Contents
- Crypto Ponzi Avatar awarded $26 million in Polygon (MATIC) tokens
- Why is this dangerous?
Chinese Crypto Ponzi Becomes Top Polygon Holder (MATIC), Here’s How To Do It
Vladislav Sopov
Avatar theme “passive income” among top gas consumers in leading EVM compatible blockchain
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A popular Ponzi scheme that exploits the surrounding hype Avatar: The Way of the Water sci-fi movie has become the fifth largest holder of Polygon (MATIC), a core cryptocurrency in the Polygon network (MATIC) ecosystem.
Crypto Ponzi Avatar awarded $26 million in Polygon (MATIC) tokens
PeckShield, a leading blockchain cybersecurity firm, noticed that an account linked to Avatar, a Chinese Ponzi scheme, jumped to the top ranking of Polygon (MATIC) token holders. In a few days, it managed to collect over 23.1 million Polygon (MATIC) tokens, which is equivalent to $26 million.
Chinese journalist and insider Colin Wu added that the project is looking more and more like a “multi-level marketing” (MLM) scheme. His sources claim that Avatar users are being offered an incredibly high interest rate of over 1-2% daily. Since the project only targets Chinese audiences, it has no social media activity on Twitter, Facebook or Reddit.
Initial deposits are limited to 1000 Polygon (MATIC) tokens; users can lock their money for three to thirty days.
So far, the main contract of this scheme is the fifth largest account on the Polygon network (MATIC); it surpassed even the hot wallets of Binance (BNB), the largest crypto exchange. At press time, the platform is responsible for 0.25% of all Polygon (MATIC) tokens in circulation.
The team is also among the largest gas consumers in the Polygon (MATIC) ecosystem. In seven days, it spent over $120,000 on gas taxes. As of 13 February 2022, it is the fourth most active gas consumer; it uses over 3.5% of the gas on the Polygon network (MATIC).
Why is this dangerous?
First, such arrangements create enormous transaction pressure on the network. In May 2020, the Ethereum (ETH) network became almost unusable thanks to the activity of MLM and Forsage Ponzis: the transactions became too expensive and too slow.
The activity surrounding Avatar has already pushed Polygon’s (MATIC) gas price to multi-month highs. In recent days it has surged to levels not seen since the collapse of the FTX/Alameda ecosystem.
The Avatar team may start dumping these tokens, causing unhealthy volatility. Polygon (MATIC) is the most popular symbol of the burgeoning “ZK mania”, so it can be very profitable for Ponzi creators to explore this hype.
