Polygon (MATIC) Down 17% in the Last Seven Days Ahead of zkEVM Launch

• MATIC is trading at around $1.23, down 4% in the last 24 hours.
• MATIC is the only token from the top ten largest cryptocurrencies to be down more than 10%.
• The selloff might be related to a Chinese MLM project dumping MATIC tokens.

Polygon (MATIC), one of the most popular alternative cryptocurrencies in the market and a Layer-2 powerhouse, has taken a hit in the last seven days.

MATIC is down around 17% in the last week, according to data from CoinGecko. The token is trading at around $1.23, down 4% in the last 24 hours.

MATIC seven-day price chart. Source: CoinGecko.

MATIC is the only token among the top ten tokens that’s fallen more than 10% in the last week. However, other tokens like Avalanche (AVAX), Solana (SOL), Polkadot (DOT), and others have all fallen 14-16% in the last seven days.

The sharp selloff made MATIC fall to tenth place in the top ten largest cryptocurrencies. It now has an $11.09 billion market cap and is behind Dogecoin (DOGE), which it had overtaken just a few days ago.

While it’s unknown why MATIC is trading 17% lower, the downturn may be related to a potential Chinese multi-level marketing (MLM) scheme selling millions of MATIC tokens.

Suspicious Chinese MLM Scheme Sells MATIC

The sharp downturn in the price of MATIC can be related to a suspected Chinese MLM scheme Avatar selling MATIC tokens.

The wallet associated with the project, which offers sky-high staking rewards, currently holds over 18.1 million MATIC tokens, worth around $22.3 million at the time of writing. At its peak, the wallet held around 26 million MATIC tokens and was the fifth-largest holder of MATIC.

It’s unclear whether the potentially scammy project sold or transferred around 8 million MATIC tokens. However, given the price action of MATIC, it would come as no surprise if the people behind Avatar had sold a good bunch of those tokens.

However, the price of MATIC might be in for another pump soon as Polygon’s zkEVM scaling project is set to launch in a few weeks.

Polygon Prepares for zkEVM Launch

MATIC might experience another significant price increase in the next few weeks thanks to the upcoming launch of Polygon’s zkEVM scaling solution.

zkEVM stands for zero-knowledge Ethereum Virtual Machine, a scaling solution that uses zero-knowledge proofs to prove the validity of transactions finalized off-chain. zkEVMs are considered the holy grail of Ethereum scaling because they offer high throughput and low transaction costs.

While launched on March 27, Polygon’s zkEVM might be considered the first zkEVM deployed on Ethereum mainnet and available for users. zkSync has also deployed its version of the zkEVM on mainnet but it’s available only to selected developers.

On the Flipside

• The MLM project still has millions of MATIC tokens. If the people behind the project decide to sell all tokens and rug their investors, the price of MATIC will slide even further.

Why You Should Care

Polygon investors should consider following the address linked to the MLM project holding millions of MATIC tokens to better position for a possible dump.

Read more about Polygon’s zkEVM:

Polygon (MATIC) Announces Launch Date of Its Highly Anticipated zkEVM