When a project in the crypto space promises “eternal” or “guaranteed” value and growth, it’s natural for questions about its legitimacy to arise. KIVOT, with its unique liquidity and growth model, is no exception. It’s important to objectively examine which aspects might appear suspicious to an inexperienced eye and what are the fundamental differences that distance it from fraudulent schemes like Ponzi or OneCoin.
1. Why KIVOT is NOT a Ponzi Scheme (Despite Superficial Similarities)
What is a Ponzi Scheme? A Ponzi scheme is an investment fraud where returns to earlier investors are paid from the capital of later investors, rather than from profits from genuine business activity. It requires a continuous influx of new funds to survive and inevitably collapses when the inflow stops. It is characterized by promises of high, guaranteed, and quick returns with little or no risk.
Possible “Ponzi” perceptions of KIVOT (why people might be suspicious):
- Promise of Increasing Value: The claim that KIVOT’s price will grow mathematically and continuously might sound like “guaranteed returns,” which is a red flag for Ponzi schemes.
- “Always Growing Pool”: The idea that the liquidity pool will continuously increase might be misinterpreted as a dependence on “inflowing new money.”
Fundamental Differences That Disprove Ponzi Elements in KIVOT:
- Source of Income/Growth:
- Ponzi: Income comes solely from new investments.
- KIVOT: The growth in KIVOT’s value comes exclusively from fees generated by trading activity (arbitrage) within the Eternal Pool. Fees are reinvested back into the pool, increasing the USDC backing of the fixed number of KIVOT tokens. KIVOT does not need new “investors” to buy tokens to pay previous ones. It needs trading volume, which is provided by the arbitrage mechanism.
- Transparency and Verifiability:
- Ponzi: Opaque operations, lack of a visible product or activity, revenues cannot be verified.
- KIVOT: All transactions, fee accumulation, and liquidity are publicly visible and verifiable on the blockchain. The code is open-source and immutable. There is no “black box.”
- Lack of Referral Systems:
- Ponzi: Often relies on referral bonuses and multi-level marketing networks to attract new funds.
- KIVOT: There is no referral system, network marketing, or incentives for attracting new “investors.”
- Lack of Central Operator/Team:
- Ponzi: Always has a central figure or team that controls the scheme and can “disappear” with the funds.
- KIVOT: The protocol is entirely autonomous and decentralized, operating on pre-programmed code. There is no team that controls the funds or can withdraw them (due to the burned LP tokens of the core liquidity).
2. Why KIVOT is NOT Like OneCoin (Ruja Ignatova)
What was OneCoin? OneCoin was a large-scale global Ponzi scheme disguised as a cryptocurrency. Key characteristics were:
- Lack of a real blockchain: OneCoin did not have a functional public blockchain. “Tokens” were merely entries in a centralized database.
- Sale of “educational packages”: The primary income came from selling packages that “included” tokens.
- Aggressive Multi-Level Marketing (MLM): An extremely strong emphasis on attracting new people through an MLM structure.
- Opacity and Lies: Complete lack of transparency, false promises, and manipulation.
- Inability to Trade: Tokens could not be freely traded on public exchanges.
Fundamental Differences Between KIVOT and OneCoin:
- Real Blockchain and Transparency:
- OneCoin: Blockchain imitation, opaque records.
- KIVOT: Operates on an established public blockchain (Polygon), all transactions, liquidity, and code logic are 100% public and verifiable.
- Free Trading:
- OneCoin: Tokens could not be withdrawn or freely traded on external markets.
- KIVOT: KIVOT tokens can be freely bought and sold in the Eternal Pool, as well as listed and traded on any other decentralized exchange. Liquidity is always available.
- Source of Value:
- OneCoin: Value was entirely fictitious, sustained by new money inflows and marketing.
- KIVOT: Value is fundamentally linked to the accumulation of USDC in its pool, generated by real fees from trading activity. It is an asset backed by assets, not by promises.
- Lack of Network Marketing:
- OneCoin: Heavily dependent on MLM.
- KIVOT: Has no MLM elements whatsoever.
3. What Appears as “Fraud” to People (from an outside perspective)?
Despite the clear fundamental differences, some aspects of KIVOT might be misinterpreted by people unfamiliar with deep DeFi mechanics or who have experienced past crypto scams:
- “Guaranteed Growth”: The claim that KIVOT’s price “will grow mathematically” (due to liquidity accumulation) can be confused with Ponzi promises of guaranteed returns. The difference: KIVOT does not guarantee returns or a rate of growth, but a mechanism that leads to an increase in its underlying value if there is trading volume. Growth is “guaranteed” by the formula PK=LUSDC/N as LUSDC increases, but the magnitude of this growth is not guaranteed, as it depends on trading volume.
- Lack of a “Team” or “Faces”: For many, the absence of a visible team, founders, or developers with whom to communicate is a red flag.
- Reality for KIVOT: This is a deliberate choice that ensures maximum decentralization and eliminates a central point of failure or fraud. The code is the team.
- Misunderstanding of Mechanics: The complexity of the interaction between fixed supply, burned LP tokens, automatic fees, and arbitrage can be difficult for people without technical or economic knowledge in DeFi to grasp. When something is too complex to understand, it is often perceived as a “scam.”
- Absolute Claims: The use of words like “eternal,” “indestructible,” “permanently locked” might sound like scam marketing to those who have seen similar promises fail.
- Reality for KIVOT: These claims are based on the immutability of the smart contract and the fact that LP tokens are burned, which is cryptographically provable. They are not empty promises.
Conclusion: The Key is Transparency and Education
KIVOT has no internal elements that make it a Ponzi scheme or similar to OneCoin. Its growth is generated by internal, measurable, and transparent economic activity (fees from trading, sustained by arbitrage), not by a continuous inflow of new capital paying old investors. It operates on a real blockchain, tokens are freely tradable, and there is no MLM component.
Nevertheless, to overcome the market’s natural skepticism, it is vital to continuously and clearly educate the public about KIVOT’s precise mechanisms. The fundamental differences between KIVOT and fraudulent schemes must be emphasized, focusing on:
- The transparency of the code and on-chain operations.
- The source of growth (fees from trading, not new “investments”).
- The absence of a central operator or referral system.
- The guaranteed (by code) non-withdrawable liquidity.
Potential perceptions of fraud stem from a lack of information and past negative experiences in crypto. KIVOT is designed to be the antithesis of these scams, but communicating this antithesis requires precision and patience.
