@bernadette32
A token economy may resemble a Ponzi structure if returns are primarily dependent on new participants buying in rather than actual product usage or revenue. Warning signs include unsustainable high yields, token emissions without clear utility, and no connection to real economic activity. A healthy token model should generate value through fees, real-world services, or protocol growth. Projects must clearly explain how revenue is created and distributed to avoid speculative bubbles. Regular audits, transparent reporting, and sustainable incentives can help distinguish legitimate projects from Ponzi-like schemes. Without these safeguards, investor confidence can quickly collapse when growth slows or rewards dry up.
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