Sharp Price Drop Fuels Speculation and Community Outrage

Paul Faecks, founder of Plasma, has firmly denied accusations of insider selling after the project’s native XPL token plummeted by more than 50% just days after its mainnet beta launch.

The price swing sent shockwaves through the crypto community, stoking rampant speculation that team members may have offloaded large quantities of tokens into the open market.

On Thursday, Faecks addressed growing rumors, insisting that both investor and team allocations remain securely locked for three years with a one-year cliff.

“No team members have sold any XPL.”

Plasma’s mainnet beta and its high-profile XPL token launched on September 25, aiming to make stablecoin payments faster and more affordable. After an initial rally to nearly $1.70, XPL dropped sharply to $0.83 within days, cutting its market value in half according to TradingView.

Onchain Investigations Spotlight Team Token Movements

The steep decline spurred community members to probe Plasma’s token flows using onchain analytics. Independent researcher ManaMoon discovered that over 600 million XPL tokens were transferred from the Plasma team vault to exchanges before the mainnet launch—a move many viewed as possible evidence of a time-weighted average price (TWAP) selling strategy, where large sell orders are algorithmically broken into smaller chunks to avoid abrupt market impact.

Community members quickly turned to onchain analysis to investigate the flows of XPL following the dump, with sleuths like ManaMoon quickly pointing their fingers at the Plasma Team, highlighting how the company has sent more than 600 million XPL tokens to exchanges in days leading to the launch.

"Personally, I believe that someone was TWAP selling an excessive amount of tokens that retail buyers could not withstand."

Another crypto commentator crypto_popseye pointed fingers at both the Plasma team and trading firm Wintermute, alleging their involvement in crashing XPL’s price and undermining project momentum.

"Plasma $xpl pretty much destroyed their chart and momentum, and I hope their project fails."

However, Faecks categorically denied any relationship with Wintermute. In a statement, he said

“We have not engaged Wintermute as a market maker and have never contracted with Wintermute for any of their services… We have the same information as the public on Wintermute’s ownership of XPL.”

Debate Heats Up Over Ecosystem and Growth Token Sales

Despite Faecks’ assurances that team tokens remain untouched, critics questioned the status of other categories such as “ecosystem and growth” allocations.

Crypto_popseye called out the founder’s ambiguous language, suggesting it was crafted to address team allocations while leaving out the details of other token pools.

“Pretty clear they have been sold, but you are wording your tweet to make it seem like they haven’t been sold.”

Faecks responded by reaffirming the company’s commitment to building on its stablecoin vision, declaring the team is “laser-focused on building the future of money” and will not engage further in the controversy.

XPL Tanks While the Market Rises — Is Plasma Facing a Trust Crisis?

In the market, reality is biting hard. XPL has crashed 43% in just four days, now trading around $0.94 and sliding another 6.6% in the last 24 hours — a sharp contrast to the wider crypto market’s recovery. The plunge has fueled speculation that investors are losing confidence in Plasma, with some already questioning the project’s credibility.

But to write Plasma off as just another overhyped token would be premature. Backed by a $1.69 billion market cap and nearly $2.9 billion in daily trading volume, XPL still commands serious attention from institutional players. Its long-term bet on powering stablecoin payments and digital settlement networks could yet reignite demand.

For now, Plasma stands at a crossroads. With $5.5 billion in total value locked, the project must turn this crisis of confidence into a show of resilience. In crypto, doubt can go viral faster than adoption — and the true test will be whether the team can deliver on promises and prove this crash is nothing more than turbulence on the way to growth.