Trove Markets is facing significant criticism from its community on X after announcing a decision to retain most of the investor funds raised for its development on Hyperliquid, redirecting them instead to build on the Solana blockchain.
The project had secured over $11.5 million in a token sale intended for its integration on Hyperliquid. However, just days before its scheduled token generation event, Trove announced on Friday that it would be pivoting its development to Solana.
One of Trove's developers, known as "Unwise," subsequently attributed the pivot to a liquidity partner withdrawing 500,000 Hyperliquid (HYPE) tokens, which were crucial for the Hyperliquid integration. This sudden change in direction has led to dozens of Trove investors demanding refunds.
In an announcement on Monday, Trove stated, "From the total raise, we will retain $9,397,403 to continue building a perp DEX on Solana." The team explained that this decision is "the only path that keeps Trove alive as a real product."
"We can’t reverse every cost already incurred, but we can keep building, and deliver the perp DEX for collectibles."
Trove further elaborated that a portion of these funds has been or will be allocated to a developer team for frontend and backend infrastructure, a chief technology officer, an advisory team, and for marketing and operating expenses.
The project also noted that over $2.44 million has already been refunded to investors as part of an effort to "clean up participation and protecting distribution integrity." An additional $100,000 will be refunded to participants in the initial coin offering.
One community member expressed their frustration on X, stating, "How can you build a perp dex went you can't even do an ICO competently. Biggest scam in crypto ATM."
TROVE Token Experiences Significant Drop After Token Generation Event
Investor sentiment further soured after the newly launched TROVE token plummeted by more than 95% to $0.0008 within ten minutes of its launch. This sharp decline reduced its market capitalization from $20 million to below $1 million, according to data from DEXScreener.
Data from the blockchain analytics platform Bubblemaps revealed that one entity received 12% of the token supply through 80 new wallets, which were funded from the non-custodial crypto exchange ChangeHero. However, Bubblemaps stated that it found no evidence linking these clusters to the Trove team.
Trove Assures Commitment to Long-Term Development
Despite the ongoing controversy, Trove has communicated to its community that it "are not going anywhere."
The team emphasized, "Trove is not disappearing. We are not “taking the money and running.” We are still building," adding that they intend to "earn trust back through execution."
Trove intends to concentrate its perps trading experience on collectibles, such as Pokémon cards and Counter-Strike 2 skins. This market segment was projected by crypto asset manager Bitwise in September to potentially grow into a $21.4 billion industry.
Cointelegraph reached out to Trove for comment but had not received an immediate response at the time of reporting.