MATIC price has been falling at a dramatic rate, almost crashing in less than an hour. On Tuesday, the Layer 2 scaling solution that uses sidechains for off-chain computation tanked over 70%.
12 December | Matic News – In a dramatic move, Matic token price collapsed from $0.042 to $0.012 in a flash, making its investors stunned and frustrated.
Throughout the day, Twitter was awash with innuendoes, ridicule, and insults from the Crypto community over the downturn. The reaction mostly came from Matic investors and hodlers. Many Matic supporters called the crash a “dump by the founders”, and many continued that Matic is not a solid project.
Nobody has learned from 2018. Please invest in solid projects, no pump & dump. Be careful! pic.twitter.com/6pygx3nAT6
— The Crypto Candy 🍭 (@TheCryptoCandy) December 10, 2019
Matic price collapse comes a little surprising. However, it is just as much contagious. All the other IEO tokens from Binance took a big hit as well. Since the Matic IEO on Binance, the token price was up more than 200%. So, it is a fat finger or manipulation?
Unclear Matic token distribution
On the contrary, Matic Token distribution market analysis revealed that the top 100 holders collectively own 99.11% of the tokens. Out of the 10 million supply, the Vesting Contract, Market and Ecosystem, Matic Foundation, Binance hodl 9,911,470,937.07 tokens. Therefore there is a high chance of manipulation.
Just did some snooping around to find that the #Matic Network Foundation has transferred 1,495,322,715 $MATIC (15% of the supply, approximately $67,314,942 at ATH) in the past 50 days, of which from seems to have been sent for liquidation at #Binance. https://t.co/FLPl4HyfiO pic.twitter.com/dpYG8rMoHX
— Samuel JJ Gosling (@xGozzy) December 10, 2019
In percentage wise, 19% of the total Matic tokens are held by the team, and 55% of the tokens are in a vested contract. Therefore, 22% of Matic tokens trade on Binance and less than 9% of the total token supply is in the hands of other hodlers and/or investors.
The actual root of the Matic token price collapse is a ridiculous awry allocation of the Matic tokens. The arrangement creates a profoundly few participants and a low volume of activity. This scenario can create room for a classical pump and dump. In classical finance we call this “Fat finger effect” in the crypto world we call it “whales”. Consequently, accusations by some members in Cryptoshere point fingers at the MATIC team for manipulation isn’t precisely the case.
However, the team got the tokenomics wrong from their inception. Investors and project builders must consider these basics as a critical foundation.
Binance comment about Matic price crash
Earlier in the day, Changpeng Zhao, CEO of Binance commented about the Matic price collapse. He commented that this team is looking into the wild volatility of the Matic token. He was optimistic the plunge was not any form of Market colluding from the Matic team.
CZ wrote on Twitter:
“Our team is still investigating the data, but it’s already clear that the MATIC team has nothing to do with it. A number of big traders panicked, causing a cycle. Going to be a tough call on how much an exchange should interfere with people’s trading.”
In another post on Twitter, the Matic Network denied having anything untoward concerning the price downtrend. They assured hodlers the price would recover steadily.
“For token movement, We announced the release of ~0.25% (248mn) tokens as Oct unlock, which coincides with aggregated outward movement,” the statement intimated. “Foundation tokens are still there. MATIC will bounce back stronger than ever!”
Though investors have lost 70% of the value of their asset, at press time at 18:00 GMT, the ROI on Matic IEO was standing at 292.36%. But this only applies if investors bought MATIC at the time it came to the market in April 2019.
Author: AtoZMarkets.com reader Frisco d’Anconia wrote the “Why is Matic price dumping article?” article. You too can become a guest blogger on AtoZMarkets. Contact us now for more info.
What do you think about the latest Matic token news? Is there any Matic token manipulation or just some whale exited their position?