"Is SEEDS a Ponzi Scheme?" response
"All crypto projects are Ponzi schemes until proven otherwise." - Adage for the crypto age
Rightfully so, a lot of Crypto has been called a "Ponzi Scheme" and other frauds. This is likely because the Cryptocurrency scene is full of them.
What follows is one perspective addressing this topic to help you research and make up your own mind about this question.
Some on-chain facts for you to make up your own mind about SEEDS and if it's indeed a Ponzi Scheme.
āRieki Cordon here. I've been with SEEDS since the very early days, my role was to create maps, articles, protocols, designs, and videos - which may come off as if this is my thing as I'm all over the place.
However, it's important to note that I deserve only a small fraction of the credit for this. It's taken a global team of dedicated humans to pull together all of their skills and ideas to make this hum the way it has.
I wrote this response after seeing my name next to "unregulated Ponzi scheme, with no transparency, run by this guy named Rieki".
This didn't feel great especially since my intention in all of this is to create a more better world to live in. So, I took the time to write out this response, mostly as a way to process my feelings.
"If it sounds too good to be true, its a scam"
While this is almost always true, it's not always the case. Especially when we're living in systems where exploitation is the default. Untrustworthy financial systems, political schemes, environmental decay, rampant fraud and abuse by the powers that be... Fraud is everywhere.
However, if we take this belief too far then we prevent ourselves from ever creating anything better if we don't first believe it's possible.
For the remainder of this article I'm going to discuss why SEEDS would be a very poorly designed Ponzi or other scheme.
Transparency
For any Ponzi to work the truth (the fraud) needs to be hidden from the participants. Otherwise it doesn't work.
What's been done since the beginning is to make literally everything transparent. All meetings, finances, governance decisions, team members, allies, EVERYTHING, is public. You can see literally everything Hypha as an organization does (the organization that has received a majority of funding from SEEDS... However, this was also written while SEEDS is evolving to add the SEEDS Commons and replace Hypha) here dho.hypha.earth and here Discord (where funds go, how decisions are made, all discussions, etc) and see how Hypha uses the funds it's earned from SEEDS. Every Commons organization (those who people are likely buying Seeds from) within SEEDS will operate this way.
No need for an audit
We don't need an audit because everything is public (you only need an audit if you can't see yourself and need another organization to look for you).
However, transparency is only useful if people know where to go looking and if you know how to easily audit yourself...
So, if you don't know how to search a blockchain - below is a video helping you, so you can go and see for yourself too and not have to trust anyone:
The video notes link to all financial accounts and show you how to find them so you can see where all the money goes and how the SEEDS Commons organizations use all the funds from the SEEDS Sale (when you buy Seeds from joinseeds.earth).
Hypha Stake
Hypha definitely has a stake in SEEDS as it received 20% of the initial supply of Seeds (which will continue to shrink to only be a small fraction of the total supply going forward should we succeed). However, these Seeds are locked until after "go live" which doesn't occur until SEEDS becomes a more mature economy and anyone who's bought Seeds has already benefitted and had a chance to exit (this removes the ability for Hypha to "dump" on buyers).
So, Hypha has no way to "cash out" on anyone buying Seeds right now (making this a pretty poorly designed Ponzi... Since the point of Ponzi schemes is to cash out early and often).
Hypha members will only be able to do so well after anyone else who wants to leave has an opportunity (as high liquidity is a prerequisite for "go live" - thus giving everyone who bought Seeds an easy opportunity to leave should they choose to).
So, those trading their other 'money tools' (USD, Euro, Bitcoin, etc) for Seeds are in a privileged position to Hypha (the exact opposite of what a Ponzi requires to benefit those running it).
Don't buy Seeds if you don't understand!
Do not to spend any money buying Seeds if you don't understand it and don't completely get it.
The point is to experiment with and build new economic systems that can actually meet our needs and start to address humanity's crises. I can't say this enough, I realise it's an audacious and ridiculous goal - but I'm not sure if anything less is actually going to help humanity right now...
If it works, Seeds becomes a useful day-to-day currency and we don't care what the exchange rate back to Central Bank currencies are (as we build alternatives to those exploitative systems).
We play our part by making ALL the software and learning open-source to best support this aim.
