Ethereum Smart Contract Ponzi Schemes: Part 2
Tree Shaped Ponzi
If you haven’t read part one of this series on Ethereum Smart Contract Ponzi Schemes, you can read it here.
In the previous post, I explained how Ethereum is being used to modernize the nefarious world of Ponzi schemes, using a simple Chain Ponzi. In the Chain Ponzi, each new member is linked only to the member previously joined, with the pitch being “we guarantee to double your money”. In this post, I’m going to explain the Tree-Shaped Ponzi.
Just as the name suggests, rather than link each new member of the scheme to the previous member in a 1:1 ratio, a tree-shaped scheme branches out from the original root. Picture it as a Pyramid.
The root node is at the top, and new members join with knowledge of an address of a previously joined member of the scheme when investing money in.
Here’s how it works.
Referral Bonus Platform!
As the owner of the scheme, I deploy the contract and advertise my scheme as a ONCE IN A LIFETIME INVESTMENT OPPORTUNITY, 50% REFERRAL BONUSES FOR GETTING YOUR FRIENDS ONBOARD!
I post links everywhere to where people can join my referral scheme and finally, I get a bite.
- Alice uses my referral code (my ether address) and invests 1 ETH. This goes all to me because I am her parent node and the root node of the tree.
- She knows that for every…
