that's still a small subset of gambling.

> yield farming (ponzi scheming)

There are a lot of ponzi scehemes in cryptocurrency markets, but you will have to expand on why you think yield farming is one of them.

The typical yield farming scenario is that users provide liquidity to AMM pools in exchange for LP tokens and accumulate trading fees on the pair while they HODL. The LP tokens themselves can often be staked on the DEX in exchange for governance tokens on that DEX (which may have other utility on the DEX as well).

Where is the ponzi scheme in this scenario?

Maybe it isn't a ponzi scheme (I'm no expert) but even after looking up all the acronyms (and maybe especially after looking them up) this sounds like an episode of Schitt's Creek.

But let me try to actually understand.

You provide liquidity to a pool in exchange for a token and accumulate trading fees, while maintaining ownership of your capital.

Ok, first of all this sounds like a bank. But it's decentralized? So what happens when someone has a majority of governance tokens on your DEX?

Yes, correct. First of all, you'd probably DYOR and ensure that the governance tokens at least have the appearance of being community owned rather than centralised, and secondly you'd probably need to ask yourself what having majority voting power on a governance token really offers. It's like shareholder voting power (which is typically held by a majority or a few majority stakeholders), you probably don't want to vote for something if it's going to throw all your other investors under the bus.

Stepping back from that, you need to understand that initially you're dealing with smart contracts. The governors can't fundamentally change the underlying aspects of the contract.

So let's say, "worst case scenario", the governors could decide to reduce the emissions rate of governance tokens on the staking pools you're interested in. Well, they haven't fundamentally changed the underlying contract, you can still unstake your LP token from the farming contract, withdraw your liquidity from the pool and end up with (some combination of) your original capital + any fees you earned over that time (impermanent loss is a topic for another conversation).

Actually as to my observation it's the same fools again every time, plus some new fools, with ever-deeper pockets.

This streak will break not when the maximum number of fools has been reached, but when the fools with the biggest wallets have gotten involved.

At some point would you not agree that there is a probability that you’re the greater fool here by dismissing the entire field?

> How does anyone justify these obscure tokens and coins being worth billions.

You might be misinterpreting market cap of coins.

Simple example:

- I create a new crypto called CRY

- I create 1 million CRY coins

- I have converted zero CRY coins to USD

- I sell 1 CRY coin for $1

- The market cap for all coins is now $1M

It's called leverage, unfortunately too many exchanges offer way too high leverage to people who might not fully understand what they are doing.

Right: https://www.binance.com/en/support/articles/360033162192

Uh, for most of these "obscure tokens" you can't get that kind of leverage. SHIB or SAFEMOON or w/e was worth billions before it was ever even listed on Binance.

nearly 10B in longs were liquidated on April 17th, exchanges give everyone way too much leverage with the tap of a couple screens

Retailer frenzy on top of a new technology alien enough that people don't understand it. If you think these coins are all there is, just wait until you see the thousands of meme coins that never took off.

Also keep in mind that these coins crash with very small amounts of money. The liquidity just isn't there.

The tether printer can print as much as they want.

I'm sorry, tether is fully backed by seriously real US dollars. I mean they released a pie chart and everything.

US YoY inflation was 4.2% last month with another $6 trillion in proposed spending. Alternatives to bitcoin are looking weak as well