What is the Matic Outreach Program?
On December 10th, MATIC was subjected to a coordinated attack which resulted in the price plummeting ~70% in a matter of minutes before recovering slightly and stabilizing. At the time and in the hours proceeding, this event understandably caused a great deal of concern among the community. The manipulative and coordinated nature of this predetermined attack and resultant rampant spread of FUD accelerated the confusion and resulted in further panic and uncertainty, especially in regards to the Matic team’s involvement.
We want the community to know without doubt that not only is it clear that the Matic team played no role in the attack, but also that it will not prevent us from moving forward in the slightest. We were quick to regain control of the situation and began to set the record straight almost immediately through our Outreach Program. These efforts include multiple AMAs, interviews and article releases to clarify the situation.
Communication and transparency has always been of the utmost importance to the Matic team. We will not rest until each and every member of the community has had any concerns or questions addressed.
The important point we wish to portray is that although this has been an unfortunate situation for Matic and our community, we have come back from this fighting and it will only make us stronger and more determined on our journey.
Background: What Happened on December 10th?
On the morning of December 10th, the price of MATIC plummeted 70% in a matter of minutes before recovering slightly and stabilizing. Occurring at the dead of night in India, the event took the Matic team completely off-guard. The team awoke to the chaos that ensued in the aftermath of the price drop.
Coordinated & Premeditated Attack
In the weeks leading up to the event, there was a lot of upwards price movement due to all the fundamental progress of the project – the price of MATIC increased a significant amount in a short period of time. Due to these high levels of interest from traders and investors, multiple exchanges also enabled margin trading for the MATIC token. Unfortunately, this made MATIC a prime target for manipulative whales looking to profit from margin trading.
The most likely course of events is that whales had gradually accumulated large positions in the market and began dumping them on the spot market on the morning of December 10th. Meanwhile, they also acquired very large margin short positions in exchanges which allowed leveraged trading of MATIC. By selling heavily on the market, they initiated this large dump. Once the price starts sliding down in such an event, it’s a cascading effect in terms of the activation of stop losses etc. Should there have been enough stop losses in place, even one large sell order could have caused many stop losses to trigger, thereby inducing more selling, and on and on.
Of course, we cannot prove that this is definitely the case. We are not traders and do not have backgrounds in trading. However, this seems to be the most likely scenario given the events that unfolded and from analysing the market movement. We have also spoken to many expert traders who have told us that this may have happened. Many people have told us that shortly before the actual downward price movement started happening, there were huge amounts of dollars worth of short positions taken on some exchanges which allow futures trading of MATIC.
FUD Regarding the Matic Team’s Involvement
The main cause of the initial FUD regarding the team’s potential involvement was a Twitter user who claimed that he had conducted some analysis of the wallets controlled by the Matic team and found that 1.5bn MATIC tokens had been moved from our wallets to Binance for liquidation. This is simply not true (the amount of tokens moved from our wallets was ~270m, approximately the amount specified as part of our October unlock) and that person even apologised multiple times for spreading misinformation.
The Matic team has always been completely transparent when it comes to providing the wallet addresses controlled by the team. You can check the Foundation wallet here and see for yourself that in fact only ~2.7% of tokens had been moved, the rest are still there. The blockchain doesn’t lie.
We covered this topic in a dedicated article on the day of the attack, please see here for more details.
Changpeng Zhao (CZ), CEO of Binance, was quick to come out publicly in support of the Matic team, clarifying that Binance’s own analysis clearly showed no misconduct on the part of Matic Network.
Regardless, the damage was already done. In the hours proceeding this FUD, many accounts jumped on the bandwagon believing this person without doing their own research to verify these claims. This FUD was circulated around social media, and even after we clarified the situation and the FUDder issued an apology, this misconception stuck with people of the wider community. We even saw a huge stream of accounts join our social groups just to spread this FUD amongst our core community without listening to reason and reality. The rumors were even unfortunately covered by some smaller media outlets which were trying to capitalize on the attention caused by the event, further spreading misinformation without conducting their own due diligence.
