Definition ∞ A high yield scam is a deceptive investment that guarantees exceptionally large and often improbable returns with minimal danger. These schemes typically function as Ponzi arrangements, using new investor money to compensate earlier investors. This creates an appearance of profitability to attract continuous capital before the scheme collapses.
Context ∞ In the digital asset world, high yield scams frequently exploit investor enthusiasm for quick gains, often presenting as decentralized finance protocols or crypto investment platforms. These scams commonly offer daily or weekly returns far exceeding market averages, luring individuals with unsustainable promises. Regulatory bodies and industry observers regularly issue warnings regarding these deceptive practices, stressing the importance of careful review.
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