Re:Kraken to end on-chain staking services for U.S. clients
by StanislavPetrov on Friday February 10, 2023 @12:44AM
(#34736072)
>Simple question: how is that guaranteed yield sustainable if not through a Ponzi scheme?
Let's say you buy 100 digital widgets from me. I promise you a 20% rate of return if you stake those widgets back. A ponzi scheme would require me to lure in new "investors" and take in new funds in order to pay you the 20% return you are promised. However, I can sustain this process forever without ever having a single new investor. I'm paying your APR in digital widgets, not any sort of actual currency. With the stroke of a key, I can create as many digital widgets as I need, and give you your 120 widgets after the year is up. However, there is no guarantee what your digital widgets will be worth - that's the rub. It might be characterized as a scam, but it isn't a ponzi scheme.
Let's say you buy 100 digital widgets from me. I promise you a 20% rate of return if you stake those widgets back. A ponzi scheme would require me to lure in new "investors" and take in new funds in order to pay you the 20% return you are promised. However, I can sustain this process forever without ever having a single new investor. I'm paying your APR in digital widgets, not any sort of actual currency. With the stroke of a key, I can create as many digital widgets as I need, and give you your 120 widgets after the year is up. However, there is no guarantee what your digital widgets will be worth - that's the rub. It might be characterized as a scam, but it isn't a ponzi scheme.