from Hacker News

Why DeFi is not a Ponzi Scheme

by probe on 7/26/21, 9:22 PM with 25 comments

  • by BrissyCoder on 7/26/21, 10:47 PM

    It's a Ponzi scheme built upon a Ponzi scheme.

    Ethereum (and whatever other chains support smart contracts) literally only exist as a platform upon which to build Ponzi schemes.

    Sorry but I can't do anything with DeFi. It's just juggling more crypto around. I've had multiple tell me I can get a loan on it but this is just False for any practical reason. I can't say get a loan for a car and use the car itself as collateral like I can do at literally any bank. I have to put up 100% of collateral in crypto. It blows my mind that there are people on this site who are proponents of DeFi in its current form.

  • by jstx1 on 7/26/21, 10:19 PM

    Isn't security the biggest concern that's basically impossible to properly address in the current DeFi framework?

    You have a lot of money being governed by publicly available code with irreversible transactions. There have been a number of exploits in the past and there's no reason why they would stop. Why do people put their money in a system where everyone is a target and a bug can bring their entire balance to zero with no way to reverse it?

  • by billiam on 7/26/21, 10:48 PM

    OP says of growth in DeFI value: " I think it’s primarily driven from new entrants and solving problems." New entrants==Ponzi scheme. Also many fallacies about finance are stated as fact.

  • by emerged on 7/27/21, 12:08 AM

    They need to convince us it’s not a Ponzi scheme so we will put money into it so they make money off our money. Then all we need to do is convince some more people it’s not a Ponzi scheme.

  • by adolph on 7/26/21, 10:51 PM

    A rosy definition of DeFi:

    DeFi (or “decentralized finance”) is an umbrella term for financial services on public blockchains, primarily Ethereum. . . . DeFi takes the basic premise of Bitcoin — digital money — and expands on it, creating an entire digital alternative to Wall Street, but without all the associated costs (think office towers, trading floors, banker salaries). This has the potential to create more open, free, and fair financial markets that are accessible to anyone with an internet connection.

    https://www.coinbase.com/learn/crypto-basics/what-is-defi

  • by kleinsch on 7/26/21, 10:45 PM

    The space certainly seems full of Ponzi schemes and rug pulls. This article spends a lot of words carefully dodging around that.

  • by TheRealNGenius on 7/26/21, 10:28 PM

    It says something when you need to convince people what it isn't

  • by beders on 7/26/21, 10:21 PM

    It's a P0NzI sChEMe. Something completely different ;)

  • by 4512124672456 on 7/26/21, 10:36 PM

    Wow, this article is so right. Excuse me while I invest in <Coin named after meme based on another meme> with 1000%+ yield that comes from []. Tether? Never heard of it. Also, ignore the millions being lost in scams (https://www.rekt.news/).