Another reason this would be a poor Ponzi Scheme is we're actually using the money to develop open-source technology (not embezzling it) that anyone can use to build new economies with.
Opensource repositories
https://github.com/JoinSEEDSāā
https://github.com/hypha-dao/ā
"Too good to be true"
All the "too good to be true" promises only seem too good to be true because we've all been encultured to accept a monumental fraud. Central Banks created over 10 TRILLION USD worth of money a few years following the 2020 pandemic!
Where did all this money go? Did you get a say whether this money should be created or not? Did you at least get a proportional amount (you didn't)?
Central Banks could make and keep all the promises that SEEDS suggests. They could create a "better than free" currency (e.g. giving all people who use the currency a share of the new money these banks create - e.g. "better than free"). They could finance local food systems, reforestation, and all the rest of the things that our civilization requires to thrive. They haven't been, but that's exactly what SEEDS has been financing this whole time. And we're only getting more effective at doing so.
If Seeds replaces central banks as preferred currencies (and it only needs to do this in a single community to succeed for that community) then it can have the power that central banks wield.
Then instead of using that money to prop up Wall Street, give mega bailouts to massive companies (that in turn give massive bonuses to executives), doubling the wealth of billionaires since the pandemic, spending Trillions on warfare, trillions subsidizing oil and gas, etc, etc... we can instead create our own currency and fund all the things humanity actually needs to thrive instead of what we're currently funding.
It's a fairly simple premise, but a monumental task to get us there. Though, I'm confident we can do it, because almost everyone wants this, we just need to get beyond that barrier where people feel it's too difficult to even try. We have to try.
A Ponzi until proven otherwise!
Think of SEEDS and any other crypto as a Ponzi Scheme until you're proven otherwise and never invest in any project that you don't fully understand and never spend more than you're willing to lose.
I realize doing this due diligence for SEEDS requires a lot of time - though for the full picture of exactly how SEEDS can accomplish the goals its set are laid out in our foundations.
As rightfully noted here - it's a serious task to take on to build a new economic system and I welcome anyone to point out the flaws in approach directly in any of the SEEDS comms channels.
Central Bank money: The original Ponzi
Seeds, and crypto as a whole, are more easily seen as a giant Ponzi Scheme if you think the future of money is Central Bank money.
If your goal is to grow your Euros, Yen, or Dollars; Seeds is a scam, as not everyone will be able to grow their Central Bank money and exit the same.
If your goal, however, is to exit the central bank system and create a new economic system; and you know the future of civilization is built on top of Web3; then crypto as a whole is no longer a scam, it's the foundation to new Civilizations and Central Bank money is just a dying relic, dying along with the previous age of centralized command-and-control structures. Where Crypto, Web3. and our wider movement could improve upon is on the distribution mechanics of money-on-money and especially governance-on-governance. Meaning, we need to evolve beyond the endless Ponzi schemes, Rug Pulls, and other frauds that are rampant.
Meaning, throughout much of Crypto we built a direct pathway for those who own piles of Central Bank money - to trade their old-world power for new-world power. When governance tokens are able to be bought, we just allowed our new financial systems to be governed by the previously powerful. As a movement we need to continue to focus on using airdrops, earndrops, aligned token swaps, etc. as distribution mechanisms that don't just hand over our citizen-governed economic systems to the previous powers that were. This is why SEEDS "Voice token" aren't able to be traded (so money can't directly buy voice).
There's no reason we should build a free and open-source financial system and willing give it over to Wallstreet (as the wider Crypto trend seems to be going).
Instead we need to make sure we're redistributing wealth and reversing inequality with this transition technology.
This is exactly what SEEDS has been focused on doing, ensuring the regenerators of the world are the first to get Seeds (the currency). Which is why we've been focusing on campaigns and Citizen governed processes to distribute Seeds and not just hype, speculation, and exchange listings.
The idea that we CAN create a new type of civilization and we don't need the permission of those running the current systems to do so, is all that keeps me sane...
It may not work, but it's the only choice I have to build a world worth living in and I'm here to commit my life to this journey - unless I find a better way to create a regenerative economy - this is it for me!
Iād love to hear if you know of a better way and let's then work together to make that path happen! Thanks for reading this far.
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