If someone's trying to recruit you into a "revolutionary crypto opportunity" where you earn more from bringing in new people than from the actual product, congratulations – you've encountered crypto's version of MLM (Multi-Level Marketing). These schemes wrap traditional pyramid structures in blockchain buzzwords, targeting people who understand crypto's potential but haven't learned to spot the red flags yet.
Crypto MLMs typically promise passive income through some combination of token staking, mining pools, or DeFi yields, but the real money comes from recruitment bonuses and building your "downline." They love terms like "decentralized," "community-driven," and "passive income," while the actual token or service is often secondary to the recruitment mechanism.
The cruel irony is that crypto MLMs exploit the legitimate opportunities in the space. Real DeFi yields exist, legitimate mining operations make money, and some projects do reward early adopters – but MLMs twist these concepts into recruitment-focused schemes that inevitably collapse when new sign-ups dry up.
When Do You Use MLM?
You'll see MLM discussions when crypto communities are:
- Warning newcomers about common scams and predatory schemes
- Analyzing suspicious projects with unusual reward structures
- Discussing the intersection between crypto and traditional financial scams
- Teaching due diligence practices for evaluating "opportunity" pitches
The term appears in scam awareness threads, educational content about crypto risks, and community discussions about protecting vulnerable members from exploitation. You'll also encounter it in regulatory discussions about crypto's reputation problems.
How to Use MLM in a Sentence
Here's how MLM typically appears in crypto discussions:
- "That 'mining' project screams crypto MLM – all recruitment, no real product."
- "I avoid anything that pays more for referrals than for actual usage."
- "My uncle got burned by a crypto MLM promising 20% monthly returns."
- "The MLM red flags are obvious once you know what to look for."
