Plasma founder Paul Faecks denied accusations of insider selling after the project’s native token, XPL, dropped by more than half its value over the weekend.
On Thursday, Faecks rejected speculation that the team offloaded tokens into the market, stressing that investor and team allocations remain locked for three years with a one-year cliff. “No team members have sold any XPL,” he said.
Plasma officially launched its mainnet beta along with its native Plasma (XPL) token on Sept. 25. The layer-1 blockchain is designed to make stablecoin payments cheaper and faster.
Following the launch, XPL spiked to almost $1.70 on Sunday before tumbling steadily to $0.83 by Wednesday, erasing more than 50% of its value, according to TradingView data.
Community concerns and onchain investigations
Because of the dramatic drop, many community members suspected that the team may have engaged in time-weighted average price (TWAP) selling. In this algorithmic strategy, a large sell order is broken down into smaller, equally sized orders, each executed at regular time intervals.
Community members quickly turned to onchain analysis to investigate the flows of XPL following the dump.
Independent sleuth ManaMoon pointed to movements from the Plasma team vault. The community member said that the wallet sent more than 600 million XPL tokens to exchanges in the days leading up to the launch.
“Personally, I believe that someone was TWAP selling an excessive amount of tokens that retail buyers could not withstand,” ManaMoon wrote.
A community member with the handle crypto_popseye blamed the team and the algorithmic trading firm Wintermute for crashing the prices. “Plasma $xpl pretty much destroyed their chart and momentum, and I hope their project fails,” he wrote.
Despite the community’s remarks, the Plasma team denied any relationship with Wintermute and said that they have the same information as the public.
“We have not engaged Wintermute as a market maker and have never contracted with Wintermute for any of their services,” Faecks said. “We have the same information as the public on Wintermute’s ownership of XPL.”
Related: Aster reimburses users after XPL perpetual glitch sends price to $4
Community probes ecosystem and growth tokens
After Faecks’ post, crypto_popseye responded, questioning the founder’s message. The community member accused Faecks of using wording that ruled out team sales but left the status of other token categories, like their “ecosystem and growth” tokens, unclear.
“Pretty clear they have been sold, but you are wording your tweet to make it seem like they haven’t been sold,” the user said.
In his post, Faecks insisted that their team is “laser-focused on building the future of money” and will not comment further.
Cointelegraph reached out to the Plasma team for comments, but did not receive a response by publication.
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