Disclaimer:
@financialadvice recently downvoted my post & attempted to get it removed thinking i'm pumping ONECENT. Let me be clear that this is NOT my intent. If you believe ONECENT to be a ponzi scheme, STAY AWAY! There is risk here, absolutely! But I do believe it's far too negatively charged and sensational to label the project this way when you consider how it actually is structured.
Refer to my last post here:
https://steemit.com/steemleo/@videosteemit/i-just-bought-5000-onecent-tokens
STEEMLEO platform is about investment conversation. And whether you believe capital is being intelligently placed or wasted upon investing is entirely a subjective standpoint. So here is my reply to the accusation my on my last post, and I would like to hear your input and get a guage of what others believe.
Here is my arguments as to why I do not believe ONECENT is a ponzi scheme:
- Profits until project end only come from selling your stake.
- The model itself does not proclaim you will make any profits that is guaranteed in any way. It does not promise some kind of guaranteed return from participating.
- The token itself is sold on a pre-determined escalator (ascending sell-walls) and that risk is made known thus putting the transparency out there for potential investors.
- Return's are not directly paid out from the investment of latter investors since income will be generated from funds received, and its intention is stated as much.
- How is this any different than an escalating venture capital ( VC) fundraising of a company that eventually goes public? If say Apple sold its shares on set amount of capital raises - ie. Series A financing, Series B financing, etc....
- We operate in an ecosystem where there activity can spawn returns based on future inflation. As this platform intends to maintain that activity to earn income, it becomes a return-generating business that benefits from increasing capital the more interest there is in the token itself.
- The project is run by a proven operator that has contributed to the STEEM ecosystem.
I would argue that the VC model itself is broken if you want to call this a Ponzi Scheme. It's easy to assert something to be a derogatory term without considering the relevant metrics on which it should be judged. But again, to each their own.
Final Thought
What makes us even consider this to be remotely similar to a ponzi? The fact that early investors benefit from their first-mover advantage? Is that really so uncommon in conventional investing?
I see a structured capital-raising venture with the expectations to continue as long as the community is willing to proceed. Yes, they benefit their earliest investors. But isn't that how things are supposed to function?
What are your thoughts?
Am I entirely off-base? Is it really that easy to dismiss this project altogether as being something deceptively negative?
Even if it is a Ponzi, each person decides if want to participate. People go to Casino regularly. It's their own decision and money.
I was in bitconnect and I'm not complaining.
People talk about free markets all the time but envy early investors or speculators.
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The operators are fine, I don't think they are likening their game to a venture capital investment. My beef is not with the game, it's for entertainment.
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I think it is so clear whether or not ONECENT is Ponzi.But what I find a bit suspicious is that it is not so clear how ONECENT is going to invest the money from the token sales. With escalating VC for e.g. Apple it would be a lot clearer what there are going to use the investment for. "All STEEM from the sale of ONECENT tokens will be invested in either the Steem Power of the game account, @onecent, or in other tokens that will generate income" sounds quite vague to me.
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Technically just powering it up alone participates in the inflation pool based on the rewards to steem power stakeholders. Even if it just left it there and did not do a single thing the account would be revenue generating. Keep this is mind. You might not like the structure of the entry distribution that capitalizes upon game theory, but it still doesnt sound clear to me at all if ONECENT is ponzi. For now, I'm still leaning towards it not being so when you think it out. I would say its got an intentionally unequal entry methodology, but this is far from being ponzi.
Posted using Partiko Android
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Yes but if they were to just power it all up they would still have to pay the earlier investors with the steem from the later investors just adjusted for inflation. It would just be a redistribution of the collected funds without any real revenue generating. I think that would be a bit problematic.
However I agree that ONECENT are not deceiving anyone about what they are doing which is a major part of a ponzi. So I tend to agree with you that it is not a ponzi. Nobody is forced to participate after all.
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I agree. And for what its worth, their upvoting of their own activity that they'll be posting about is one step further than merely sitting on the collected funds. But yes, some additional details would be appreciated as to how they'll proceed.
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The investipedia definition of a Ponzi Scheme states:
"The Ponzi scheme generates returns for early investors by acquiring new investors. This is similar to a pyramid scheme in that both are based on using new investors' funds to pay the earlier backers. Both Ponzi schemes and pyramid schemes eventually bottom out when the flood of new investors dries up and there isn't enough money to go around. At that point, the schemes unravel."
This is literally what that game intends to do, just because they are open about their intentions doesn't mean it's not a Ponzi scheme.
My downvote is nothing compared to your shameless self-promoting upvote. I simply disagreed with you rewarding yourself for promoting a Ponzi scheme game in an investing forum. If @steem.leo wants to attract serious discussion it can't have posts like these trending. People read this junk and think it's a place where promoting pump and dump Ponzi games is accepted as an investment discussion.
Regarding point 5. Please educate yourself, this is a not VC and certainly not comparable to AAPL. This is only profitable for the people who enter early.
The project isn't deceptive, it's a rather transparent game, you promoting it as a "buying a short-term money manager" was misleading.
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I recognize it's more of a Pyramid scheme than a Ponzi scheme but it definetely has elements of both. Regardless of what it is, likening it to a venture capital investment is unethical.
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Again, I have no problem with your downvoting based on your opinion. It's yours to have and your right to do so.
I'm curious why you left out that first part of the referenced definition, which the part you quote provides context for:
"A Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors. "
https://www.investopedia.com/terms/p/ponzischeme.asp
Of which this project does nothing of the sort. Without first proving this, there's no appropriate argument for the part you reference.
I never said this was comparable to Apple. That's foolishness. Just used an example of a company in the public domain and how they would have originally obtained VC financing through series capital raises.
You may not like my style of talking the way I want, but let's leave it at that. I welcome your curation (or lack of approval in this case). Agree to disagree.
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ONECENT is absolutely a Ponzi scheme, but not a malicious one. It's the reverse of those money sweeping machines where the coins stack up against the sweeping bar until someone gets it all.
The game is structured so that the last half of buyers (in STEEM-volume terms) is going to be paying the first half. When will that be? If you buy now, which half are you in? That's the game element.
It's a gamble. And given the rules, it's going to be fewer people at the end paying more people at the beginning.
So it's an interesting game to watch.
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