The Anchor DeFi ponzi collapse journal

johnarb said:
You are thinking that things will collapse soon™️
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Not things, just THIS thing. Prediction: 1 year or less

The coin I can get behind is:

https://www.theranosco.in

Theranos Coin (LIZ) is an ERC-20 token immortalizing a story of revolutionary innovation and fantastic hypergrowth, stunning duplicity and scandalous fraud — the story of Elizabeth Holmes and Theranos.

Come on John, you know you want it! :)
 
Pekelo said:
Not things, just THIS thing. Prediction: 1 year or less

The coin I can get behind is:

https://www.theranosco.in

Theranos Coin (LIZ) is an ERC-20 token immortalizing a story of revolutionary innovation and fantastic hypergrowth, stunning duplicity and scandalous fraud — the story of Elizabeth Holmes and Theranos.

Come on John, you know you want it! :)
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You don't like Anchor Defi or Luna or UST, it's ok, Pek

There are many others, but don't go for the pump and dump, like Litecoin or Nano

Buy a Bored Ape and get the next airdrop landsale or Koda? NFA, but I'm in the process of doing this

I know you're being facetious on Liz :D
 
Pekelo said:
Forget about Anchor when you can invest in Yield Zilla, 2.5% DAILY returns! With a mere 1K investment you make almost 10MM by the end of the year:

"I believe there is a contest between Ponzi schemes for who offers the most absurdly high APYs. First Titano with 102,000%, then Safuu with 383,000% of APY. It's scary because some fools are betting tens of thousands of dollars on these blatant scams."
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Those are very very very very very risky projects and not the same as Anchor, Pek

I got rugged for over $30K on PulseDao, but I made $ on a different one, so it's ok

I did not learn my lesson, though, I'm on another one of those. The key is to know there is a time limit to the Ponzi and to get out in time

Lots of opportunities if you have the heart for it and the skill. This is a very difficult game to enter

upload_2022-3-27_0-13-0.png
 
Pekelo said:
In this thread we are going to journal the obvious, easily predictable collapse of one of the biggest DeFi ponzis called Anchor. And yes, it is a true ponzi. They promise 20% APR.

Discussion:

old.reddit.com/r/Buttcoin/comments/tk9r0r/the_anchor_defi_ponzi_scheme_continues_to_balloon/

Explanation post by DontMicrowaveCats

"The Anchor platform has rapidly become one of the biggest Ponzis in all of crypto (surpassing $16 billion worth of *supposed* locked asset value) https://app.anchorprotocol.com/

The premise is they offer an infinite fixed 20% APR yield to anybody who deposits UST on their platform.

They are supposed to pay for this through people borrowing UST from those deposits (who would pay interest back to the platform on it.)

However, of course there is a huge amount of deposits earning yield, while there is comparatively very few people borrowing to pay for it.

And even dumber, they only charge like 11% APR interest to borrowers. So it's impossible to ever pay for the 20% yield.

So what is happening is the platform's reserves they're supposed to pay depositor yield from is being rapidly drained every day.

I posted this 2 weeks ago showing the situation then. www.reddit.com/r/Buttcoin/comments/t8avwm/the_massive_anchor_defi_ponzi_is_rapidly_plunging/

At that time, the developers had just recently injected "$500 Million UST" into the reserve fund to top it up (just in time before it ran out completely) .

After just 16 days, the total amount of deposits on Anchor has swelled an additional $2.4 Billion UST. Meanwhile the borrow amount has barely notched up at all.

The reserves are being depleted by around $4-6 Million per day at this rate. If deposits keep going up, within just 8ish weeks the reserves will be totally gone.

Making the matter worse, there are other Apps like Degenbox which create infinite loops on Anchor, allowing users to constantly re-collateralize their UST yield to earn more APR. So the growth in yield-obligations is exponential. They can't stop this.

TL;DR - At the current rate, Anchor is once again just weeks away from completely depleting their reserves.

The developers can top it up again by burning LUNA to mint UST, but the system is beyond repair at this point without dramatically dropping the yield %. Collapse (and a run on UST) is the only way out."
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The Bitcoiners are split on this Terra LUNA-UST stuff

The project has bought close to $1B worth of Bitcoins and using for reserves-backing of the UST stablecoin

So as they print more stablecoins, they buy more Bitcoins, plan is to buy $10B worth of Bitcoins

This is fucking amazing!! Reflexive loop pump machine for Bitcoin

(it can also go in reverse which is what concerns the Bitcoin maxis)

https://twitter.com/x/status/1507728156094091264


Anyway...


 
johnarb said:
The key is to know there is a time limit to the Ponzi and to get out in time
More...

