After rising about 170% early in the month, Yearn.Finance’s governance token, YFI, fell more than 43% in five hours on Nov. 18, raising concerns about a potential exit fraud.
According to data from CoinMarketCap, during the sharp decline in value, the market capitalization from November’s gains was erased by almost $300 million.As of this writing, the value of the YFI coin is $9,069, down from $14,185 the previous day.The token has increased by 83% during the last 30 days, nevertheless.Within the cryptocurrency community, another weekend of fear, uncertainty, and doubt (FUD) has been brought on by the sell-off.Some users on X (previously Twitter) assert that ten wallets under developer control had half of the token supply.Etherscan data, however, raises the possibility that some of these holders are cryptocurrency exchange wallets.
Furthermore, a few users of X mentioned that the move might have been sparked by initiating short bets.A spike in YFI open interest, as reported by Coinglass, suggests that traders are shorting the coin following November’s gains.
“I bought the dip… someone sold 1000 coins perhaps that’s why it dropped massively. Will see,” commented a trader on X. According to another user, YFI’s price movement after the decline is unusual for exit scams.
“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.”
An automated trading system for DeFi markets is offered by the decentralized finance (DeFi) protocol Yearn.Finance.The protocol was introduced in July 2020 by Ethereum engineer and businessman Andre Cronje.Cointelegraph contacted Year.Finance and Cronje, but did not hear back right away.