TROVE Token Faces 97% Plunge: From $11.5 Million Presale to Rug-Pull Accusations

On January 20th, the cryptocurrency community was taken aback when Trove Market launched its native token, TROVE. Leading up to this event, the team faced backlash from users after deciding to abandon the Hyperliquid LI blockchain. This decision was seen as a significant violation of the social contract with investors, particularly as the company had raised $11.5 million during its ICO presale, laying the stage for a tumultuous start.

Key Takeaways

TROVE token's launch led to a dramatic 97% drop in value, raising allegations of a rug pull.
The initial ICO raised $11.5 million, but community backlash began after the team's decision to abandon its blockchain plans.
Accusations emerged regarding misallocation of funds and promotion tactics, straining investor trust.
A critical liquidity partner's actions raised additional concerns, impacting the token's integrity and stability.
Future price movements of TROVE are uncertain, heavily influenced by market sentiment and community trust.

TROVE token's 97% wipeout: From $11.5 mln presale to rug-pull accusations

Allegations Against Trove Market

The TROVE token made its debut on Trove's Perp DEX, boasting a fully diluted valuation of $20 million. However, shortly after the launch, the token's Fully Valued Dilution (FVD) crashed by 97.5%, falling to $500,000, before experiencing a slight recovery to $722,800 at the time of writing. Meanwhile, its market cap decreased from $612,000 to $512,000, resulting in an outflow of nearly $100,000.

Trove price charts Source: CoinGecko

Following the launch, the token swiftly dropped 28% from $0.0006 to $0.00043, despite a brief rebound to $0.00078, ultimately settling at $0.00072—an 18% increase from the previous day.

Factors Leading to TROVE's Downfall

Before the TROVE launch, developers organized an ICO on Hyperliquid. The team exceeded its $2.5 million fundraising goal, securing over $11.5 million. After this success, they announced plans to retain $9.3 million to develop their Solana-based Perp DEX, which many perceived as a significant red flag that drew intense criticism from the community.

Compounding the issue, allegations arose that Trove Market was compensating Key Opinion Leaders (KOLs) for promotion, with funds allegedly directed towards entertainment accounts. Investigations by Hyperliquid Daily revealed that one influencer received $8,000 solely for promoting the token, while ZachXBT provided documentation showing that ICO proceeds were redirected to casinos and Polymarket bets.

Trove liquidity partner Source: Hyperscan

The final blow came from a vital liquidity partner which recently lost faith in the project, liquidating 500,000 HYPE tokens valued at roughly $12.9 million. This liquidation undermined Trove’s operational stability, compelling the team to search for alternatives.

These accumulating issues left TROVE as a volatile asset, and the launch only reinforced the community’s concerns.

What's Next for TROVE?

Negative sentiment lingered even before the token's launch, prompting many initial investors to sell off quickly to prevent additional losses. Most presale investors found themselves facing drastic declines. For example, one investor claimed their $20,000 stake should have generated $14,000 in USDC and $6,000 in TROVE.

Trove market price Source: Fantardio on X

Unfortunately, this investor received merely $600, attributing the loss to the token's drastic drop. With market sentiment remaining pessimistic, TROVE is vulnerable to further declines.

If the current outlook persists, the token could fall to $0.0004. However, should the team succeed in regaining community trust, a return to $0.001 might be possible.