[notahacker]

The gambling system has a house edge. It's a system which exists for the house to take money (in aggregate) off gamblers. The profits are real, and nobody pretends there aren't losers. Most casinos operate on this basis without requiring constant injections of further capital.

The stablecoin on the other hand claims that stakers are being rewarded for risking their capital without holders of the stable coin being fleeced at their expense. The only way to do this is by the number of people coming into the system expanding, and unlike the gambling system, the proposition of the stablecoin is these new participants don't lose money either. It has the classic Ponzi dynamic of being a zero sum game masquerading as a positive sum game through growth.

I guess a stablecoin could theoretically operate on the basis that "stakers" were supposed to enjoy average negative returns for the sheer joy of gambling like people on craps tables. That would be much more like your proposal, and would be far too truthful in its white paper to be called a Ponzi, though it might have trouble attracting gamblers compared with the glitz and glamour of the casino and all the crypto ways to gamble money that don't openly admit paying negative returns.

[charcircuit]

>Most casinos operate on this basis without requiring constant injections of further capital.

They mitigate the risk by settings caps to maximum bets. You can't just bet a bit more than half of a casino's assets in double or nothing with them. They don't want to be taking a 50% chance of losing everything. Even if there was a 2% edge that's still a 48% chance of it happening. They would rather work with smaller amounts where the chance of someone winning a ton of times in a row to eventually win everything is practically 0%.

>The stablecoin on the other hand claims that stakers are being rewarded for risking their capital without holders of the stable coin being fleeced at their expense.

They may be rewarded but they aren't being guaranteed that the value of what they hold will always go up.

Again a Ponzi scheme is a very specific thing. People make an investement and returns on that investment come from new investors. In this kind of stablecoin system there is no part that where that specific thing happens.

>were supposed to enjoy average negative returns for the sheer joy of gambling like people on craps tables

This is usually how algostables work. People bet on growth of the project and once growth has peaked negative returns will be coming. By trying to avoid this period of negative returns a depeg happens.

[notahacker]

> They may be rewarded but they aren't being guaranteed that the value of what they hold will always go up.

> Again a Ponzi scheme is a very specific thing. People make an investement and returns on that investment come from new investors. In this kind of stablecoin system there is no part that where that specific thing happens

The returns on staking do come from new investors. As you point out in your next comment, they turn negative after the project stops growing.

I agree it's not a Ponzi scheme in the narrow sense that some mountebank is telling stakers that they're being paid from the profit of nonexistent businesses before running off with the money. But the dynamics are identical: as you point out in the next post, the project depends on stakers earning rewards from its growth and the scheme collapses when the project stops growing and the stakers seek to avoid losses.

The dynamics of a casino are different: it doesn't promise its gamblers a positive return and thus doesn't needs constant capital injections to survive. Gamblers are service consumers, not investors and betting for entertainment that the wheel will stop on black, not for profit on the casino's ability not to default.