Unit 2 · Level 4 · Reading a token
Ponzinomics
In 2022, Terra's Anchor protocol offered a 'stable' 20% yield. The yield wasn't earned; it was paid from a subsidy pot the project kept topping up to attract deposits. When confidence cracked in May 2022, the whole system unwound and roughly $40 billion evaporated in a week. Unsustainable yield is a countdown, not a bonus.
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What you get asked
Anchor paid 20% on deposits. Where did that yield actually come from?
Real yield has a payer: a borrower, a trader, a customer. When you can't find the payer, the payer is the next depositor.
Order the classic emissions death spiral
The spiral runs on one flaw: the 'yield' is printed dilution. It works only while new money outruns the printer.
Yield that's secretly paid out of new buyers' deposits is the signature of a ___ scheme.
Charles Ponzi's 1920 trick still works because the early payouts are real, right up until the new money stops.
A project forces you to lock tokens for 12 months to earn the headline yield. What's the cynical-but-useful read?
Lockups suppress sell pressure while insiders stay liquid. Ask who can sell during your lockup. Often it's exactly the people who designed it.
A token launches with 5% of supply floating at a €2 billion FDV. What's the trap?
High FDV, low float is ponzinomics with extra steps: early buyers set a fantasy price on thin supply, and the other 95% arrives later, usually onto your bags. 🐜
The rest of this unit
Allocation pies, ponzinomics, and the checklist that spots exit liquidity.