MLM is based on selling products to people, it requires people to buy stuff in order for other to take a percentage. Steem doesn't require anyone to invest or buy something so I don't see a referral program controversial at all in this instance.
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I'm not talking about the product part of MLM, but the system where the last one sucks. That's why I've written that
Also, I'm not saying that referral systems are evil, but it must be well thought or Steem will be another item in the ad/spam filters with a lot of "get rich quick" ads.
I like the idea @good-karma has written about, some kind of mentoring seems nice. However, users want money without active work. I know about some sites that mentor their acquired users because of life time interests. Rare, but they exist.
Back to the referral system and MLM 'confusion': yes, referred users wouldn't buy anything, still they lose money on long term when they sign up trough an affiliate vs normal accounts. It could only work if making a new account would be unavailable by the normal, non-referred way, so there would be a referrer in any case.
If there would be referred and normal accounts, I'd say "please, don't be stupid, never ever use Steem affiliate links, use the original registration form (make a new account if necessary)."