Now you are talking. But you know what I think of someone who knowingly enters a pure ponzi?

1. Either an ignorant moron who doesn't know it better.
2. Giant greedy asshole scamming others.

You have to have a talk with your conscience about which one you are...

And again, going back to Anchor, the problem is that the 20% APR is unsustainable. So just because the incoming money may have have had a positive effect on BTC, the outgoing money will have a negative effect. Money always leave FASTER than it comes in.
 
Pekelo said:
Now you are talking. But you know what I think of someone who knowingly enters a pure ponzi?

1. Either an ignorant moron who doesn't know it better.
2. Giant greedy asshole scamming others.

You have to have a talk with your conscience about which one you are...
More...


You make great points,Pek, but did not expect this side of you. I rarely get the chance to go beyond the quick few-liners and needed to appeal to high-level shallow reasoning

To quickly summarize without doing a very TL;DR on this

Tomb protocol-based projects are not real-ponzis. There is a use-case for the ones that are legit and not trying to scam people. They start with huge APR's in the beginning and prices of the tokens are very high due to low circulating supply

It's a seigniorage project so as it creates new tokens that get distributed to all the participants, the APR's come down, the prices come down

The project in my screenshot when I first started, the APR's were 50% per day, now down to less than 7%/day, the m2m value was profitable in the first few days, as prices crashed, m2m was negative, last couple of days, it turned positive

That shows you that if the project is not a scam, the design of the protocol is to reward the long term supporters

Sustainability? The original Tomb fork is still running and will be 1yo, albeit less APR's. The expansion of the ecosystem, i.e. multi-chain and dex and other projects ensure that it will earn fees and to be an ever-growing sustainable project

Another Tomb fork that is successful and has been sustainable for some time now is Mini-verse, expanding to gaming and NFT's

In summary, these projects are not ponzis but many are scams or many many do fail to deliver. High-risk and high-rewards

--------------------------------

Pekelo said:
And again, going back to Anchor, the problem is that the 20% APR is unsustainable. So just because the incoming money may have have had a positive effect on BTC, the outgoing money will have a negative effect. Money always leave FASTER than it comes in.
More...

I'm not an expert on Anchor but you have to understand that there's ongoing debates on the mechanics of this project

Terra Luna and UST are such a big ecosystem. From my (uninformed and ignorant) understanding, they are trying to create a successful algorithmic stablecoin, like DAI, using complex game theory mechanics, with burning and yields and now, Bitcoin as reserves backing

This is unlike the other stablecoins Tether and USDC who promise 1-1 $ fiat backing
 
Cool that there’s a journal about this. Hope you keep up documentation on Anchor news and Luna prices.

Luna is definitely an interesting strategy, akin to cash burn to create revenue without caring about margin in the equity world. Which is pretty risky but has created some absolute monsters (AMZN, TSLA).

I was initially on the fence about having LUNA exposure. How much of UST stakers understand that the yield will eventually drop, probably somewhere to low teen %s? I’d hope most of them, but how much of the capital is mercenary and will exit as yield lessens slightly?

Because of the size of the TVL and UST’s algorithmic tie to LUNA itself, whales might end up hurting themselves with too much slippage if they exit too rapidly and are invested in any other part of the LUNA ecosystem.

With the market caps that crypto junk like the endless OHM forks and meme coins like DOGE or SHIB can still command I’d probably say LUNA is not anywhere near overheated on a relative value basis in light of the real liquidity and associated utility this $$ burn runway has garnered. Will be interested if the rest of the ecosystem aside from Anchor can develop and get enough adoption to keep LUNA up the market cap rankings when Anchor stops burning as much money.
 
I wasn't aware of any news, this is what I have quickly found:

https://cointelegraph.com/news/ust-staking-goes-live-on-binance-as-anchor-reserves-fall

" there is a continued imbalance between borrowers and lenders, with 12.4 billion UST worth of deposits relying on income generated by just 3.47 billion UST of loans. Anchor must tap into its reserves to pay out its promised APY when this occurs. According to data from an unofficial tracking resource called Terra.engineer, Anchor has less than 340 million UST remaining in its reserves, compared to approximately 450 million UST last month. Despite the declining reserve count, the Terra development team is using initiatives such as injecting more reserve capital and launching more income-generating methods to maintain protocol. "

LUNA dropped from $118 to $98 in 4 days... But the whole crypto market has been weak, so that is not a sign itself.
 
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