What is a HYIP?
A HYIP is a scheme which reportedly pays a very high interest on your deposit funds, usually much more that retail investments and much more frequently.
HYIPs require you to send a deposit, traditionally that would have been in US dollars, but since the Crypto Boom more are looking for deposits in Bitcoin. After an agree period of time you get your capital back along with a quantity of interest from 0.1% to more than 10% depending on the programme.
How does they work?
There are several structures that a HYIP programme may take;
- The classical arrangement where your deposit is held for a time period and then released plus interest.
- A hybrid there the deposit is held for a time period, but your interest can be withdrawn before the deposit time period, sometimes daily.
- Payments are made sometimes, hourly, but typically daily which are a combination of your capital plus interest.
Also most schemes will pay a good referral commission, sometimes over multiple levels from 3% to 10%.
How a HYIP can pay so much money?
The best of them will re-invest the money the hold and use for trading and exchanging. Others it may be from advertising revenues, others may invest in a basket of HYIPs to minimise the risk.
However a great many do not and are no more than Ponzi schemes. Basically they require an ever increasing pool of new investors, their money is used to pay out the old investors, but guaranteed at some point the house of cards will collapse. The only winners will be the admin and maybe some of the founding investors, everyone else? More likely loss of some if not all of your capital.
Is it worth investing?
For most no, you need a great deal of luck to pick the winners. Due to complex rules you often can’t cut the losers. If your capital is important to you, these are probably to high risk for you.