> When I first read this explanation in the OlympusDAO documentation, I laughed and laughed. “Well yes right,” I thought, “the way a Ponzi scheme works is that early ‘investors’ get rich as long as later investors keep buying more.” Sure, (3, 3). “If we all keep buying this thing its price will go up and we will be rich” is absolutely the main financial theme of 2021, but it is an irreducibly silly theme and I would be embarrassed to formalize it with game theory. > > But of course crypto people will happily tell you that fiat currency is the biggest Ponzi scheme of all, and they are not really wrong are they? Erdogan’s pitch is the same as Olympus’s: If we all stake our lira, we will all do well; if enough of us “defect,” we will all be in trouble. But of course that’s true of every fiat currency; it is particularly saliently true of the lira right now, but if everyone sold their dollars to buy euros (or Bitcoins, or OHM), that would be bad for the dollar too. “The value of a currency depends on its widespread social acceptance, though it can be influenced in the short term by the interest rate that you can get in that currency” is such normal everyday stuff that you don’t think about it much. But if you’re reinventing currency from scratch, you do. <cite>Matt Levine, Money Stuff, 2021-12-22 Money Stuff: Wall Street Is No Fun Anymore</cite>