A type of investment that involves making money by constantly recruiting more and more investors. The scheme is considered fraudulent and is illegal in different countries around the world.
The Long Explanation
This is an unsustainable business model and a fraudulent/illegal investment type in which the initial investor will be required to recruit more investors, who in turn should recruit more investors, and so on. The early investors get their returns from the money contributed by the later investors.
It is called a “pyramid” scheme because the number of investors keeps increasing in each level.
So, are NFTs a pyramid scheme?
No, NFTs are not a pyramid scheme. They are a legit form of cryptocurrency. Unlike a pyramid scheme that requires recruiting more people to join the scheme, NFTs do not involve such practices.
NFTs are limited in number, decentralized, and each transaction is recorded on an open online ledger.