On the 20th of January, the crypto market was stunned when Trove Market launched its native token, TROVE.
Prior to the launch, Trove Market had faced community backlash after the team announced it would abandon the Hyperliquid LI blockchain.
This was a massive breach of its social contracts with investors after raising $11.5 million in an ICO presale, setting the ground for a rough launch.
Trove market accused of rug pull
The TROVE token launched on Trove’s Perp DEX, with a fully diluted valuation of $20 million. Shortly after launch, the token’s FVD plummeted 97.5% to $500k, then rose slightly to $722.8k at press time.
At the same time, its market cap dropped from $612k to $512k, a loss of nearly $100k, indicating capital outflows.
Source: CoinGecko
Soon after the TROVE token went live, it dumped 28% in minutes from $0.0006 to $0.00043 before attempting a recovery.
Since then, the altcoin price rose to $0.00078 before slightly retracing to $0.00072, marking an 18% rise on the daily timeframe.
Reasons why TROVE was doomed to fail
In preparation for the token launch, developers ran an ICO on Hyperliquid. The team managed to surpass its $2.5 million target and raised over $11.5 million.
After raising these funds, the team announced it will keep $9.3 million to build its Solana-based Perp DEX. The move was perceived as the first red flag, and the team faced fierce community backlash.
Even worse, the community accused Trove Market of paying KOLs for promotion, with funds flowing to entertainment addresses.
According to Hyperliquid Daily, waleswoosh alone pocketed $8K for pumping and promoting the token. ZachXBT dug up receipts showing ICO money funneled straight to casinos and Polymarket bets.
Source: Hyperscan
The last nail in the coffin was driven by the alleged liquidity provider. Days ago, a key liquidity partner lost confidence in the project and liquidated 500k HYPE worth approximately $12.9 million.
The decision to sell these Hype tokens effectively pulled the rug from under Trove’s operational requirements, forcing the team to seek support elsewhere.
With these factors combined, the TROVE token sat as a ticking time bomb, and the launch validated the community’s fears.
Will TROVE see more losses?
TROVE plummeted as negative sentiment had taken hold even before the token launch. As such, earlier buyers rushed to dump, fearing making more losses.
Despite that, most of the presale buyers recorded massive losses. For instance, an earlier buyer argued that his $20k investment should have resulted in $14k in USDC and $6k in TROVE.
Source: Fantardio on X
However, the buyers received $600, blaming the token’s GIGA nuking. With market sentiment even more bearish, TROVE is at risk of further losses.
If current sentiment persists, the token will plummet to $0.0004. However, if the team can manage to restore community confidence, $0.001 is within reach.
Final Thoughts
- Trove Market is accused of a rug pull, following a contentious launch of the TROVE token on Solana Perp DEX.
- TROVE FVD dropped 97.5% from $20 million to $500k, warning of liquidity exit.
Source: https://ambcrypto.com/trove-tokens-97-wipeout-from-11-5-mln-presale-to-rug-pull-accusations/
