The governance token YFI from Yearn.Finance saw a dramatic fall in its value by over 43% in just five hours on November 18, stirring widespread concerns about a possible exit scam. The sharp decrease occurred after the token enjoyed a near surge of 170% earlier in the month.
CoinMarketCap data revealed that during this significant drop, over $300 million in market capitalization was lost from November's gains. Although the value of the YFI token plummeted from $14,185 to $9,069 a day after the event, it still exhibited an 83% increase over the past 30 days.
This abrupt sell-off has resulting in unease, doubt, and speculation within the crypto community. Some users on platform X (previously Twitter) suggested that 50% of the token supply was held by ten wallets, implying that they were under the control of developers. However, information from Etherscan indicates that some of these holders are likely crypto exchange wallets.
Further speculation proposed that the establishment of short positions might have triggered this drastic price movement. Data from Coinglass indicated an increase in YFI open interest, suggesting that traders might be shorting the coin following the gains in November.
Andre Cronje, an Ethereum developer and entrepreneur, founded the decentralized finance (DeFi) protocol Yearn.Finance in July 2020. It provides automated trading solutions for DeFi markets. Cointelegraph approached Cronje and Yearn.Finance for comments but has yet to receive a response.
