I'm interested in developing a list of questions/variables that are associated with Ponzis.
Here is my short list. Please add items to this list and I'll edit the post.
Ponzi Indicators
1. High rate of return
Explanation: ponzi schemes typically offer very high rates of return that are not possible. Anything that is > 50%/year APR is suspicious. Anything > 500% APR is very suspicious. Ponzis can offer lower rates as well (see Maddoff - 10% APR), but these are less common. ...
I would add that quoting interest rates weekly or monthly, rather than the proper annual rate, is a sure sign of an illicit scheme. It aims at very inexperienced investors.
I'll disagree with that for two reasons.
1: Most of the loans are denominated in weekly or monthly rates and the way bitcoin works, an annual rate is less meaningful. People don't look for 12-month instruments, 4 or 10 weeks is heaps (
months are still like years).
2: The APR system used in the USA is a very poor indicator that is quite confusing and misleading for non-US people - took me ages to work it out, and it is terrible.
In the WPW I settled on a one month equivalent rate to rank the interest or return being paid. Over one year, the difference between compounders and weekly payers would be huge.
^^^ That.... bitcoin is not (currently) like mainstream financial markets.