Pyramid scheme

Type of unsustainable business model

A pyramid scheme or pyramid scam is a fraudulent business model in which participants earn money primarily by recruiting new members rather than by selling products or services to end consumers or by generating genuine investment returns. Pyramid schemes depend on an ever-growing number of recruits, making them inherently unsustainable. As recruitment inevitably becomes insufficient to sustain the scheme, most participants—particularly those who join later—lose money, while only a small number of people near the top of the pyramid profit.

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