The launch of the TROVE token has turned into a nightmare for early investors. Just four hours after trading began on January 20, the TROVE price witnessed a catastrophic collapse, dropping from a Fully Diluted Valuation (FDV) of $20 million to approximately $950,000.
This massive sell-off follows a controversial announcement by the project team regarding the retention of ICO funds and a sudden pivot in their development roadmap. Here is the latest TROVE news and why the community is labeling this launch a “soft rug.”
Why Did the TROVE Price Crash?
The primary driver behind the crashing TROVE price is a severe breach of trust between the project developers and the community.
After successfully raising $11.5 million in its Initial Coin Offering (ICO) last week, the TROVE team announced today that they would retain $9,397,403 of these funds. Instead of refunding investors or using the liquidity as expected, the team stated the capital would be used to “continue building a Perp DEX on Solana.”
This decision shocked holders, as the TROVE token was initially marketed with a different premise. The market reacted instantly, erasing over 95% of the token’s value within hours of the listing.
TROVE Token Controversy: From Hyperliquid to Solana
The controversy surrounding the TROVE token centers on a sudden and drastic change in the project’s direction.
Originally, TROVE was positioned within the Hyperliquid ecosystem. However, the team abruptly announced they were abandoning the Hyperliquid roadmap to rebuild their Perpetual DEX entirely on the Solana blockchain.
According to the official explanation, this pivot was triggered because their Liquidity Providers (LPs) decided to close a position of 500,000 HYPE tokens due to “recent negative sentiment.” The team claims this action altered the project’s constraints, forcing the move to Solana. However, investors argue that raising money under one premise and switching to another after the ICO closes is a major red flag for any TROVE coin holder.
TROVE News: Accusations of Fraud and “Soft Rug”
The TROVE news cycle is currently dominated by allegations of mismanagement and fraud. Several community investigators have pointed out suspicious activities regarding the project’s treasury.
- KOL Payments: There are reports that ICO funds were used to pay Key Opinion Leaders (KOLs) for promotion rather than development.
- Suspicious Transfers: On-chain sleuths allege that some funds flowed into deposit addresses associated with entertainment or gambling platforms.
- Mike Dudas Speaks Out: The backlash has reached industry leaders. Mike Dudas, founder of The Block, publicly condemned the project, stating: “Trove kept $9.4M of the ICO funds raised from the public under false pretenses. Any service provider, advisor, influencer, or other party taking money from this scam should be outed and shamed.”
Furthermore, the TROVE operations team has been accused of selling off HYPE tokens at the same time as the announcement, leading to accusations that they are profiting from both sides of the trade.
Conclusion: Is TROVE Safe?
Given the current TROVE price action and the severe allegations against the team, the TROVE token carries extreme risk.
While some high-risk traders may look at the sub-$1M FDV as a potential entry point for a “dead cat bounce,” the fundamental integrity of the project is in question. With $9.4 million held by a team that has already broken its roadmap promises, investors should exercise extreme caution when dealing with TROVE.
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