The fact that the coordinated attack was planned and executed at around 4AM IST time meant that the Matic team was not active to deal with the situation for a few hours, as it was the middle of the night for us. This lack of response caused further concern among the community who were already hearing rumors of an ‘exit scam’. This seems to have been the intention of the attacker/s.
This spreading of FUD by misinformed individuals and trolls understandably caused a lot of panic among the community. This is the unfortunate state of our industry at the moment; many people are easily persuaded by those who claim to have ‘facts’, without themselves verifying whether this information is in fact true or false.
Connecting with the Community for an Emergency AMA Session
Still in the midst of all the chaos, we were quick to conduct a live AMA with the Matic community to address all questions and concerns at the time to the best of our ability.
Let me summarise all of this. Whatever has happened, to the whole Matic community I would like to give a message that this was unfortunate for us, but it will not prevent us from moving forward. We have grown to become one of the top projects in the space, and you guys are an incredible community. This unfortunate event happened due to some kind of coordinated attack by whales using short positions to their advantage. Matic has a unique amount of fundamental value, and although we are still reasonably small we have captured a lot of global attention. Due to this, MATIC has been listed on multiple exchanges with leveraged trading available. It seems that these whales have taken advantage of this situation and instigated a lot of FUD to panic the community. This seems to be a very coordinated attack.Sandeep Nailwal, COO & Co-Founder – Matic Network
Our response will be to keep working hard, keep facilitating the aggressive adoption curve we’ve been seeing, and keep delivering on our promises in terms of development and big updates. We have a lot of exciting things in the pipeline, the good things will keep coming and we will keep moving forward with our fundamental progress on all fronts. With staking, mainnet, and a lot more adoption coming up, our progress will move forward stronger than ever.
This is nothing more than a small bump in the road on the exciting journey for Matic. To our community I would say to stay strong, this is the time we need to unite to push forward together and continue our journey in becoming the top altcoin in the market.
Overwhelming Support from the Wider Community
We have been humbled by the overwhelming amount of support from the global blockchain community after the attack took place, who came to our aid in our hour of need.
A staggering amount of the wider blockchain community, including industry leaders, top developers, funds, research companies, Ethereum event organisers – all highly reputed and respectable members of the industry – have came out publicly to speak in favour of the Matic team and have vouched for our integrity and credibility. These are just a few examples:
George Cao, Founder & CEO – BitMax
Peter Kim, Head of Engineering, Wallet – Coinbase
Eric Conner – Ethereum Foundation
Keerthan Shetty, Director – Bitbns
Gautam Chhugani, Investment Analyst – Alliance Bernstein
Nick White, Co-Founder – Harmony
Beniamin Mincu, Founder & CEO – Elrond
- Rene Schmidt, Project Lead – Chainbreakers: https://twitter.com/reneil1337/status/1204297605053894657
- Ivan Golovko, CMO – LTO Network: https://twitter.com/IvanGBi
- MIH Ventures: https://twitter.com/mihventures/status/1204291916457627648
- Ankitt Gaur, Founder – Tradelink: https://twitter.com/AnkittGaur/status/1204300208403709952
- Hrishikesh Huilgolkar, Founder – Razor Network: https://twitter.com/hrishikeshio/status/1204327809209917446
- Ankr: https://twitter.com/ankr/status/1204381046390841344
- Crypto Differ: https://twitter.com/CryptoDiffer/status/1204356770560446464
- Sherman Lee, Co-Founder – Raven Protocol: https://twitter.com/SHERM8N/status/1204434743703547904
- CryptoControl: https://twitter.com/cryptocontrolio/status/1204706469041471490
- Michael Weiksner, Founder & CEO – Pocket Full of Quarters: https://twitter.com/weiks/status/1205222320480178176
- Ahmed Al Balaghi, Co-Founder – Biconomy: https://twitter.com/AraBalaghi/status/1205407146868793349
A large number of people in the industry know us personally due to our supporting of so many hackathons and events globally, and they wanted to come out publicly to vouch for the integrity of Matic Network. For this support, we could not be more grateful.
To all listed above, the many more not listed, and all of our community members who stood strong by our side and offered their support in the wake of the attack, the whole Matic team would like to say a huge thank you!
