8 min read

Metal Blockchain: Deal or Steal?

We hope from this post we have made clear our public stance on the conversion to METAL and the risks involved. In our opinion it may very well be that what we are witnessing is a rugpull in slow motion. It is nonetheless highly...

MTL: the 1st token. It was recently discovered that Metallicus' CEO Marshall Hayner has now minted a 6th token for a new blockchain called Metal Chain. But Hayner's first token MTL, was minted back in 2017 on the Ethereum blockchain and has a maximum supply of 65.6 Million tokens. That same year MTL was sold to investors, family and friends to fund the development and launch of their crypto/payments exchange platform Metal Pay.

According to historical trading data, the first time MTL was offered for sale on an exchange was July 9th 2017 where MTL opened at $1.22 and closed the day at $1.67. Just two months later on Sept 7th MTL had already peaked closing at ATL  (all time high) of $13.53. MTL never reclaimed it's former glory. The scuttlebut among some community members involved since those early days, is MTL's swift and precipitious falling of price was due to selling pressure by early Metallicus VC investors cashing out.

After the Metal Pay launch, MTL was used as a rewards token with a portion of MTL going back to the sender for every cash transaction. Metallicus called this rewards program PoPP (proof of processed payment). For several years Metallicus widely marketed PoPP using public statements and marketing materials which had the effect of giving assurances (implied or otherwise) to customers that Metallicus had put aside a pool of 26,341,112 MTL [see figure 1.] for this purpose alone.

Figure 1.

Unfortunately, contrary to earlier assertions made, and to keep Metal Pay solvent and to pay employees, this pool was dipped into, and that MTL was sold until there was no longer a pool. Note: in a 2021, blog post  on the Metal Pay website, this PoPP "experiment" and "fun" as it was now considered was finally "sunsetted."

Marco, an early investor of MTL exposes how Metallicus "emptied out PoPP pool"

XPR: the 2nd token. Sometime around 2019 after an 18 month bear market, the market was finally recovering and gas fees on Ethereum were again at their peak. The price of MTL already cratered and with it dwindling demand for the token, the need still existed to pay Metallicus employees and to keep Metal Pay solvent. Hence, Marshall likely needed another cash source. It was around that time that Proton chain was born. Hayner cloned the newly released open source EOSIO blockchain framework and began making changes to suit his idea for a new payments platform.

Somewhere along the way in that same year, Marshall realized he needed the help of Fred Krueger. Fred was the founder of the (also EOSIO based) Lynx blockchain and creator of the highly successful EOS Lynx wallet. Hayner met with Fred and the two of them agreed to combine forces to create what became known as the Proton blockchain. Like MTL, XPR was first minted as an erc20 token on the Ethereum blockchain. This choice was due in large part to the need to raise funds to bootstrap development while the new wallet was being developed and Proton chain was pieced together.

As part of their agreement Fred was given the titles of Co-Founder of Proton and Chairman of Proton Chain LLC and Metallicus absorbed the Lynx chain IP and Fred's team. After the launch of Proton's mainnet, Fred, and his team together with the comminuty received the airdropped XPR token. LYNX holders received five separate drops at a 1:1 ratio and MTL holders received a sinlge drop at 1:1 distribution ratio. It was from the codebase of Lynx, that Proton inherited the simple @name structure like "@fred" for accounts, and other tech for the Proton wallet.

Fred was also responsible for creating the infamous longstaking architecture. Long staking on Proton used an algorithm that compared the price of Bitcoin vs XPR over a period of 90-360 days. Inevitibaly longstaking was gamed. It was easy. With XPR's low market cap and lower trading volume it proved too simple to manipulate. Larger account holders could easily move the price/rewards structure in their favor by selling and up to 10x return (in the form of XPR) at the end of whatever chosen staking period. The failure to create or else spend the necessary funds for a succesful marketing campaign contributed to an already stagnant price. This lack of momentum for XPR was often publicly blamed on longstaking and especially Fred, it's creator. In a plot twist of irony, and not well known, it was Fred who opposed the Metallicus owned XPR treasury (the largest holder of XPR) from longstaking. Metallicus and Marshall profited the most from longstaking and Fred was repeatedly and publicly used by Marshall as a scapegoat for the many ills of the chain, but especially the stagnant price of the XPR token.

Here is how the pattern seemingly unfolded: Each month near the time for Metallicus to make payroll, Marshall (or else his agents) would transfer large sums of XPR from the XPR treasury (@xprtreasury), to the on chain Metal payroll account (@metalpayroll) and finally to account to make the payroll for Metallicus employees, and Metal Pay. This selling pressure would inevitably cause the price to fall. Customers and communuty members would be diappointed, upset XPR wasn't performing and in order to molify them and keep morale up, Marshall would appear on various social media platforms blaming Fredblamed  Fred was then demonised by Marshall who also encouraged others to publicly pile on. Rinse and repeat.  

