Pull the nostalgia finance rug? 43% price reduction increases eyebrows
Aren Financial's YFI token has dropped more than 40% in the last 24 hours, resulting in a massive cash flow of nearly $5 million. The sudden price drop has led to speculation that something fishy is going on with the protocol.
According to data from BeInCrypto, the price of Air Finance dropped significantly from $14,519 to $8,915 in a few hours. However, YFI has recovered more than $9,000 as of press time.
YFI market cap free fountain
The sudden exit caused the airline's financial market value to drop by $200 million from $482 million to $296 million.
Meanwhile, according to CoinGlass data, crypto traders who held positions in YFI withdrew nearly $5 million during this period, including $3.5 million from long positions and $1.42 million from short positions.
In addition, Diffie Token's trading volume increased by 26% to $2 billion and open interest increased to $162.54 million as a result. Notably, major exchanges, including Binance, saw significant declines in YFI token open interest positions alongside the outflows.
Read more: Identifying and Exploring Risk in DeFi Lending Protocols
The sale reduced the total value of the properties locked in the project by $6 million to $329.5 million, according to data from Defilama.
Why Are Aren's Finances Collapsed?
As nearly half of the IFI supply is in 10 wallets, insiders in the project have created the selling pressure, observers say.
Crypto trader Skew has described YFI's price action as a “highly anticipated rug.”
“Prior to the carpet, a clear space was traded for value and short-term exposure. Most of the short OIA was closed here which caused the sale to fall ~$8500.
Read more: How to evaluate cryptocurrencies with chain and fundamental analysis
In addition, chain analyst LookOnchain reported a large whale transfer as the wallet, “0x48f9”, moved 446 YFI to about $5.8 million, most of which was deposited into exchanges. Despite this withdrawal, LookOnchain stated that before the disaster, a whale would profit from its transactions.
This issue is coming up in the domain registrar issues of the project in September. At the time, users of the DeFi protocol could not access the protocol through the Yearn.fi URL. However, the issue was later resolved.
Aren Finance is one of the largest DeFi protocols in the ecosystem. At its peak in 2021, the protocol had a TVL of more than $7 billion.
Disclaimer
Adhering to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This newsletter aims to provide accurate and up-to-date information. However, readers are advised to independently verify facts and consult with experts before making any decisions based on this content.
