MATIC Allocation Anomalies Trigger Investigation into Polygon Foundation Practices
ChainArgos uncovers irregularities in MATIC token flows, shedding light on potential collaboration between Polygon and Binance, as Hermez Network takes evasive action amid growing concerns.
In a comprehensive analysis conducted by ChainArgos, serious doubts have been cast on the adherence of Polygon's token distribution to its publicly declared plan. The investigation, particularly focused on the launchpad sale and staking tokens, exposed anomalies in the flow of tokens within the Polygon Foundation.
A key observation pointed to an unusual pattern of outflows from a "vesting contract" responsible for unlocking token flows. Moreover, the foundation's contract, purportedly managing both operations and token allocations, displayed irregular outflows, raising significant concerns.
Delving deeper into the foundation's outflows, the analysis highlighted a top entry of 1.2 billion MATIC tokens seemingly linked to the launchpad initiative. However, it was the staking contract flows that triggered suspicion.
The allocation table suggested a flow from 400 million to 1.2 billion MATIC, but actual data revealed a different story. A discrepancy of 400 million tokens was traced to an address labeled 'Binance 33' on Etherscan.
The revelation that 400 million MATIC tokens were missing prompted further investigation. ChainArgos traced a flow of 300 million MATIC from the Binance 33 address to another address, 0x2f4ee. Notably, 0x2f4ee received 467 million MATIC tokens from an address labeled “Matic: Marketing & Ecosystem.”
The involvement of the marketing and ecosystem wallet added complexity, as the address transferred a substantial amount, 767 million MATIC, to Binance exchange wallets. With a transactional volume nearing a billion dollars, this collaboration between the Polygon team and Binance, bypassing standard token distribution protocols, raises concerns of a potential market top.
"This isn't just some Binance-adjacent thing. The team and Binance are clearly working together to feed these tokens out the back. As we are talking about 767 million tokens, this is something like a billion dollars," ChainArgos analysts emphasized.
Accompanying the findings, ChainArgos shared a chart illustrating outflows from 0x2f4ee and encouraged readers to compare it with the MATIC token's price action. The chart indicates an increase in outflows during March 2023, coinciding with a local high in MATIC's price, followed by a nearly 60% drop from March to June 2023.
Amidst these revelations, Hermez Network, acquired by Polygon for $250 million in 2021, took notable action. The protocol unstaked and deposited 4.5 million MATIC, valued at approximately $3.81 million, into the crypto trading platform SwissBorg. This move occurred against a backdrop of growing concerns about the transparency of Polygon Foundation's MATIC token allocation. Despite this, Hermez Network retains a significant stake of approximately 39.92 million MATIC, valued at around $34 million.