Buyback tax

[garbagecoin]

Many altcoins such as FOMO BABY (FOMOBABY) promise to redistribute "tax" (membership fees) from newcomers to existing hodlers. Are these cryptos technically functional? Are they illegal pyramid schemes?

[Coyster]

I have never heard about a project with membership fees/tax before, neither have I previously heard about this coin or project, why do new members have to pay any fee in the first place? And who exactly are they paying the membership fees to? Is this project a centralized one? Imo, it's not a good idea to be interested in projects like this cause of one false promise or the other, that's because in the long run it would more often than not turn out to be a scam and you'll lose your funds. That's just my two cents by the way.

[garbagecoin]

The rewards apparently go to existing "members" automatically, to those who have previously bought coins of the same sort.

Baby Shiba Inu (BABYSHIBAINU), which is hyped in a different thread, is another example of this system that is characteristic of illegal pyramid schemes.

Baby Shiba Inu is a fairly launched DeFi Token with an inbuilt reward system for holders.

Cryptos like these are listed on https://coinmarketcap.com/ but seem ignored by well-known crypto enthusiasts. Can somebody shed some light?

[Baimovic]

I also often come across altcoins with this model when I keep coins in my wallet and if coins get high trading volume then I automatically get extra tokens daily and it happens when I hold some coins in BSC maybe new system with DEFI then all holders will get the same thing but there will still be a burn on the coin.

[tabas]

Many altcoins such as FOMO BABY (FOMOBABY) promise to redistribute "tax" (membership fees) from newcomers to existing hodlers. Are these cryptos technically functional? Are they illegal pyramid schemes?

Never heard of the scheme. Membership fee from what? from a signals group? the name itself for that project isn't really that strong nor interesting.
I think that it will be just an another project that are good as a meme if it has been launched already. And good thing you've mentioned about illegal schemes, always be aware of those.

[vv181]

Many altcoins such as FOMO BABY (FOMOBABY) promise to redistribute "tax" (membership fees) from newcomers to existing hodlers. Are these cryptos technically functional? Are they illegal pyramid schemes?

As on the token website:

Fomo Baby was created to keep a reliable price in a volatile market. Strategically designed and judiciously used to increase the price with a smart mathematical rebasing feature implemented in the contract. This smart feature will allow the charts to constantly stay green and cause new investors to Fomo in due to the major incline in price.

I don't see it being worthwhile for a project that flexes its feature based on emotion which is FOMO, meanwhile, even the project has some other features, I don't think it will be standout since all their proposed features already exist within this space. Anyway, I do not comprehend the technicality feasibility, but if you said the are a lot of projects like this, then I believe it is just another worthless project. If you want assurance about the technical functionality of a project, then I believe nothing is better than Bitcoin.

Cryptos like these are listed on https://coinmarketcap.com/ but seem ignored by well-known crypto enthusiasts. Can somebody shed some light?

Because it's a shitshows of a worthless project. Surely, an experienced enthusiast won't fall for this crap token.

[gwdf1]

Many altcoins such as FOMO BABY (FOMOBABY) promise to redistribute "tax" (membership fees) from newcomers to existing hodlers. Are these cryptos technically functional? Are they illegal pyramid schemes?

Actually yes, I have met such coins that redistribute taxes from new investors to old members. I have read that in their whitepapers. I know that if the activity is especially high, you get additional token in your wallet. This scheme is very popular in Defi-projects. I met many projects where the commission was 5% and it was divided between team, other members (adding in pool rewards) and a part was burned.

[joniboini]

Pretty sure scheme like this only work those anonymous tokens, if not, the team will likely get sentenced to jail pretty soon. I never heard of a scheme like this before, other projects usually go with the usual buyback program.

It's a terrible way to attract enthusiast, but it makes sense if the target is newbies or those who did little to no due diligence. Even the usual buyback from the market and fee distribution are not free from controversy, not to mention this.

[khiholangkang]

Many altcoins such as FOMO BABY (FOMOBABY) promise to redistribute "tax" (membership fees) from newcomers to existing hodlers. Are these cryptos technically functional? Are they illegal pyramid schemes?

I have just heard of crypto with membership fees, usually I hear of membership fees in ponzi scheme online businesses. You should be careful with such projects, it is better to choose only obvious projects.

[timerland]

Many altcoins such as FOMO BABY (FOMOBABY) promise to redistribute "tax" (membership fees) from newcomers to existing hodlers. Are these cryptos technically functional? Are they illegal pyramid schemes?

It's a clever pyramid scheme in disguise.

I see a lot of NFTs who do this as well and buyers somehow think that this is a positive to have.

This is literally how Bitconnect and other scam coins have run, just in a subtly different form. Please avoid these coins for the sake of the community and to ensure that you're not accidentally supporting these fraudsters.

[o48o]

Many altcoins such as FOMO BABY (FOMOBABY) promise to redistribute "tax" (membership fees) from newcomers to existing hodlers. Are these cryptos technically functional? Are they illegal pyramid schemes?

Technically if those devs are pseudonymous, it wouldn't matter if they are illegal or not, even if they are ponzi. You shouldn't invest them anyway. But what i mean is that there's no way that any officials would like to take a look at the legality of some random token that isn't really public offering. There are just too many of them to crack down.