Thursday, February 1st, 2024 – Meme coin Sponge has announced the discontinuation of Sponge V1 as it accelerates its migration to the SPONGE V2 Polygon version of the digital asset.
The pivot to a solid architecture for gaming, which the fast-growing and scalable Polygon network offers, provides the last piece in the puzzle, following the news released in January of the project’s migration plans.
Sponge’s team has decided to bring forward its plans in response to a recent malicious attack on its liquidity pool. All $SPONGE V1 holders are being moved to the more secure, efficient (faster) and cheaper to transact $SPONGE V2 on the Polygon network.
This strategic shift not only aims to limit the attack’s impact but will also expedite the launch of a fully decentralized Play-to-Earn game with significantly lower transaction fees.
Currently, MATIC transactions typically cost between 0.1 and 0.5 MATIC ($0.077-$0.38), while Ethereum transactions are around $2.5 to $20. Sponge gamers will be able to look forward to huge potential on-chain savings.
When will the transition to SPONGE V2 start and end?
The transition to SPONGE V2 will take place on Monday February 5th at 11:00pm UTC, marking a significant milestone in the platform’s journey towards a more secure and efficient blockchain environment.
Effective immediately, $SPONGE V1 will be phased out, rendering it worthless post-February 5th. This decision comes as a direct response to the attack to protect the Sponge community’s interests and assets the uppermost priority.
The need to move at pace was also necessitated by the original contract design in which the liquidity was set to unlock on February 6th.
Strategic advantages of the accelerated transition to SPONGE V2 on the Polygon Network
Sponge is expediting the move of SPONGE V1 holders to SPONGE V2, hosted on the Polygon network.
The need for a swift and seamless transition has the fortuitous consequence of speeding up the strategic migration.
The Sponge upgrade process thus should be seen not purely as a response to the attack, but also as a forward-looking move to leverage Polygon’s lower transaction fees for Sponge’s Play-to-Earn game.
Polygon is what is known as a Layer 2 network because it sits on top of an existing blockchain – in this case – in order to provide enhancements, usually associated with scalability, as measured in transactions per second (tps).
For instance, Polygon can scale to a tps of as much as 7,000 tps while Ethereum languishes on 1–25 tps. Polygon can theoretically achieve 65,000 tps, although real-world bottlenecks may prevent this, depending on the server architecture and other factors.
Sponge took immediate action to mitigate harm
In response to the recent security breach, Sponge reacted quickly to effectively create a cordon sanitaire to insulate token holders from negative impacts and to limit any potential damage to its network.
Although the team, for security reasons, has not revealed any details about the exploit or vector of attack, robust counter-measures and rigorous static analysis testing to identify and close any other potential vulnerabilities have been implemented on an ongoing basis.
Still, the price of the token suffered as a result of the negative news. However, the SPONGE price has returned to the support levels it was comfortably sitting at in December, creating a new near-term bottom for the price.
At one level this does not matter because the V1 coin is being retired, but its termination price is an important point of price discovery for the new SPONGE V2, which is currently being staked in large numbers.
What token holders need to do now – stake SPONGE V1 today for a seamless transition
Sponge is working closely with its exchange partners to suspend all trading of SPONGE V1 on the 5th of February at 11:00 PM UTC.
Holders of SPONGE V1 on centralized exchanges are urged to withdraw and stake their tokens through the Sponge website before the cutoff to earn APY and claim SPONGE V2.
For those holding SPONGE V1 in non-custodial wallets, staking through the Sponge website is also recommended.
For decentralized holders, staking before February 5th ensures the receipt of staking APY as usual. Non-custodial holders who do not stake by this deadline will be transferred to a 0% APY staking contract from a snapshot taken at 11:00pm UTC on February 5th.
For the Sponge community members who have already staked their SPONGE V1 tokens, there will be a seamless transition. These staked tokens will automatically be transferred to the new Polygon staking contract.
To date, $3.36 million worth of SPONGE V1 has been staked and is currently earning an APY of 244%.
SPONGE V1 launched at a price of $0.000025 and is at the time of writing priced at $0.000509 – that amounts to a ROI of 2,034%.
The possibility of SPONGE V2 exploding in price to surpass the previous SPONGE V1 all-time high of $0.0012 on January 8th are extremely high, given the network transition to Polygon.
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