Plasma Founder Rejects Insider Selling Claims as XPL Token Drops Over 50%
A steep drop rocked the ecosystem this week when XPL, its native token, plunged over 50% shortly later than the highly anticipated launch of its mainnet beta and token. The price, which briefly surged to $1.70, rapidly reversed and sank to $0.83 within days. This sudden loss triggered widespread conjecture and anger among retail investors, who began searching for explanations for the swift decline.
Paul Faecks Answers Claims of Insider tradeing
later than more and more people were worried, Plasma founder spoke out about claims of insider tradeing. He strongly disputed that his team was involved in any recent token sales, emphasizing that both investors and team members must adhere to strict vesting timelines, which include a three-year lock and a one-year cliff. Faecks said, “No team members have sold any XPL,” to assuage the anxieties of the project’s fans.
Community and On-Chain Investigators Look Into Token Movements
Even later than the project’s official reassurances, skepticism persisted among some community members, who began examining on-chain data, the public ledger of all token transactions, for signs of unusual activity. Observers speculated that time-weighted average price (TWAP) tradeing might be occurring, a practice where large sales are broken down into many small trades over time to reduce their impact on the token’s market price.
Independent investigator noted that over 600 million tokens were transferred from the team vault (a secure location for storing team-held tokens) to platforms prior to the launch. This caused more community members, including defenders of decentralized finance (DeFi), to question the transparency of these activities.
Ecosystem And Growth in Token Sales Are Causing A Lot Of Debate
Community members also questioned whether other token allocations, especially those set aside for “ecosystem and growth,” may have been traded during the downturn, which added to the argument. Faecks’s public messages focused on team and investor tokens, but critics said there was still considerable uncertainty about what would happen to the other .
Some others thought this was a purposeful omission, believing it might be an attempt to prevent people from considering how programmed or discretionary distributions could impact the market.
Plasma’s Position on Market Makers and What Comes Next
Accusations against the crypto market-making company Wintermute added to the controversy. Faecks completely rejected any formal tie, telling the community that neither Plasma nor its team had hired Wintermute for liquidity services. He made it clear that “We have the identical information as the public on Wintermute’s ownership of XPL,” and he reiterated the company’s commitment to transparency and continued growth.
​As well-known X accounts and independent analysts continue to examine, Plasma’s founders have promised to keep their eyes on building the project’s vision. However, the sudden decline in the price of , combined with ongoing concerns about token management, highlights the importance of continued openness and proactive communication in rebuilding trust within the community and reviving momentum.
