You clearly don’t know anything about what you’re talking. You proved that when you compared this to UST…
Comment on PayPal is Introducing a new crypto currency.
dhork@lemmy.world 10 months agoHow is a stabletoken pegged to the US dollar a “ponzi scheme?”
I think Do Kwon has a thing or two to say about that…
traveler01@lemdro.id 10 months ago
FaceDeer@kbin.social 10 months ago
The Terra stablecoin wasn't a ponzi. Even the Luna token that was used to back it wasn't exactly a ponzi. It may have been a scam, and it was certainly a bad idea, but the word "ponzi" means something specific and not just "I don't like that thing."
So, bearing in mind the actual meaning of "ponzi scheme," how exactly idoes PayPal's stabletoken fit it?
dhork@lemmy.world 10 months ago
Stablecoins can be Ponzis easily, because people hand over USD for tokens, and expect to be able to convert back at a later date. If the company keeps those USD in trust, that’s fine. If the company invests it all in the shitcoin of the week, and it all goes “poof”, and it can’t make up the difference, it will end up satisfying redemptions from other people’s deposits until there is no money anymore, and then it’s all worth zero. That’s a Ponzi.
This is what lots of people think Tether is doing, except that Tether can keep meeting redemptions.
You would think PayPal would have better controls than that, but who knows…