[MadeThisToReply]

"Ponzi scheme" has become completely divorced from its original meaning. It's supposed to refer to a specific type of scam where you pay "investors" using the money you received from previous investors, but nowadays it's basically just used now to mean "anything crypto-related in which people might lose or have lost their money."

[4ggr0]

I think people refer to some cryptos as a ponzi scheme in the way that for a lot of coins the only reason that they have a value is that lots of people own them. So the strategy there is to buy low, try to convince or just hope that others will buy it as well, which drives the price up, then sell it when the price is up.

In that description the people on the top of the pyramid are just the early buyers or founders, and the later you buy a specific coin, the lower on the pyramid you are. When early whales start selling of their bag, you as a late-joiner will be left holding your own bag.

This of course does not necessarily apply to the minority of cryptocurrencies which have an actual use-case other than just existing.

[sepiasaucer]

A [crypto] Ponzi scheme is an investment fraud that pays existing [crypto] investors with funds collected from new [crypto] investors.

[detuur]

It's a "ponzi scheme" in the sense that you need to buy in early, find suckers to join the scheme after you, and only make a profit because the suckers you pulled in are pulling suckers in turn. If you don't get too greedy, you eliminate your position while it's profitable.

[CTDOCodebases]

When I see people use it in this context I think it just shows a lack of understanding.

To be fair I probably wouldn't disagree if someone said UST was a actual Ponzi scheme. Holding UST had no real utility compared to the alternatives. The only incentive to hold UST was the 20% APY. Deliberate or not it was a classic ponzi scheme.