I don't like to trash talk other tokens or projects, but when I see something concerning I have to speak up. There has been a lot of hype about TGLD. While hype isn't a bad thing, I have quite a number of concerns with the fundamentals.
The idea of TGLD is that it's a tokenized "Real World Asset" pegged to GLD. I have multiple problems with this, so let's break it all down one step at time and see if TGLD is on the level or if it's a Ponzi.
What Is GLD?
GLD is an ETF, or Exhange Traded Fund. It is designed to give people a way to have exposure to the gold market without owning physical gold. There are fees charged for managing the fund, which is how it brings in revenue. While the shares state they are backed by physical gold held in vaults by banks, you have no claim to it. You can't turn your shares in exchange for any of the gold. So, there are no real assets here, either in TGLD or GLD.
For many of us who are stackers, GLD is a waste of time. I'd rather own physical gold.
What Is TGLD?
TGLD is another crypto token. This claims to be pegged to the price of GLD at a ratio of 1:100. This means the cost is significantly lower than buying a share of GLD.
The big difference here is that Leo is promising a yield, which GLD does not offer. That sounds great at first, but where is this yield coming from? Let's look at it in Leo's own words, point by point.
Their first claim is they are making capital from making new markets. Think about that. Capital is not revenue. Those are funds raised from investors. If the market fails, they will likely ditch it and create a new one, hoping people will buy it. Leo has a reputation for repeatedly doing this.
Future products - So this isn't something that exists yet and sounds like it will rely on buy-in from Hive users before it can generate income. These could be legitimate, but also has Ponzi vibes of paying older "investors" with money coming in from new "investors."
Collateralized lending - While this has the potential to make money, it doesn't exist yet. It's as good as an empty promise.
lstr.voter - This is just a percentage of curation rewards being shared with token holders. I can get 100% of this delegating my HP to
and it costs me nothing.
LeoDex sLEO staking yields - While this is great, LeoDex isn't even in the top 200 decentralized exchanges according to CoinGecko. This means the only way you're getting rewards from this is from them staking their LEO. Many things can affect this, such as the price of LEO, USDC, a bear market, etc. If it were from fees from being in the top 100 of exchangess that would be more reassuring, but that's not the case. (Source)
Lots of "Ifs"
The only thing guaranteed here are curation rewards. There's no guarantee the other sources of income will materialize. The LeoDex rewards seem like they will come in regularly, but there is room for a lot of fluctuation in the rewards themselves. Collateralized lending may or may not materialize. If it does, that could be a good source of income, but it's all dependent on demand and having a system in place to avoid a large number of people defaulting on bad loans.
Ponzi within A Ponzi?
The idea of a Ponzi scheme is the older "investors" are paid with the income from selling to newer "investors." If you get in early and sell, you'll likely make a profit. As the project matures and the stream of new "investors" slows down and dries up, the only incoming revenues are the streams mentioned previously. Only two of those are viable right now, with the future two theoretical sources of income being dubious at best.
Let's also look at the track record of what Leo builds. Much of it doesn't work. Threads still don't work reliably. CUB was a failure. Polyvex resulted in countless stolen HBD, with investors being "paid back" with LEO that was printed out of thin air, which was worth at best half of what people paid into it. This then added a ridiculous amount of inflation and devalued the token further.
I like the idea of TGLD. I don't like the proposed revenue sources. I really don't like the track record of Leo. It claims to be a RWA (Real World Asset) but you can't actually call it an asset when it's not backed by assets. There are too many red flags and warning signs for me here, so I'm out.
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