You think think whole DeFi thing of "using this as collateral to mint that to use it as collateral" is #ponzinomics? Tell you what: traditional finance works just like that.

You know that right? Case in point

Let's talk #REPO market. Because that's the funding market in the world. Think of SUM(AAVE + MAKER + dYdX) multiple 10000000.

(OK, it's slightly different bc in the repo market, it's gov securities. But the idea is using assets as collateral to borrow against it.)

Collateral is an economy on its own. For the economy to grow, you kinda need more collaterals so it is redistributed throughout the whole lending/borrowing/repo market. Like R. Ratio in banks.

Instead of multiplier effect in econs, it's a collateral multiplier effect in lending.

#Ponzinomics in traditional finance is to use shitty junk bonds and crappy scamy securities to be part of the collaterals. Default happens, collaterals are worth nothing, hello GFC.

Funds run highly leveraged positions > Funds use (shitty?) stocks/bonds to get UST > BC best collateral is US treasury. Get maximum leverage w UST > and custody banks do this trade = getting paid to do this

Hence, demand for UST even when yield is a big sad face

#Ponzinomics in DeFi is to
(1) use shitty tokens as collaterals
(2) use tokens as collaterals to create new tokens to be used as collaterals for other tokens to create collaterals. Maybe it's not 100% ponzi, but it smells, looks and kinda tastes like ponzi. <- increase demand

Add to your weekend reading list: https://alhambrapartners.com/2020/08/18/part-2-of-june-tic-the-dollar-why/