If it were a Ponzi scheme, it would definitely be a scam. I actually wrote an OK explanation of how a Ponzi works but the one by @joelkatz is honestly better. https://steemit.com/steemit/@joelkatz/steemit-is-not-a-ponzi-scheme ... That is to say, the basis of the investment in a ponzi scheme is always fraud.

But this seems like a pyramid marketing scheme. They can be legitimate. Ish. Avon and mary K and Tupperware (back int he day) all have a "pyramid" component to their sales marketing. However, often the promises of a reward are highly exaggerated.