Plasma founder Paul Faecks has refuted claims of insider selling after the XPL token, the project’s native currency, plummeted over the weekend, losing more than half its value.
On Thursday, Faecks dismissed rumors that the team had liquidated tokens on the market, emphasizing that both investor and team allocations are locked for three years, with a one-year cliff. “No team members have sold any XPL,” he asserted.
Plasma officially debuted its mainnet beta along with the Plasma (XPL) token on September 25. This layer-1 blockchain aims to reduce costs and improve the speed of stablecoin payments.
After the launch, XPL soared to nearly $1.70 on Sunday, only to decline steadily to $0.83 by Wednesday, erasing over 50% of its value, according to TradingView data.
Community concerns and onchain investigations
The significant drop raised suspicions among community members that the team might have participated in time-weighted average price (TWAP) selling. This algorithmic strategy breaks down substantial sell orders into smaller, uniformly sized transactions executed at regular intervals.
Community members promptly engaged in onchain analysis to trace the XPL flows post-dump.
Independent investigator ManaMoon highlighted movements from the Plasma team’s vault, noting that over 600 million XPL tokens were sent to exchanges just days before the launch.
“I suspect someone was TWAP selling a large quantity of tokens that the retail market couldn’t withstand,” ManaMoon expressed.
A community member known as crypto_popseye accused both the team and algorithmic trading firm Wintermute of causing the price collapse. “Plasma $xpl has severely damaged its chart and momentum, and I hope their project fails,” he remarked.
In spite of community criticisms, the Plasma team distanced themselves from Wintermute, maintaining that they possess the same public information.
“We have not engaged Wintermute as a market maker, nor have we ever contracted them for any of their services,” Faecks clarified. “We possess the same information as the public regarding Wintermute’s ownership of XPL.”
Related: Aster reimburses users after XPL perpetual glitch sends price to $4
Community probes ecosystem and growth tokens
After Faecks’ statement, crypto_popseye questioned the founder’s wording. The user accused Faecks of phrasing his message to exclude implications of team sales while leaving the status of other token categories, such as “ecosystem and growth” tokens, ambiguous.
“It’s pretty evident that they have been sold, but you’re crafting your tweet to suggest otherwise,” the user stated.
In his response, Faecks reiterated the team’s dedication, stating that they are “laser-focused on building the future of money” and will not provide further comments.
Cointelegraph reached out to the Plasma team for additional remarks but did not receive a response by the time of publication.
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