If you have seen the documentary on the Amazon - The Rise and Fall of LulaRoe", I am sure you may have spot some of the pattern of the direct selling scam in the crypto industry too. If you have not seen the documentary, go and do that, otherwise you would not get the context in this post.

A lot of cryptos show the patterns of the MLM and the direct selling, which we all know are scam and just surviving the lawsuit with the legal speak. Eventually a lot of tokens end up in same way like those direct selling and MLM schemes.

Here I want to show you some patterns common among direct selling and MLM schemes.

Note: No matter how much you try to convince me, I am not in favor of the MLM and the Direct Selling. So this post is not for you if you happen to support this model.

Buy More, Sell More

This claim from the LulaRoe is same as the "XX coin to the moon". Where the people were preaching this to new people and the existing crypto investors. We were told to buy more because that coin would go to the moon. If you buy less how come you would earn more at the time of sales. Some coins who preached like this never able to see 10 USD value in the market. They are still doing "xyz coin to the moon".

Countless preaching zombies are supporting such coins and tokens and trying to control the market. LulaRoe did the same, they just preached and got people to buy the supply regardless of looking at the financial conditions of the investors. When you don't consider your own financial condition and end up buying any random crypto token you are destined to fail.

Bring in Recruits

Every coin or blockchain project out there needs the preachers, recruiters and the people in order to flow that project ahead. If you can bring new people into the grinder, you get to withdraw your investment out. That is applicable to every investment, be it stock, crypto, gold etc. You bring in people to risk their money, increase the price of the instrument and you make exit like a whale keeping people in the illusion.

Same is here in crypto and same was in the LulaRoe. I am not saying this is bad, until you are su*ked into the tokens or coins that promise to take you to the moon but could not even break 10 USD price. And if you check the LUNA, even crossing 10 USD price is not an indicator of safe project.

Where's the Background Check

Almost every anonymous coin project we know have anonymous founders and the workers. Like those Monero or bitcoins original founders. But as you see most of the centralized coins and the blockchain projects have centralized teams. Like CZ behind the binance, some team behind the houbi etc. But do you see the team and the people behind the coin you are investing? Again knowing those people is not an indicator of those coins surviving longer.

But if you don't know how is holding the project alive, such projects people can make exit overnight. What are you going to do then? e.g. STEEM is one such platform, it is radioactive to an extent Justin Sun can close it any day and people who invested money can collapse overnight like LUNA's community. Background check is important and so does the future vision of the blockchains and coins.

You lost, You Did something Wrong

Another thing you would find that in LulaRoe the owners when participated in webinars, they claimed "you did something wrong is why you failed". Basically people who joined the direct sales system of LulaRoe were funding the owners bucket. And they barely got anything in return. The bad product quality, ignoring customer feedback is some of the things that damaged the brand yet they blamed customers and also pushing the blame on others for the failure. You would find a lot of people like this and they run such cults in crypto too. Knowing them and also keeping yourself away from such people is a wisdom you learn on your own.

LulaRoe and many other types of the direct sales, network marketing and MLM schemes have plenty of lessons to teach you. It can make you understand how people out there can scam you, manipulate you and also get you to do things that you don't want. I hope this post gives you enough patterns that can keep you from investing into those tokens which are designed to make an exit.