Since new PRV keeps getting generated, wouldn’t that mean that the liquidity pool needs to be continuously expanding. Otherwise what’s stopping people from liquidating the whole pool with the newly generated PRV and essentially making it a big ponzi scheme. I understand the staking principle, but there needs to be more to it.
Is there anyway I can view the total amount of unassigned crypto in the pools? Are the pools gaining interest? How is the price of PRV coin determined?
Am I understanding all this correctly?
Question about PRV
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Loss is what sopping them, the pDEX was designed to don’t let you empty it. Even if somebody owns a lot of PRV he cannot cashout all of them easily.
The economic model of PRV is questionable, as inflation is rather high, but you could expect it to be balanced by greed as more and more people staking and holding as it generates a decent profit. The problems will start if the demand is lower than inflation aka Not enough utility is estabilished. (This is the less likely as the core team is hard-working and has a great roadmap) OR if the stakers don’t make enough profit to maintain the network. (This is a possible scenario in 10-50 years from now.)
The Ponzi has a bad annotation, as it is a scam. Incognito is not a scam, but it is similar to a pyramid type game because if everyone wants to pull out money at the same time, the firsts in the queue would get more than the last ones. This is also true to the real estate market, stocks in general etc… the main difference from a ponzi is: everyone gets some money and nobody could “run with your money behind the scenes” as it is shielded transparently and non-custodial on the Ethereum chain in a smart contract.
I hope these helped you. Ask anything, we are an open community and like to push the boundaries as it is essential for improving the project and to prevent disasters happening.
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Thank you, this did help tremendously. I’m just trying to fully wrap my head around the system.