Hype - what is it and how is it different from financial pyramids?

If you've ever considered investing online and looked for interesting platforms, you've likely stumbled across various hype projects. Sometimes, behind the glamorous facade, you don't even realize where your money is going or who's using it.

The fact is that HYIP is a kind of investment fund offering high returns on your investments.

Why do I say "mock investment fund"? Often, on a website page, you can see a pricing plan, manager reports, and information about how your money is being used, but in reality, the hype project has no legal basis, and all the documents you see are nothing more than Photoshopped fakes.

As you can imagine, behind the fake documents stands a common scammer who quickly collects investors' money and closes his project, leaving the investor without payment.

Types of hype projects

Whatever hype project you encounter, the first thing you'll notice after your profitability is where the manager invests. Here are several types of hype projects:

1) Exchange

2) Betting

3) Casino and Poker

4) Mixed type

Stock market HYIPs tell us that all funds raised by the project are used on the Forex and stock markets, and the team includes professional traders who can generate enormous profits.

The scariest thing is that often these kinds of projects don't even participate in the exchange, but instead distribute funds among new participants using a pyramid scheme. However, while you can still spot a fraudulent project by its poor website design, the latest scandal involving the well-known forex broker MMSIS and its TOP 20 Traders Index, which turned out to be a cover for a typical fundraising scam, is making you increasingly disillusioned with these kinds of projects.

Therefore, before investing in such projects, compare the profit you are promised with real human capabilities.

Betting HYIPs specialize in sports betting and claim to generate huge profits by analyzing sporting events and also possessing information on match fixing. Such projects typically have a short lifespan, ranging from one month to six months, after which they become insolvent and close.

Casinos and poker are a separate and unique industry. You should understand from the start that investing in gambling is a surefire loser. Remember, cheating a casino is virtually impossible, and good poker players have a fortune even without any projects and don't engage in frivolous activities. Therefore, if you see hype based on investing in poker games or anything casino-related, simply close the page with that project.

Mixed-type hype projects claim to invest in a bit of everything, but is this really true? Before investing in such a company, ask yourself this question, and if you don't receive a real answer from the administration in the form of supporting documents, simply ignore the company.

Profitability of Hype Projects

There's a direct correlation between the profitability of a HYIP project and its longevity. Therefore, all HYIPs are conventionally divided into low-yield, medium-yield, and high-yield.

Low-yield HYIP projects pay out up to 20 percent per month, and these typically include exchange-traded companies that promise the average return for the average trader. These projects tend to last quite a long time, which is why they're the most popular investment destination.

- Average-yield HYIPs promise up to 3 percent per day, and their lifespan ranges from a couple of months to six months.

High-yield HYIPs promise payouts ranging from 20 percent to 100 percent per day, but their lifespan can last anywhere from one day to a couple of weeks, or in exceptional cases, up to a month. Investing in high-yield HYIPs is like playing Russian roulette: you either survive and manage to get your money back, or you lose everything. And the longer you wait, the greater the chance of getting shot.

Difference from financial pyramids

Financial pyramids involve attracting clients who will pay initial fees, which will then be paid out as a reward to the person who invited them.

Simply put, in a pyramid scheme, only the top earns real money. However, unlike HYIPs, they are more durable and rarely conceal their nature and purpose. For example, the well-known MMM pyramid scheme lasted for a long time, with its founder openly stating that the money was not invested, but simply distributed among participants. 

HYIP projects are simple investments, and you don't need to invite anyone to earn interest. However, as I described above, HYIP owners are increasingly using pyramid schemes and turning out to be scammers. Remember, any investment is associated with risks; even century-old banks go bankrupt, and investing in HYIPs is a highly risky endeavor.