Yearn.finance’s (YFI) governance token plummeted over 43% in just five hours on Nov. 18 after rallying almost 170% early in the month, stirring fears about a possible exit scam.
During the dramatic drop in value, over $300 million was wiped out in market capitalization from November’s gains, according to data from CoinMarketCap. At the time of writing, the YFI token is trading at $9,069 from $14,185 a day before. However, the token is still up 83% over the past 30 days.
The sell-off has triggered another weekend of fear, uncertainty and doubt, or FUD, within the crypto community. On X (formerly Twitter), some users claim that 50% of the token supply was held in 10 wallets controlled by developers. However, Etherscan data suggests that some holders may be crypto exchange wallets.
In addition, some X users pointed out that opening short positions may have triggered the move. Data from Coinglass shows a jump in YFI open interest, indicating that traders are shorting the coin after November’s gains.
“I bought the dip… someone sold 1000 coins perhaps that’s why it dropped massively. Will see,” commented a trader on X. According to another user, YFI’s price movement after the decline is unusual for exit scams:
“Doesn’t look like rugpull at all. Cuz inspite if so much sell off price is still stable at 9k which is 80% above its bottom.”
Yearn.finance is a decentralized finance protocol that provides automated trading solutions for DeFi markets. Andre Cronje, an Ethereum developer and entrepreneur, launched the protocol in July 2020. Cointelegraph reached out to Cronje and Year.finance but did not receive an immediate response.
Magazine: Beyond crypto — Zero-knowledge proofs show potential from voting to finance
Be the first to comment