Another day, another excuse to ram crypto buzzwords down the throats of the MLM community.

Why Compchain?

Compchain is changing the scope of networking as we know it.

Built on immutable blockchain technology, Compchain allows you to lock in your network for life, and tap into new products and opportunities as they’re added to the platform.

The basic concept behind Nui’s CompChain is your downline is tracked on a blockchain, as opposed to a regular database.

For Nui affiliates there’s no discernible difference. CompChain is a unilevel team downline, same as any other MLM company.

But y’know… blockchain.

Nui’s argument for a blockchain based downline goes like this;

Compchain is the world’s first blockchain created specifically for networking.

It puts the power of your personal network back in YOUR hands.

Compchain provides a safe, secure service that stores and protects your network, forever.

The implication is that other MLM companies manipulate and steal downlines at whim.

In CompChain that’s supposedly not possible, hence “putting the power back in your hands”.

My problem with this is CompChain is no different to how an MLM company is supposed to work.

If you’re in an MLM company and your downline is stolen, you’re in a shitty MLM company run by shitty people.

CompChain is run by Nui. Their back-end business model sees them hoping to get other MLM companies to use CompChain for downline management\, as opposed to existing platforms.

What I haven’t seen addressed anywhere is what happens if an MLM company asks Nui to fork a CompChain downline to manipulate it?

Also if Nui goes under, bye-bye to the MLM companies using CompChain?

Nui running managing other MLM company downlines sounds like a single point of failure.

With other platforms you buy the platform and can run it locally. You won’t get official updates and support if the providing company goes under but at least it’ll run.

A third-party developer can always be brought in to keep the system running and address issues if need be.

As far as I know CompChain isn’t open-source and they’re running CompChain on their own servers.

The traditional platform equivalent is if you ran your MLM company on a hosted third-party platform, and the hosting company went out of business.

Oh, and there’s also this buried in CompChain’s Terms and Conditions;

CompChain reserves the right, in its sole discretion, to terminate your access to the Site and the related services or any portion thereof at any time, without notice.

How is this different to any other MLM company again?

In an effort to demonstrate use-case for CompChain, Nui is launching their own downline on it.

This appears to be separate to the Nui downline, although Nui affiliates are obviously being encouraged to sign up.

Attached to CompChain is the CompCoin (COCO) altcoin Nui have created.

CompCoin is not publicly tradeable and for now exists only within Nui and CompChain.

Till then, COCO are essentially internal currency points.

The idea behind Nui’s CompChain downline is that people sign up, get organized into a unilevel team and then products are launched to sell to the downline.

Two things immediately come to mind;

  1. Why launch CompChain if there aren’t any products yet?
  2. Selling to affiliates in CompChain (everyone is an affiliate) isn’t retail sales, which any legitimate MLM company needs.

Without any products or services there’s nothing to purchase or sell, so you’re probably wondering what exactly Nui have launched.

Currently all you can do in CompChain is get invited by an existing affiliate.

Each new CompChain affiliate that signs up receives $3 in CompCoin.

I couldn’t find the current internal value of CompCoin anywhere on Nui’s website or that of CompChain.

When an existing CompChain affiliate recruits a new affiliate, they have to hand over $1 worth of COCO.

Commissions on recruitment of CompChain affiliates are paid in COCO as follows:

  • 25 cents worth of COCO per affiliate recruited down ten unilevel team levels
  • $15 worth of COCO if three personally recruited affiliates complete CompChain KYC verification
  • $30 worth of COCO if three affiliates recruited by three personally recruited affiliates each complete CompChain KYC verification (nine second level affiliates)

COCO is generated by Nui on demand at little to no cost.

There’s nothing about an internal exchange on the CompChain website, without which COCO has no value at all (even if there’s an assigned internal value).

The problem for Nui is that if there is or ever is an internal CompChain exchange, they’re running a pyramid scheme.

An internal exchange assigns an actual value to COCO, which means CompChain affiliates can liquidate it into real money (typically USD or another cryptocurrency).

COCO can be mined (mining is trivial for any new altcoin), but otherwise the only way to acquire it is through CompChain recruitment.

COCO mining has nothing to do with the CompChain MLM opportunity, which as it stands only pays on recruitment.

There’s also securities law at play.

If Nui is representing COCO is worth USD, which they are when they talk about paying $1 worth of COCO per affiliate recruited or paying affiliates $15/$30 worth of COCO, that is the primary incentive to recruit.

That incentive, that COCO is worth USD and by extension will be worth more USD in the future, is potentially a securities offering – even if COCO is not being directly invested in (which it very well might be if CompChain runs an internal exchange).

I can’t see CompChain affiliates acquiring COCO without a liquidation route, so I’m almost certain there’s an internal exchange.

Whether CompChain affiliates are able to access it or not is another matter.

Further to potential securities law violations, by giving COCO out for free and not charging affiliate membership fees, the question of what will fund COCO liquidation is important.

If it’s through an internal exchange, that will see CompChain affiliates pay other affiliates looking to withdraw, based on whatever internal COCO value Nui has set.

This ties into the representation (implied or otherwise) that COCO will increase in value – even if it’s directly publicly stated.

Nui for their part has to be careful, lest the Texas Securities Board take them to task again.

Not really sure how this is going to play out.

If Nui’s CompChain pyramid recruitment and potential securities fraud flies under the radar, such that they’re able to eventually push some product/service to affiliates, then you have 100% internal consumption as an issue.

And if there provisions for retail customers in CompChain (none are mentioned that I can see), are genuine retail customers going to waste their time signing up for blockchain, KYC, acquiring COCO, blahblahblah?

Affiliates will jump through hoops on the promise of commissions. Retail customers aren’t going to bother.

And again that’s only if there’s provision for retail customer selling in CompChain, of which I’ve seen no evidence of or even reference to.

TL;DR? CompChain is the blockchain solution to downline management that nobody asked for or needs.

Nui is promoting CompChain via pyramid recruitment, attached to an altcoin they’ve created.

Given the usual “to the moon!” MLM crypto nonsense we see, this is potentially another securities fraud violation in the making.