If NSR are required to be sold to build reserves (not to pay earlier investors), then it puts downward pressure on the NSR price in the market. If there aren't any takers for NSR at a certain price, the price falls until buyers are found.
If there were no demand for NSR and the system lacked reserves & liquidity, then yes it would fail, but that would not make it a Ponzi, just a failed business. Unlike in a Ponzi, early holders will have lost, not gained.
The NSR supply needs to be able to increase when more reserves are required, and people who invest in the NSR to provide reserves and liquidity must be rewarded for providing this capital. NSR buybacks are a sensible way of doing this that is aligned with the shareholder and NBT holder incentives. It only happens if the network is in a good position and reserves are sufficient (or at least considered sufficient by those currently running Nu). Again, this can occur in a sustainable situation, so is not like a Ponzi.
Nu doesn't need new participants once it is in balance - it only needs a critical mass of customers / users. Obviously a lack of new customers would be worrying to any business, so hopefully there'll always be new participants, however an absence of new participants would be a sign of poor direction, not the bottom falling out of a Ponzi.
NBT market is tiny. USDT today has a volume of over $19m, and circulation of over $50m. This kind of scale has to be the goal for Nu, at which point the business model from transactions and trading may look very good. But for now, a model needs to be found that is trustworthy and robust to justify people using it.
I must admit that I have never seen a business plan / financial model for Nu to show exactly how it is intended to generate revenue and balance out / make a profit, and I think it would be good for this to be available.
I agree that it's a shame there has not been any transparency on this, and while I don't think that proves it to be a Ponzi, in order to build the degree of confidence needed to compete with USDT, people will need to see that the business model is robust.
It would be great to clarify revenue and sustainability I agree, though I don't find it hard to imagine ways of a widely used Nu pegged asset making a profit through trading and transaction fees (I'll try to run some numbers when I have time).
If on average, NBT are sold for $1.0025 and bought for $0.9975 and volumes are decent, why will trading be losing value?
Claiming that the network might be able to reach a point of sustainability, where constant NSR sales are not needed isn't misleading, though nor has it yet been demonstrated.
Any crypto holders are involved in a high risk area, and in my view Nu is at the risky end of the Crypto spectrum, purely because it's trying to achieve something that hasn't been done before, and that involves uncertainties and challenges.
I've seen people's warnings, and I am fully aware that Nu could fail & is experimental, but I see real potential in the model. I don't see reason to dismiss it unless fatal flaws are exposed (e.g. a financial model that demonstrates Nu won't work, followed by no action to improve / correct the model).