Is Pillow (pillow.Fund) legit or a scam?

Pillow styles itself as “the best way to save in dollars.” Their FAQ claims “Pillow is a savings app that allows you to virtually save your funds in dollars while earning daily passive income. You can deposit funds with Naira and earn up to 14% annual interest on your deposit.”

14% annual Interest?

How does Pillow intend to generate the funds to pay this interest? Again, on their FAQ they state:

Pillow generates returns by investing the users’ funds into the best blue-chip DeFi protocols on blockchain networks.

Pillow has a dedicated research team that actively looks at 500+ protocols across 10+ chains to find the safest protocols to invest the users’ savings in. These protocols are spread across various business models such as lending & borrowing, single-sided staking, insurance, etc.

Most of the yield generated from these investments is passed on as returns to the users.

While this explanation does seem reasonable, is it plausible? This question needs to be asked due to the turbulent nature of the crypto markets. Earlier this year in March, Yahoo Finance reported that most DeFi 1.0 blue-chip assets have plummeted by more than 80% against both USD and ETH. Crypto assets doing well in the market today might be plummeting in the future. Given this fact, is it possible to make enough profits on these assets to offset operational costs and still have enough left over to pay profits to investors? The only way to ascertain this would be to have the audited financials of Pillow.

A whois search shows that the domain pillow.fund was registered in September 2021. From this we can infer that Pillow has been operational for over a year. Hence a published audited financial report showing their activities this past year will prove if they can pay the promised 14% returns to investors. Till this is made available, it would be wise to remain skeptical.

Regulatory Compliance?

From the words used on their website, Pillow’s solicitations constitute a securities offering, as such, according to extant laws they are supposed to be registered as a company with the Corporate Affairs Commission and regulated by the Securities and Exchange Commission. They have done neither but have put out ads on several media outlets in Nigeria.

Ease of use and user-friendly interface?

One of the selling points of Pillow is its supposed ease of use and user-friendly interface. But reviews on Google Playstore paint a different picture. Currently, the app is rated 3.3 with a sizable number of 1-star reviews.

In conclusion, Pillow’s Business model, non-regulatory compliance and user issues are cause for concern. Considering these we cannot give this app a positive recommendation.