Before September 9, 2012, Zubaduba operated an $8 '1-up' pyramid scheme, where members earned commissions by recruiting others. The company later changed its business model to one reportedly resembling a Ponzi scheme.
Zubaduba's website provided no information about who owned or operated the business. The domain 'zubaduba.com' was registered on June 26, 2012, but its registration details were set to private. This lack of transparency is a significant concern for any potential participant.
The company offered no retailable products or services. Instead, members could only market Zubaduba memberships themselves. Each membership included access to a "growing digital product collection." Zubaduba claimed it would use 20% of its total income to buy new digital products for members.
Zubaduba did sell advertising space on its webpage directly to the public. But members could not market this service or earn commissions from it, making it external to the core MLM opportunity.
The compensation plan used a '1-up' structure. Each new member passed their first membership sale to their direct upline. After that initial sale, the member kept all subsequent membership sales. Similarly, the first sale made by any of their direct downline was passed up to them, creating a cascading effect down the recruitment chain.
Zubaduba paid a flat $5 monthly commission for each monthly membership fee. Membership to Zubaduba cost $8 per month. The company administrators kept the remaining $3 from each fee.
The entire structure functioned as a basic pyramid scheme. With no actual products or services to sell, the system relied entirely on a continuous stream of new recruits. Once members at the bottom of the structure could no longer recruit, they would stop paying their monthly fees. This would cut off commissions to their uplines, causing the entire opportunity to collapse. The small commissions offered, coupled with the $3 retained by admin, suggested this collapse would occur quickly.