- 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.
The address 0xc7728354f9fe0e43514b1227162d5b0e40fad410 of a Chinese MLM project accumulated 22.37 million MATIC in a few days, surpassing Binance: Hot Wallet2 became the fifth largest MATIC holding address. This address has consumed 100,000 MATIC gas in the past 7 days.— Wu Blockchain (@WuBlockchain) February 13, 2023
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.
Wonder what the #1 Smart Contract on Polygon that's been eating up gas fees in the last couple of days is all about?https://t.co/feD11vM42fAvatar - PolygonA thread.