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Polygon Dump Incoming? Chinese MLM Scheme-Related Wallet Becomes Fifth Largest MATIC Holder

Published 02/13/2023, 12:46 PM
Updated 02/13/2023, 01:00 PM
© Reuters Polygon Dump Incoming? Chinese MLM Scheme-Related Wallet Becomes Fifth Largest MATIC Holder
DOGE/USD
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  • Avatar, a Chinese crypto project potentially running an MLM scheme, has amassed over 25.56 million MATIC tokens.
  • The project offers its users to “stake” their MATIC tokens for extremely high rewards and refer other users.
  • MATIC might see a significant decrease in price if Avatar turns out to be a scam and the founders dump their tokens.

Polygon (MATIC) has a new whale holding millions of MATIC tokens. That new whale is an obscure Chinese staking project that some crypto industry observers call a multi-level marketing (MLM) scheme.

Avatar, which calls itself a decentralized on-chain perpetual gaming finance (GameFi) project, has amassed over 25.56 million MATIC tokens in a few days. The wallet is now the fifth-largest holder and one of the top gas spenders on Polygon.

The wallet address linked to Avatar came to light on Monday after Wu Blockchain, a crypto Chinese reporter, and PeckShield, a blockchain security firm, noticed the rapid rise of MATIC tokens concentrating at one address.

While there’s not much information about Avatar available on its website or traditional social media channels, some users on Twitter have found possible evidence indicating that Avatar is operating an MLM scheme.

Chinese MLM Scheme Hoarding MATIC Tokens

A whale accumulating one of the top Layer-2 tokens is a welcoming sign for Polygon believers and MATIC holders. However, it seems that the whale, in this particular case, is nothing but an MLM scheme.

A Twitter user called CryptoNasss found out that Avatar is likely running an MLM scheme. The project calls it a “referral staking program,” allowing users to earn a yield on their MATIC tokens for every new user they bring in.

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