⚜️What are the notorious funding schemes?
Essence: A Ponzi scheme, where the funds from new investors are used to pay returns to older investors. There is no actual business or sustainable profit source, and the project will ultimately collapse due to a break in the funding chain.
🫧Typical characteristics:
Promise of high, stable returns
Advocates 'referrals,' team bonuses, and tiered commissions (using 'promotion' to bring in more people).
Must continuously have new funds flowing in, superficially packaged as 'investment management,' 'staking mining,' 'blockchain games,' etc.
The official website is beautifully designed but the information is vague; the true identities of the team are difficult to verify.
🫧Extremely high risk: Once there are no takers or the fund pool hits zero, subsequent participants lose all their investment.
🫧Legal risks: In most countries, funding schemes are clearly illegal fundraising, and participants may face legal accountability.
🫧No actual value: There is no sustainable economic model or ecosystem, and the coin price and returns can collapse at any moment.
🌾✨Common packaging methods
'Blockchain/DeFi wealth management', 'high-interest locking', 'AI quantification', 'Web3 mining', etc., are old wines in new bottles.
Distributing so-called 'platform tokens' that only circulate within their own ecosystem or small exchanges, making them hard to cash out.
💰💵How do those involved in funding schemes make money?
🧜🏻Project operators (organizers)
They control the entire fund pool, designing profit rules and rebate systems.
Through layers of commissions and fabricated profit reports, they pocket the majority of funds, potentially cashing out and fleeing before the collapse.
🍀🫧Who is making money?
Early joiners/deep promoters
The earlier you join and the more people you recruit, the more rebates and 'downline rewards' you receive.
Typically generates rebates and commissions through 'referrals' and 'team development.'
🤭Later participants
The vast majority of latecomers are just 'taking over' for those in front, with funds initially diverted for 'rebates' and ultimately becoming unrecoverable or lost.
💴💲Profit logic:
All 'profits' are not generated from actual earnings but are instead the principal of later users used to cover the 'dividends' of earlier users.
When new money comes in, it is immediately distributed by the system to those in front and the organizers through various methods like 'referral rewards + team rewards'; the project party can abscond with the funds at any time.
‼️Summary
All profit from funding schemes is built on a continuous influx of new users, sacrificing the vast majority of later users.
The organizers and the earliest downlines are the only groups that can reap significant profits.
🫥The problem arises
How can you ensure you are an early participant who can escape immediately?