The mStable project found itself in hot water yesterday, resulting in the team’s apology for what the community saw as an unannounced token drop, coin dump, and lack of transparency. And there is something to be learned about communication from their experience.
A lot can happen in a mere day, as shown by the recent controversy involving mStable, a project that “unites stablecoins, lending and swapping into one standard,” and their protocol token Meta (MTA). Per CoinGecko, on July 21, MTA price dropped by 40%, to USD 2.35, recovering to around USD 3 since.
MTA price chart:
Yesterday, the accusations flew within the Cryptoverse that the “unbeknownst to its community,” as DAO Maker tweeted, the mStable team airdropped over MTA 3 million to the seed investors when the token was trading at USD 4, after selling 6.5 million tokens in a seed round at USD 0.15.
“That’s an “airdrop” to seed investors, valued at USD 13.3M, giving seed investors a paper return of over 13x, on just a portion of purchase,” said DAO Maker, adding that the MTA volume then went up, while the price crashed. “This points to a potential dump by the seed investors.”
Many commented on the event similarly, with some suggesting that dumping the tokens then apologizing was the plan all along, while others pushed back, suggesting other possibilities.
OK but it was all put up front and known. This clearly shows what is going to happen.
— eric.eth (@econoar) July 21, 2020
The team behind the project publicly apologized for the lack of transparency, stating that the team members living in different time zones and thus some of them being offline during this event, made it difficult to coordinate and respond to the situation sooner. They added that, while they had provided accurate information about the token distribution, it was “too high-level” and could’ve been misinterpreted.
“The community observed an unexpected unlock of MTA tokens — we understand why this may have come across as unexpected and acknowledge that we should have communicated this more clearly,” said James Simpson, CEO and Co-founder of mStable. He added that only seed investor tokens, just under 3.1 million, were unlocked in the past 24 hours, while team tokens have always been set to unlock three months after the token generation event (TGE).
Over the next 24 hours, the unlocked investor tokens will be voluntarily re-locked for three months. Simson’s own vesting will start 6 months, instead of 3 months after TGE.
Simson wrote that the team “has not profited from or participated in the sale of any of MTA tokens in the last 24 hrs.”
I mean I’m not going to hypothesise about what could of happened as I believe that would be fruitless.
All the team can do is do better in the future which I’m fully confident they will endeavour to do. Mistakes happen.
— Anthony Sassano | sassal.eth 👨🌾 (@sassal0x) July 22, 2020
N.B. Anthony Sassano is an advisor at mStable.
Victim? MTA is trading at $3.30 now, and even during the sell-off it never went bellow $2.20, which is still higher than the auction closing price of $1.80 on MESA. This whole drama has been blown completely out of proportion.
— DefiMoon (@DefiMoon) July 22, 2020
So as far as I can see we just had:
– A couple of 🐳 DEX traders dumping on Balancer 📉
– Unanticipated investors vesting triggering a panic-sell off as token holders think investors are dumping
– Top tier DeFi Discord FUDhttps://t.co/tzLlBfm9eI
— Angelo Min (@angelomint) July 21, 2020
Learn more: What Can Crypto Crisis Managers Learn From BlockFi’s Silence & tBTC’s Openness?
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