It appears that yield farming APY is largely derived from new buyers entering a pool with money inorder to sustain payments to themselves and other pool liquidity providers.

The APY is drawn from the added capital and used to pay investors.

External revenue sources are marginal and insignificant compared to xxx% APY which is impossible to sustain on stablecoin network fees which are below 0.1% per trade.

This is the definition of ponzi:

https://coinmarketcap.com/alexandria/article/what-is-yield-farming

https://www.investopedia.com/terms/p/ponzischeme.asp


"A Ponzi scheme is a fraudulent investing scam which generates returns for earlier investors with money taken from later investors."

I would advice against waves joining the DeFi mania based on its present form as this is not a healthy or viable business method.

You will gain short term user adoption and parabolic profit but cause long term damage to waves when the ponzi disintegrates.

My main concern is this toxic asset promising xxx% APY:

https://medium.com/swop-fi/where-is-swop-fi-pools-high-apy-coming-from-4fedca21cd86

But Bernie Madoff used ~10% APY for his long running ponzi and the stablecoins on waves dex are in this range so they must still be audited to confirm revenue source such as from trading fees.

Masternodes did this in 2018, I invested in alot of masternodes with a few thousand dollars and every single one of them was -99% 1 year later.

https://masternodes.online/

Masternodes was also a Ponzi because new investors were used to pay xxx% APY and the system collapsed when investors stopped providing liquidity.

Any scheme that focuses on hype this this level, where the main objective is promoting returns, is in the ponzi risk category.

DeFi could probably evolve to enable real user loans without liquidity risk but this APY is then similar to normal lending platforms that already existed for years. These loans must be locked on user account if there is no KYC or credit requirement, and the money can only be used to reinvest in specific cryptos.

I would definately borrow $20 000 with $200 monthly repayment to buy waves, it is 12% APY, Price would go into triple digit if this was enabled, it is realistic form of DeFi, why use ponzi when there is real possibilities with DeFi.

Liquidations is a source of big problems I discovered from using high margin leverageon Binance. To say that it is fraudulent is an understatement, I have never seen this dragnet level of investor fraud being perpetrated daily on Binance where big leveraged positions are wiped either by a neural network liquidation bot or chinese sweatshop workers.

As long as DeFi is as profitable in its current form, expect no real evolution.

But new investors deserve to understand that DeFi right now = ponzi

Lots of bs technichality and cool sounding names, still the same centuries old con artistry.

I always said that BTC community came from criminal origins with silk road, they simply evolved from thuggery into white collar crime.