Ethereum DeFi project MoneyArk draws follow: new Ponzi scheme or innovative model?

Recently, a new DeFi project called MoneyArk on Ethereum has attracted widespread attention in the market. In the current minor bull market, although Ethereum DeFi projects overall are performing worse than the inscriptions and Solana ecosystem, the emergence of MoneyArk seems to bring new vitality to the market. The project recently completed its initial distribution, and its token $Mark skyrocketed over 20 times in price on December 10.

MoneyArk mainly offers two ways to participate: one is to buy and hold $Mark tokens, and the other is to deposit USDC into its algorithmic vault to earn daily yields. Let's take a deeper look at how this project works.

$Mark Token: The Core Value of MoneyArk

$Mark, as the core token of MoneyArk, aims to achieve long-term low volatility and sustained growth through automated on-chain transaction management of the algorithmic treasury. A significant feature of this token is its transaction tax mechanism: each transaction incurs a 10% fee, half of which is distributed to all holders, while the other half is used to provide liquidity. This mechanism discourages frequent trading and encourages long-term holding.

The total supply of $Mark is fixed at 100 million, with nearly half allocated to the "black hole" contract. This portion of tokens will not actually circulate, but will participate in the distribution of transaction fees. When the tokens held by the black hole address reach 51% of the total supply, a rebalancing operation will be triggered, selling a portion of the tokens and increasing liquidity.

USDC Pool and Algorithmic Vault: Risks Behind High Yields

Another way to participate is to deposit USDC into the algorithmic treasury, promising a daily return rate of 0.5%. However, this high return comes with high risk: the principal cannot be redeemed, and investors can only rely on daily earnings to gradually recoup their costs.

Most of the deposited funds are used to purchase $Mark tokens, while a small portion enters the USDC pool to pay yields. When the withdrawal demand exceeds a certain percentage of the USDC pool balance, the system will automatically sell $Mark to replenish liquidity.

Potential Rising and Falling Cycles of the Project

MoneyArk initially designed a potential spiral ascending mechanism: undervaluation attracts early investors, high rewards attract USDC deposits, and these funds are used to drive up the $Mark price, creating a positive cycle. However, there are doubts about whether this mechanism can sustain itself.

Two weeks after the project launch, additional $Mark rewards will stop, which may put USDC depositors in a dilemma: withdrawing earnings will reduce the future earnings base, while not withdrawing may pose funding security risks.

Participation Strategy and Risk Warning

According to the timing and method of participation, it can be roughly divided into four situations:

1. Early purchase of $Mark: potential returns are the highest, but the risks are also significant.
2. Early deposit of USDC: You may quickly recoup costs through additional rewards.
3. Mid to late stage purchase of $Mark: A larger price increase is needed to make a profit.
4. Depositing USDC in the mid to late stage: highest risk, may become the exit liquidity for early participants.

Regardless of the method chosen to participate, investors should fully recognize the high risks involved, make cautious decisions, and invest rationally.