A Chinese MLM Ponzi scheme has become the fifth largest MATIC holder. The project’s transactions have led to increased gas fees on the network.
A multilevel marketing (MLM) ponzi project is the fifth-biggest holder of the MATIC token, according to on-chain data. Both crypto security service PeckShield and individuals in the crypto community have been talking about the development.
PeckShield said that the address associated with the Ponzi scheme had gathered about 22 million in MATIC, which surpassed the Binance hot wallet and would make it the fifth-largest holder. Wu Blockchain also spoke about the project, which launched in China.
One of the reasons why the project has come to the crypto community’s attention is that it has been responsible for a great deal of gas consumption. Over the past week, the address has consumed over 100,000 MATIC in gas fees. Wu Blockchain also pointed out that the number of transactions on the address went as high as 117,000, which resulted in the gas fees crossing 700 gwei.
There is little information about what the project does on Twitter, as it primarily operates on Chinese social media. The project, named ‘Avatar,’ apparently offers a referral staking protocol with very high rewards. Some in the crypto community have warned about the project, explaining how it offers suspicious returns.
Polygon’s Strong Start to 2023
The Polygon network and MATIC token have seen demand increase substantially in recent times. Several factors have pushed up the price of the MATIC token, now priced at around $1.21.
Among those developments is a zero knowledge-powered scaling solution. This will make Polygon much faster and more efficient, processing up to 10,000 transactions for less than $1. Such efforts have attracted the attention of investors and increased adoption levels.
Ponzi Schemes Continue to Affect Crypto Markets
Ponzi schemes appear to be heavily popular in the market at the moment, with many reported over the past few weeks. One project, called Dingo, was highlighted as a potential scam by a cybersecurity software firm. These types of projects have been around for years, and it doesn’t look like they will fade out of existence anytime soon.
Recently, authorities tracked down the creator of the infamous Squid Game scam token. Meanwhile, one of the co-founders of the OneCoin scam remains missing.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.
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