Activate Altar of Dementia by sacrificing the undying creature.
When the undying creature dies, its undying ability triggers, returning itself from your graveyard to the battlefield without a +1/+1 counter on it due to Blightbeetle.
Resolve the Altar of Dementia ability.
Repeat from step 2.
This clever loop relies on trading permanents away and shutting down counters to strip away a creature's built-in safety valve. By using Stiltzkin, Moogle Merchant to hand over a Blightbeetle to your opponent, you establish a static tax that completely forbids their creatures from receiving +1/+1 counters. With that restriction active, sacrificing an undying creature to Altar of Dementia becomes an infinite cycle, because the prevention effect ensures the creature returns from the graveyard every single time without a counter to shut off its ability.