HYIP Life Cycles :

Re: What is the main reason a solid or good HYIP disappears after a (short) while?

From Navigator's article in E-Zine: (read Special case)


Prior to depositing any funds, you should conduct your own investigation on the program you have chosen. Here’s the main misconception of newbies: if a program is around for a long time and holds top places on monitoring websites makes it look very reliable and safe. This is wrong. You are taking the risk of finding yourself at the bottom of a financial pyramid, since old programs are most likely to be on the verge of closure. For this, learn to estimate approximate terms of HYIP life and try looking for the date of the project’s commencement by its WHOIS data or the time it was first mentioned on monitoring websites and forums. Also, keep in mind that 99.9% of online investment projects are no more than mere pyramid schemes (also known as “ponzies”). That’s why you shouldn’t believe statements on their websites declaring the program’s involvement in FOREX trading or betting. Ponzies pay you from the deposits of new investors as long as the influx of new funds exceeds the total amount of payouts.


Life of a program can be split into several stages:
Stage I: A program has just opened, pays everyone, all investors are happy. A huge influx of capital is taking place. There’s almost no withdrawal requests, since most members either accumulate funds on their internal accounts or re-invest their interest. This is the most feasible stage for entering a program. However, you can anticipate some danger here. If a program’s website is of a very high quality and a massive advertising campaign has been conducted, there is a risk that a huge influx of capital will occur (the violet line), leading to a fast closure of the program, since the administrator will choose to run with the money instead of making interest payments to the program’s members. This phase can be determined by examining the program’s statistics. If a program is fresh, but multi-thousand deposits are indicated in the statistics – it’s either fake or the program is on the verge of collapse.
Stage II. If a rapid influx of capital didn’t take place at the• initial stage, HYIP will continue functioning and paying you for a relatively long time. This is the most stable stage: the program grows, deposits gradually increase, few withdrawal requests are made.
Culmination. However, as time passes, the scale of withdrawal• requests increases more and more. At the same time, the influx of new capital remains at the previous level. Once the amount of funds in withdrawal requests approaches the total amount of new funds being deposited, the critical moment of culmination comes, which in 99% of cases results in a collapse of any program, having no real base under itself. The administrator closes down his pyramid, receiving income, equal to the difference of deposited and withdrawn funds for the moment of closure.
Stage III. In case the program keeps functioning and remains open• after the critical moment, two things are possible: you are either dealing with an honest and real high-yield investment venture – one of the very few online, or some commercial trick has taken place (fake statistics, introduction of new advertising plans, promising crazy income, “going private” having been announced with the purpose of making old members increase their deposits). In any case, this stage is the sunset of a program, and if you haven’t lost anything yet, it would be a good idea to get out with your money as soon as possible.
Special case. Certain extraordinary circumstances can be considered• as “special case”: e.g. a program’s website has been hacked or a DDOS attack has taken place. They are most likely to cause the increase in withdrawal requests made by scared investors, leading to the collapse of a program.

Source: http://www.talkgold.com/forum/r25865-.html