Trove's Controversial ICO: $9.4M Funds Held as Token Plummets 95% After Shift to Solana

Trove Markets is facing significant backlash after deciding to keep approximately $9.4 million from a token sale originally linked to its collaboration with Hyperliquid. This decision came amid a last-minute shift to launch its decentralized exchange (DEX) on Solana, resulting in a drastic 95% drop in the price of its TROVE token shortly after trading commenced.

Key Takeaways

Trove Keeps $9.4M: Trove Markets will retain nearly $9.4 million from its ICO, despite a last-minute pivot from Hyperliquid to Solana.
Token Collapse: The TROVE token dropped over 95%, falling from an expected market cap of $20 million to below $2 million shortly after launch.
Mixed Reactions: Many investors are frustrated by the change in direction and are questioning the project’s transparency and integrity in handling funds.
Future Allocations: Trove has stated that the funds will support ongoing development efforts, including salaries and infrastructure.

Trove's Pivot to Solana and Market Impact

Trove Markets has recently come under fire for its decision to retain about $9.4 million from a token sale that was initially intended to fund a decentralized exchange (DEX) in conjunction with Hyperliquid. This pivot coincided with the launch of its TROVE token and occurred just days before the scheduled token generation event, significantly impacting investor sentiment.

Shortly after trading commenced, TROVE experienced a catastrophic drop of over 95%. The token began with an anticipated market capitalization of around $20 million but plummeted to approximately $0.0008 within ten minutes of trading, bringing its market cap down to under $2 million, according to DEXScreener data.

Currently, TROVE is valued at approximately $0.000703, with a market cap of roughly $703,000. The substantial price decline has sparked frustration among contributors and investors, who believe that the project changed its plans too late in the fundraising cycle.

Reasons Behind the Shift from Hyperliquid to Solana

Initially, Trove had successfully raised over $11.5 million through a public token sale aimed at developing a perpetual DEX using Hyperliquid’s infrastructure. However, just days before the token launch, the Trove team announced they would transition to Solana instead.

This switch raised urgent questions about the funds raised for the Hyperliquid project and whether those should be returned to investors. Nonetheless, Trove stated it would retain $9,397,403 to facilitate the development on Solana, calling this approach the only feasible option to keep the project viable.

A key player in Trove, known as Unwise, attributed the sudden change to the withdrawal of a crucial liquidity partner. This partner had previously supported the Hyperliquid initiative with a significant stake of around 500,000 HYPE tokens. With their exit, the Trove team decided to forgo the original Hyperliquid framework and start anew on Solana.

Trove has admitted that its management of the ICO and subsequent decisions have resulted in confusion and frustration in the community, potentially damaging trust in the project. They reported having refunded approximately $2.44 million to certain participants as part of an effort to ensure proper distribution, with an additional $100,000 set to be automatically refunded to ICO investors.

The remaining funds, according to Trove, have been allocated for various development expenses, which include paying developers, technical infrastructure, and marketing efforts.

Community Response and Ongoing Concerns

Despite the explanations provided by Trove, dissatisfaction persists among community members regarding how the fundraising was conducted. Some users on X have accused the project of failing to meet established fundraising goals, arguing that funds intended for the Hyperliquid project should not be redirected following such a last-minute change.

There have even been calls for refunds and threats of legal action, as some investors worry the situation could lead to lawsuits. Meanwhile, additional analysis from Bubblemap has revealed that a single entity controls about 12% of the TROVE supply, distributed across various wallets generated through the same exchange within tight timeframes. While there is no direct evidence linking these wallets to the Trove team, many community members are raising red flags about potential presale misconduct.

This turmoil follows a tumultuous ICO process that Trove experienced earlier this January. The project initially reported raising over $11.5 million—far exceeding its initial target of $2.5 million—and had promised pro-rata refunds. However, they subsequently announced a brief extension of the sale, only to quickly retract that announcement, citing an error.