Sudden 43% Plunge of Yearn.Finance’s YFI Token Sparks Concerns of Potential Fraud
Summary:
Yearn.Finance's governance token, YFI, saw a 43% drop in value within a five-hour span on Nov. 18, following an almost 170% rise earlier in the month. The sudden plunge, which resulted in over $300 million being wiped off the market capitalization, has raised concerns of a potential exit scam. However, some believe the dramatic price shift may be due to traders shorting the coin. Despite the drop, the token's value is still up by 83% over the past 30 days.
Yearn.Finance's governance token, YFI, experienced a nosedive of over 43% in a mere five-hour span on Nov. 18. This follows a nearly 170% rise earlier this month, causing concerns about a potential fraudulent exit. The sharp drop in price led to an evaporation of over $300 million in market capitalization accrued from November's triumphs, as tracked by CoinMarketCap. As of this report, YFI is valued at $9,069, a significant fall from its $14,185 position a day earlier. Despite this, the token has still enjoyed an 83% increase in the last 30 days. This sell-off event has yet again sparked unease, apprehension and skepticism within the digital currency community. On the platform X (previously known as Twitter), certain users assert that a sizable 50% of the YFI supply was concentrated in just 10 wallets, supposedly under the control of the developers. However, analysis based on Etherscan data indicates some of these wallet holders may represent cryptocurrency exchanges. In a related point, users on X have indicated that the initiation of short sale positions might have catalyzed the dramatic price shift. Data from Coinglass illustrates an upswing in YFI interest, implying that traders are shorting the coin post November's gains. One X user remarked "I bought the dip… someone sold 1000 coins perhaps that’s why it dropped massively. Will see". Contrarily, another suggested that the behavior of YFI price post-decline does not align with typical fraudulent exit patterns: "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, a decentralized finance protocol founded by Ethereum developer and entrepeneur Andre Cronje in July 2020, offers automatic trading solutions for DeFi markets. A request for comment to Cronje and Year.Finance has been issued by Cointelegraph, but as yet remains unanswered. Magazine: Beyond Crypto — proving the potential of zero-knowledge proofs in fields from finance to voting.
Published At
11/18/2023 4:11:28 PM
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