- YFI, the governance token of Yearn.Finance, plummeted over 43% in just 5 hours on November 18th, wiping out over $300 million in gains from earlier in November. This sparked speculation of a possible exit scam.
- The sell-off fueled fear and uncertainty on crypto Twitter, with some claiming 50% of the supply was held by developers. However, data suggests some major holders may be exchanges.
- Explanations for the drop remain unclear, though some pointed to short positions being opened after November’s rally. The token has stabilized around $9,000 but questions linger about Yearn’s operations.
The governance token of Yearn.Finance, YFI, plummeted over 43% in just five hours on Nov. 18, 2022. This dramatic drop came after the token had rallied almost 170% earlier in November, sparking fears about a possible exit scam.
The Sudden Sell-Off
During the steep decline, over $300 million was wiped out from the token’s November gains, according to data from CoinMarketCap. At the time of writing, YFI was trading at $9,069, down from $14,185 just a day before. However, YFI is still up 83% over the past 30 days.
The sell-off triggered another weekend of fear, uncertainty and doubt (FUD) within the crypto community. On Twitter, some users claimed that 50% of the token supply was held in 10 wallets controlled by developers. However, Etherscan data suggests some of these holders may be crypto exchange wallets.
Some Twitter users pointed out that opening short positions may have triggered the move. Data from Coinglass shows a jump in YFI open interest, indicating traders are shorting the coin after November’s gains.
According to one trader, “I bought the dip, someone sold 1000 coins, perhaps that’s why it dropped massively. Will see.” Another user commented that 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.”
Yearn.Finance is a decentralized finance (DeFi) protocol that provides automated trading solutions for DeFi markets. Andre Cronje, an Ethereum developer and entrepreneur, launched the protocol in July 2020.
The reasons behind the latest YFI sell-off remain unclear. The token’s price appears to have stabilized around $9,000, but the dramatic drop has fueled speculation around Yearn.Finance’s operations and tokenomics. The coming days will likely reveal more as the community continues analyzing the data.