Our Outreach Efforts Thus Far
We wasted no time in the hours and days proceeding the attack in connecting with the community on all possible platforms and outlets to answer any and all questions and concerns which many people understandably had. These included various live interviews and AMAs, alongside our communication put forth through our official channels.
Live interview with Crypto Wendy O
We had very clearly communicated that for the October unlock there would be roughly 250 million tokens (around 2.5%) that will be dispersed to the investors and advisors, which were covered in the details of the October release. All other tokens are still in the Foundation wallet, they did not move at all.Sandeep Nailwal, COO & Co-Founder – Matic Network
Twitter AMA with Signal Express
Interview with Blockchain Brad
People should ask 2 questions. Whoever is thinking the Matic team is involved: do you think that a project backed by Coinbase, Binance Launchpad, had the best performing IEO, and is the top-most adopted Layer 2 in the space would commit this kind of suicide? Second, people who are saying Binance could be involved: we are the crowning jewel of Binance Launchpad IEOs, so why would Binance damage their own reputation in this way?Sandeep Nailwal, COO & Co-Founder – Matic Network
Twitter AMA with Crypto VIP Signal
Interview with iBlock TV
There are some people who are conducting data analysis surrounding the market movement and more expressing interest in doing so. We would like to say if anyone is doing any kind of data crunching and you need any help from us, just ping me on Telegram or tag me on Twitter. We will be providing our complete support to anyone wishing to do so. There already a few teams in the process of initiating that and we are helping them completely. We pride ourselves on our transparency and want everyone to know the truth behind these recent events.Chandresh Aharwar, VP of Marketing & Strategy – Matic Network
Interview with Rice Crypto
We have received a lot of support. The most heart-warming thing is that on Twitter, almost every partner of ours and a lot of other players in the space came out in support. People know us because we support so many hackathons and events and they wanted to vouch for the integrity of Matic Network.Sandeep Nailwal, COO & Co-Founder – Matic Network
Interview with Arcane Bear
Within 10 minutes, a huge amount of tokens were sold on the market and the price dumped 70%. Directly afterwards, many FUD accounts started posting unsubstantiated and uncalculated claims citing, for example, Etherscan. When we woke up and started countering the FUD, most of these people simply apologised and retracted their statements. By that time, however, the damage had been done. We are a community project, and we want to reach out to each and every person affected to clarify the situation as best we can.Sandeep Nailwal, COO & Co-Founder – Matic Network
We’d like to thank everyone who has invited us to their channel/platform to allow us to share our insights with their communities and to address the recent events that have taken place.
The Matic team will continue to engage in many more AMAs and interviews covering the topic. As we have said, we will not rest until we have reached every single person who might still have questions or doubts regarding the recent situation in order to provide all information needed for them to come to their own reasoned conclusions.
Moving Forward: Onward in our Exciting Journey
It’s not how hard you fall that matters in life, it’s how quickly you can stand back up which matters most. We have not only gotten quickly back to our feet, with the overwhelming support of the community, but are more determined than ever to move forward on our journey stronger than ever.
Moving forward, we will continue to ramp-up the progress of our fundamentals, in-line with our plans previously laid out. These include out various staking endeavours, further adoption and working towards the highly anticipated launch of our full mainnet in the next few months.
For example, even in the short time since the event we have released our most recent Project Update, unveiled a sneak preview of our staking interface, assisted BetProtocol in a hugely successful token sale using the MATIC token, launched the first of our pre-staking initiatives with top-tier exchanges, announced multiple further collaborations and much more. We are getting stronger every day.
We hope the community appreciates our efforts to be as transparent and proactive as possible in the wake of this attack. We sincerely appreciate the support of each and every one of our community members. We would not be here in this position today as one of the leading blockchain projects without our amazing community, and together we will move forward from this blip and will accelerate our progress on our journey to facilitate the mass adoption of blockchain.
We’re more excited and motivated than ever to be BUIDLing the infrastructure for Web 3.0!
If you have any questions or concerns which were not addressed by this article, please reach out to us and we will be happy to clarify any remaining queries.
The best place for direct communication is our Telegram group: https://t.me/maticnetwork