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NFTs and Ponzi schemes? The chilling connection exposed by Matt Levine

Bloomberg News finance writer Matt Levine recently published an article titled "Crypto Story Links NFTs to Ponzi Schemes and Mentions Metaverse," in which he explores how loans backed by NFTs could be used as part of a Ponzi scheme.

In the article, Levine highlights the launch of Blend, a platform that allows users to borrow money using their NFTs as collateral. While Levine acknowledges that the idea of loans backed by NFTs is not new, he notes that Blend is one of the first projects to offer a fully integrated solution.

However, Levine also warns that loans backed by NFTs could be used to promote Ponzi schemes in which investors take out loans to buy more NFTs instead of selling them. While this may seem like a way to take advantage of the value of NFTs, it is dangerous because if the value of NFTs declines, investors would find themselves with a large amount of debt and worthless NFTs.

The article also mentions the rise of the Metaverse and how NFTs are being used as a way to buy virtual goods within these worlds. Levine wonders if the metaverse could become a venue for Ponzi schemes, where investors are rewarded for inviting more people into the metaverse and promoting certain NFTs projects.

In conclusion, Levine's article is a warning about the use of loans backed by NFTs and how they could be used in Ponzi schemes. It also highlights the growing importance of the metaverse and how NFTs could be used in this emerging space.

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