According to blockchain security and data analytics firm PeckShield, wallet addresses linked to China’s multilevel marketing (MLM) Ponzi scheme have been collected more than 22.37 million MATIC in the past few days.
A Chinese MLM Ponzi scheme, known as ‘Avatar’ has become the fifth largest holder of MATIC after surpassing the current holding held by hot wallet Binance 2.
Invest In MATIC As A Potential Investment
The Chinese digital asset project has gained a lot of attention in the crypto community due to the huge consumption of Polygon gas fees as a result of recent transactions. According to on-chain data shared by PeckShield, the address has used more than 100,000 MATIC in gas costs worth $122,000 during the past week.
On-chain analysis by PeckShield showed that Ponzi-related wallet addresses completed more than 117,000 transactions on February 12, an activity that caused Polygon’s gas costs to increase by more than 700 gwei.
While there is no information about the Chinese Ponzi project, the scheme is known to work on Chinese social media and offers a referral staking protocol with very high rewards (referral stake 1% APR daily). Some members of the crypto community have warned against the project, due to the dubious monthly returns (with minimal risk) offered to participants.
Ponzi schemes use a controversial hierarchical system called ‘level marketing’ which requires users to generate profits by marketing services and products and recruiting others to join the network. In these Ponzi schemes, the funds raised from new investors are usually used to pay the initial investors.
The new activity of the project shows the rising demand for MATIC among investors (increasingly investing in cryptocurrency) and the appetite for crypto as an investment. It appears that individuals using Ponzi schemes use derivatives and leveraged products and other complex trading strategies to trade MATIC as part of their program to make a profit for their users.
MATIC Price Action
In the end, Polygon (MATIC) has to witness an impressive turnaround, a 55.29% increase in price over the past 30 days. The uptick brought the price of the digital asset to $1.20 as of February 6, 2023. Due to its impressive price increase, crypto investors have turned to Polygon as a must-buy digital asset.
Although Polygon has had a strong surge over the past 30 days, it has had a tough time over the past 12 months. This is still down 42.64% from the record high set last year.
MATIC price falls to $1.55 | Source: MATICUSD on TradingView.com
The latest price drop of cryptocurrencies seen last week is reflected in Polygon’s current price. At the time of writing this paper, MATIC is trade the price is at $1.17, down 9.17% in the last 24 hours, with a trading volume of $737 million. With a market capitalization of $10.2 billion, Polygon is currently #10 among the cryptocurrencies listed on Coinmarketcap.
Featured images from Unsplash, Charts from TradingView