Investor fears over locked token sales have been alleviated by plasma following a 45% decline in the value of XPL over the last four days.
The CEO and founder, Paul Faecks, refuted accusations that team members had sold locked tokens and assured the community that all allocations are safe.
Plasma denies token sale rumors
Paul Faecks made the statement X, which has validated that no team member sold XPL. All investor and team tokens, he explained, were locked up over a period of three years with a 1-year cliff. The clarification came after much speculation that an insider was selling, causing the drastic drop in the price of XPL.
Criticism also spilled over to the composition of the Plasma team, with critics indicating that most of the staff were former employees of failed projects, Blast and Blur. Faecks explained that of the fifty employees in the company, three of them had been hired by these companies before. He also highlighted that the Plasma workforce comprises professionals from Google, Facebook, Square, Temasek, Goldman Sachs, and Nuvei.
On-chain activity raises community concerns
The issue came to a head when an anonymous account posted on-chain data, leaving the Plasma team in a state of high distress, claiming that it had transferred large amounts of XPL to exchanges. It has been argued that over 600 million tokens were transferred out by the end of September, with 250 million going to Binance, 120 million to Bitfinex, and 260 million going to other exchanges.
The anonymous user mentioned that Wintermute, a London-based market maker, might have been playing with these tokens. According to the analysis, Wintermute wallets were reported to have experienced high XPL movement in the period immediately after the release of the mainnet beta, casting doubt on whether there was organized selling.
Faecks, in turn, disapproved of any connection with Wintermute. He stated that Plasma has not contracted the company to provide market-making services and is unaware of any information beyond what is publicly available. He declined to comment on the issue and said that the project was still working on developing its payments network.
XPL token distribution and supply
XPL is the native token of Plasma, which is used to settle transactions, stakeholder, and other ecosystem incentives. The token has similar functionality to Bitcoin on the Bitcoin network and Ether on the Ethereum network.
A public sale of plasma took place on July 17, during which one billion tokens, or 10% of the total, were distributed to participants. At the release of the public mainnet beta on September 25, non-US purchasers received the unlocked tokens, while US-based investors were subject to a 12-month lock-up period, expiring in July 2026.
Plasma donated forty percent of the ten billion supply of tokens towards the ecosystem and growth. Of these, 800 million were unlocked upon launch to facilitate liquidity, DeFi initiatives, and exchange integrations. The remaining 3.2 billion tokens will be issued over a three-year period, which is scheduled to conclude in September 2028.
Approximately 2.5 billion tokens are under the control of the development team. They are pegged on a one-year cliff with part to be released over two years, as Faecks confirms.
