Yearn.Finance Token Drops 43%, Community Speculates About Exit Scam
The Yeren.Finance management token (YFI) plunged more than 43% in five hours on November 18 after rallying as much as 170% earlier in the month, sparking fears of an exit scam.
During the dramatic price drop, more than $300 million in market capitalization was lost from November's gains, according to CoinMarketCap data. At the time of writing, the YFI token is trading at $9,069, up from $14,185 a day ago. However, the token is still up 83% in the last 30 days.
The selloff sparked another weekend of fear, uncertainty and doubt (FUD) in the crypto community. At X (formerly Twitter), some users claim that 50% of the token supply is held in 10 developer-controlled wallets. However, Etherscan data suggests that some of these owners may be crypto exchange wallets.
In addition, some X users pointed out that opening short positions may have triggered the movement. Data from Coinglass shows a jump in YFI open interest, indicating traders are shorting the coin after November's gains.
“I bought a dip…someone sold 1000 coins, maybe that's why it went down in bulk. You'll see,” commented a trader on X. As another user pointed out, it's not uncommon for scams to exit after YFI's price drops.
“It doesn't look like Ragpool at all. If it sells for a lot, the price is still stable at 9k, which is over 80% below.”
Yearn.Finance is a decentralized finance (DeFi) protocol that provides automated trading solutions for DeFi markets. Andre Cronje, Ethereum developer and entrepreneur launched the protocol in July 2020.
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