- MATIC coin gained 340% in October and November this year
- The project team was accused of dumping their tokens on the market which caused a panic sell-off
- The coin lost 75% of its value in one day only
Matic Network, a platform that provides solutions for public blockchains, has been in the spotlight in the previous few weeks due to a panic sell-off that its native coin MATIC experienced in the second week of December.
At the end of September, the platform released a new product which equips Ethereum developers to easily build and test their applications. Following the release of its new product, the coin had gained more than 340% in value between the beginning of October and December 09, when it took a nosedive after weeks of gains.
The new product attracted much interest and attention from developers and blockchain community as it provided interesting and easily implementable solutions.
However, it took a tweet from Samuel JJ Gosling, the founder of Validity Crypto, to end the honeymoon for Matic network.
Essentially, Gosling called out the project founders for dumping their tokens on the market to make personal profit. Gosling then quickly tweeted again to “deeply apologise for providing an inaccurate claim”, however, the avalanche had already started.
The MATIC coin lost 75% of its value on the same day. A few days later, the price pushed even lower to hit a 2-month low and the price has failed to recover since.
In response, Matic’s COO, Sandeep Nailwal, pleaded innocence and called the most recent attack an “evident manipulation”.
Founder of a major cryptocurrency exchange Binance, Changpeng Zhao, jumped in to defend the team behind the Matic project.
Where next for Matic?
Regardless of whether Gosling’s allegations were true or not, the damage has been done. MATIC coin is currently trading around the $0.014 mark, which is substantially lower in comparison to the all-time high of $0.0435 set on December 09.
Three weeks have passed since and the coin failed to recover and return to previous highs. The trust in the coin, and the project behind the coin to a certain extent, has evaporated. There are questions asked and still not a great deal of answers.
Hence, the best possible action to be taken from the side of the investors is to avoid investing in Matic until the dust settles; you may wish to consider buying other cryptocurrencies. The nosedive may have been exaggerated due to low liquidity in the market, however, it still doesn’t look great as investors always seek clarity around crypto projects and their management team.