XMT the 3rd XMT is MTL wrapped on the Proton chain. The original vision of XMT was to be a governance token used to decide interest rates for lending and borrowing on the Proton chain. It was to be part of a larger DeFI vision. On a reddit AMA last year Marshall had the following to say about XMT:

MTL, initially distributed through PoPP is evolving to encompass Metal Dollar (XMD), a decentralized stablecoin on the Proton blockchain. XMT (MTL on Proton) is the governance token which is used to determine: stablecoins allowed access to the pool, stablecoin allocation in the pool, entry/exit fee cost in XMT, and future features of Metal Dollar (XMD). XMD is equivalent 1:1 to any stablecoin in the basket can be moved fluidly between other stablecoin (ie USDT to USDC) this is similar to Curve Finance in some ways, but it is multichain through the xToken bridge and provides interest to a basket stablecoin XMD.

For having such a supposedly important role, XMT is curiously absent from the Metal blockchain lite-paper.

LOAN, the fourth token and as it's name implies functions as a token that collateralizes loans on the ProtonLend platform. XPR holders received the LOAN token is the the follwing distribution:

  • 333:1 XMT (known as MTL on Ethereum)
  • 666:1 XMT liquidity pool Proton Swap
  • 1:1 XPR unstaked
  • 2:1 XPR short staked
  • 2:1 XPR liquidity pool Proton Swap
  • 10:1 XPR long staked 90 day
  • 30:1 XPR long staked 365 day

There was a discussion in the community with more than a few investors voicing concern about the quantity of LOAN Metallicus and Marshall himself would personally receive. After the airdrop Marshall ended up the second largest holder of LOAN after Metallicus owned accounts. The same is still true today.  

Which brings us back to the XMD the fifth token. XMD can be minted by sending XMT to Metaldollar.com. While this platform was ony released within the last couple of weeks, it seems very much at odds with the present and future direction as we will soon discuss below.

Lastly there is the sixth token METAL; the governance and resource token of the Metal blockcain. Marshall stated today mainnet is already live though there is no link to public access. There also isn't a Github repo to look at any code. Moreover and most importantly METAL is not yet for sale anywhere. The only way to get the METAL token is to send MTL/XMT to @metalchain (an account address on the Proton chain). The distribution is 2:1. So for every 1 MTL token sent the sender receives 2 METAL tokens. Keep in mind METAL has zero value and with no promise or otherwise that it will ever be of any worth. METAL also has 10x supply of MTL/XMT further diluting the value of the MTL token.

This brings us to the steal. In my more than 6 years in the crypto space I have never even heard of such a rediculous offer: give me your token that is worth $1.38 (as of now) and i'll give you 2 of these worthless tokens! Even the craziest ICO's (and there were many) so prevalent in the earlier days were never so bold as to have conceived of such a plan as now designed by Marshall and company Metallicus. So many red flags. Let's concentrate on several here.

  1. Give me your MTL token of value for my worthless METAL token. This idea is so insane that it is hard to even take the offer seriously. Investors are in effect being asked to donate to the next project so Marshall and team can turn around and sell your token and reap the rewards of your investment. It's also likely illegal at least in the U.S. which brings us to red flag #2.
  2. The U.S. is blocked from any participation. This is a red flag for several reasons, the first of which it is totally out of left field from what we have come to expect from Marshall. For several years now, Marshall has been known for being very pro U.S. and supportive of the country's future regulatory framework. Proton with it's builtin KYC, DeID (decentralized ID) in anticiaption of mandatory KYC laws. It was designed with this purpose in mind. He even worked with legislators in an effort to help pass laws that were more crypto friendly. To now stray outside of the normal behaviour of his public persona is very troubling.  Essentially Marshall is running an ICO with a twist and one that his legal counsel considers likely illegal in the U.S.
  3. Six tokens later, no real marketing has ever been done to promote Proton or significant effort made to reach out to developers to grow Proton chain. The lack of partnerships and dearth of VC funding is not a track record of leadership success. Hence what has failed in the past will likely be repeated in the future.
  4. The selling of tokens in order to keep the commercial Metal Pay app solvent depirves investors of profit. For many years, Marshall's goto plan has been to sell XPR (the main token on Proton chain) to keep his commercial venture Metal Pay solvent. This fact has been a sticking point with alot of investors over the years; even prior to the advent of Proton chain, when MTL was sold for the same reason. Every time XPR sees some increase in value Marshall and by extension Metallicus sells to make payroll. This pattern of selling has sadly shortchanged the investors and will more than likely continue onto whatever future scheme.

We hope from this post we have made clear our public stance on the conversion to METAL and the risks involved. In our opinion it may very well be that what we are witnessing is a rugpull in slow motion. It is nonetheless highly suspicious and strange and totally against the ethos of crypto to proceed in the manner Marshall has. It also seems as though his plans are rushed and more recently hatched then he has lead others to believe. We think there should have been a measured rollout with plans shared with the communuty before the METAL token was minted and an airdrop to all MTL/XMT holders.

As Block Producers, we have always felt we had a duty first and foremost to the community, and voters of the chain. That is why we have always sought to bring the truth as we have found it, without spin; at whatever the personal or professional cost.  

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