As the market crashes, you may wonder if the coins you own are not just Ponzi. Let's go back to the Ponzi definition, according to Investopedia:
A Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors. A Ponzi scheme is a fraudulent investing scam which generates returns for earlier investors with money taken from later investors. This is similar to a pyramid scheme in that both are based on using new investors' funds to pay the earlier backers.
You may recognize some of the tokens in which you invested, which pumped only because new investors were coming, and dumped when there were not enough new investors anymore to pump it. We can give a few examples of Ponzi tokens:
- Wonderland's TIME: the price has decreased by 99.2% since the All-Time High
- Olympus' OHM: the price has decreased by 98.9% since the All-Time High
However, the Ponzi schemes can sometimes be very elaborated. For instance, it can be a new project promising to give 30% APY on a stablecoin, like on Tron currently. Although Sun can finance this Ponzi at the beginning by using his own money, he will then need new investors to make it work. Therefore, the question in such a case is: how long will it last? It can really crash after a few months, or, in the best case, the APY will be reduced like on Anchor...
The greed is your disease. You want so much to earn money, that you get attracted by the high returns promised by some projects, which are most of the time Ponzi schemes. As the market turned bearish, the high returns on USD stablecoins are particularly attractive. To avoid to fall into a Ponzi, the best thing to do is to come back to the fundamentals. If you started in crypto, it means you believe in it. Therefore, it makes no sense to sell all your cryptos for USD stablecoins and to place them on risky protocols which might be Ponzi. Take some distance with the market: which cryptos will still be there in 10 years from now? Which cryptos are not Ponzi? Once you have identified these coins, you can patiently accumulate them by buying the dips through DCA (Dollar Cost Averaging). Let's make some bets on the coins which are not Ponzi due to their utility, and which could be worth accumulating:
- ETH: the 2.0 has been delayed but not cancelled. Keep faith!
- MATIC: due to expensive gas fees on Ethereum mainnet, it still makes sense to use Polygon sidechain and its gas token MATIC
- SOL: despite multiple outages which are still scary, developers are working to make it more stable, and the beta phase will soon be over...
- ATOM: one of the best competitors of ETH, since it is convenient to build new blockchains by using Cosmos SDK and to transfer assets through IBC
- XTZ: in 2022 Tezos seems a bit old fashioned, however it constantly bottoms around $2-2.5, and hence it is quite easy to buy dips and then stake it
The list above is not exhaustive. We could also have mentioned BNB, CRO or EGLD. Please note that it is not a financial advice. Do your own research.
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