Many altcoins such as FOMO BABY (FOMOBABY) promise to redistribute "tax" (membership fees) from newcomers to existing hodlers. Are these cryptos technically functional? Are they illegal pyramid schemes?
Actually yes, I have met such coins that redistribute taxes from new investors to old members. I have read that in their whitepapers. I know that if the activity is especially high, you get additional token in your wallet. This scheme is very popular in Defi-projects. I met many projects where the commission was 5% and it was divided between team, other members (adding in pool rewards) and a part was burned.