Loom is a peer-to-peer pyramid scheme which involves people being invited to invest as little as N1000, N2000, or N13,000, with the promise that they would recoup as much as eight times the value of the amount they invested, within a short period of time.

Like MMM, Loom works in a pyramid and there are levels to this thing. The Loom pyramid is grouped into four colour-coded levels – purple, blue, orange and red. Loom operates from WhatsApp groups.

The first person to sign up to the group sits in the red level, which is the central level, and gets the payout when the group fills up.


A typical pyramid structure of Loom Money Nigeria (Pulse) A typical pyramid structure of Loom Money Nigeria (Pulse)

Two people sit in the orange level, while four investors fill the blue level. The purple level takes new entrants with eight spots open.

Once the eight spots in the purple level are filled, the group splits into top half and bottom half as the investors in the outer levels move into new levels.

The new groups of seven investors each then have to recruit eight new investors to once again break the circles into another two groups.

Investors are typically invited to join a WhatsApp group and are advised to recruit as many other investors as possible because the scheme only works if it keeps a steady stream of new investors to pay earlier investors.

The more people are recruited into the group, the quicker it breaks and the quicker the payouts are to investors. The initial investment is usually paid to the group admin who sits in the red level.

If you invest N1,000, you get N8,000; if you invest N2,000, you get N16,000; and if you invest N13,000 you will reap N104,000.

A screenshot of Loom WhatsApp group (Pulse)

Like every Ponzi scheme, Loom operates a flat structure. There are no bosses, heads or people calling the shots from marbled offices. There are no known faces to this thing. Just unsustainable money in circulation. And everyone is a player. The game is the game.

Historically, Ponzi schemes are set up to last for a short time. A Ponzi scheme isn’t the most sustainable way to invest your hard earned money. While you jubilate at the moment and tell family and friends that the whole set-up is real, the day would definitely come when the cash dries up and the millions you just invested never return. That day would eventually come when the last pay you funneled into the scheme would be the last the scheme receives before everyone disappears…before the scheme packs up and everyone wails at the feet of cash dispensing machines.



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