Following a delay of two weeks, the $PAIN token has launched – something investors and cryptocurrency enthusiasts have eagerly awaited.
However, the launch has already sparked significant controversy, primarily because of recent disclosures about the token’s distribution and a “team sale” of tokens associated with the project’s architects. Indeed, the way in which the token has been released has led some to question the project’s integrity and the motivations of its leaders.
Token Economics and Distribution
Now making its debut, the PAIN token has a total supply of 10 million tokens. The distribution of these tokens has been clearly laid out in the official announcement, with some surprising details that are causing concern in the market.
– 50% of the tokens go to Harold, the project lead who is really the only person connected to the creation and development of $PAIN. To deal with concerns about centralization, Harold’s 50% has been locked for 20 years. Those tokens will not be used in any way that could directly or indirectly affect market prices until 20 years have gone by. That means he can’t sell them to anyone, use them to pay people, or make them part of anything that might be used to influence market prices. – 20% of the tokens are set aside for a pre-sale. – 15% of the total tokens are for liquidity. – 10% of the total tokens reward the community. That’s you if you get involved. – 5% is for partners.
Presented in a clear and understandable manner, the tokenomics seem to be directed toward the long-term growth of the project. However, it is the team behind the project that has us concerned—specifically, the addresses linked to the team that have been doing an inordinate amount of selling recently.
Concerns Over Team Token Sales
In the first 24 hours after the token’s launch, $PAIN has already seen substantial fluctuations, and the matter has been further confounded by the large selling of the token supply by team-affiliated addresses. According to blockchain data, these team-related addresses have sold $2.53 million worth of $PAIN tokens. This has investors quite apprehensive.
A sale took place through the address DjTrV…1a24a, which sold 107,212 PAIN tokens at an average price of $23.66 per token. This transaction might not raise any red flags by itself. Yet, when one considers the context, several suspicious elements come to light. First, the sale was funded by an address linked to the project’s pre-sale rather than any allocation that would normally be freely tradable (like an airdrop, for example). Second, we find no evidence that such a sale was planned or made part of any supposedly legitimate trading activity at the time. In short, if this sale was on the level, it seems to have involved funding that was never meant or permitted to be traded.
In addition, the tokens were sent three times to different places before they got to their final destination. This has led some observers to wonder if this was done to hide the path the money took or just to be secretive. Sending the tokens in such a convoluted way can give the appearance of wanting to be a bit shady and, in some cases, it can even be a sign of wanting to be clearly shady.
Potential Implications and Investor Reactions
The prompt and sizable sale of tokens right after the project’s initiation has called the credibility of $PAIN into question. Investors are not fond of big allocations of tokens to teams, and for good reason. When it looks like either the team is going to sell a bunch of tokens or that a bunch of tokens are going to be sold under the cover of team marketing, it’s not a good sign for a project. And it has to be said: the project that raised $118 million in May 2021 and had a Twitter account with 1,999 followers when its first Twitter tags came out in June 2021 is not a project that looks too good in retrospect.
This type of activity is frequently linked with “pump-and-dump” schemes, where project teams or insiders sell off their holdings after they have artificially inflated the price of the tokens. Regular investors are then left holding the tokens. The sale of over $2.5 million worth of $PAIN tokens in such a short time does, however, raise eyebrows and suggests that maybe this is what’s happening. Despite a 20-year lock on Harold’s own shares of the tokens, it’s hard to believe that insiders would sell off so much at one time unless they believed something bad was going to happen.
Consequently, the entire crypto community is watching very closely the project. The $PAIN project has suffered a serious setback with these apparent sales, regardless of who is doing the selling or why. Recovery from this setback is going to depend on the project’s transparency in the next few days and the apparent trustworthiness of its leadership. If the team is not forthcoming about what is happening or if it appears that the team itself is selling off the project, the reputation of the project and the trust of its investors are going to take a nosedive.
A Critical Moment for $PAIN
Even though $PAIN had a bumpy beginning, it still has time to earn back the market’s trust. The development team can do this by being more open about how they sell their tokens and what they do with the money. They can also boost their credibility by making a show of staying in it for the long haul. P.A.I.N., even with its suspect signs, could still walk back up into profitability. If it ever does, though, you can bet that it will be under scrutiny from near to far.
At the moment, the fate of $PAIN hangs in the balance. The market is watching to see if the project will deliver on its promised utilities or if it will fall victim to the same pitfalls that have caused so many other crypto projects to unravel in the past. Investors should be cautious; staying alert to the token’s movements and the actions of the project team is good due diligence.
Disclosure: This is not trading or investment advice. Always do your research before buying any Metaverse crypto coins.