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Chinese Crypto Ponzi Becomes Top Polygon (MATIC) Holder, Here's How

Mon, 02/13/2023 - 12:30
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Vladislav Sopov
Avatar-themed 'passive income' among top gas consumers in leading EVM-compatible blockchain
Chinese Crypto Ponzi Becomes Top Polygon (MATIC) Holder, Here's How
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A trending Ponzi scheme that leverages the hype around Avatar: The Way of Water sci-fi movie has become the fifth largest holder of Polygon (MATIC), a core cryptocurrency of the Polygon network (MATIC) ecosystem.

Crypto Ponzi Avatar allocated $26 million in Polygon (MATIC) tokens

PeckShield, a leading cybersecurity firm in blockchain, noticed that an account associated with Avatar, a Chinese Ponzi scheme, jumped to the top rankings of Polygon (MATIC) token holders. In a few days, it managed to amass over 23.1 million Polygon (MATIC) tokens, which is equal to $26 million.

Chinese journalist and insider Colin Wu added that the project looks more and more like a "multi-level marketing" (MLM) scheme. His sources claim that Avatar users are offered unbelievably high interest over 1-2% daily. As the project targets only Chinese audience, it has no social media activity on Twitter, Facebook or Reddit.

Initial deposits are capped at 1,000 Polygon (MATIC) tokens; users can lock their funds for three to thirty days.

So far, the main contract of this scheme is the fifth largest account on the Polygon (MATIC) network; it surpassed even the hot wallets of Binance (BNB), the largest crypto exchange. By press time, the platform is responsible for 0.25% of all Polygon (MATIC) tokens in circulation.

Its team is also among the largest gas consumers in the Polygon (MATIC) ecosystem. In seven days, it spent over $120,000 on gas fees. As of Feb. 13, 2022, it is the fourth most active gas consumer; it uses over 3.5% of the gas on the Polygon (MATIC) network.

Why is this dangerous?

First, such schemes create an enormous transactional pressure on the network. In May 2020, the Ethereum (ETH) network became almost unusable thanks to the activity of the MMM and Forsage Ponzis: the transactions became too expensive and too slow.

This Is Why It’s So Expensive to Send Ethereum Now

The activity around Avatar has already pushed Polygon's (MATIC) gas price to multi-month highs. In recent days, it surged to levels unseen since the collapse of the FTX/Alameda ecosystem.

The Avatar team can start dumping these tokens, causing unhealthy volatility. Polygon (MATIC) is the most popular token of the burgeoning "ZK mania," so it might be really profitable for Ponzi creators to explore this hype.

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About the author

Blockchain Analyst & Writer with scientific background. 6+ years in IT-analytics, 3+ years in blockchain.

Worked in independent analysis as well as in start-ups (, Monoreto, Attic Lab etc.)