Summary of Key Events
- •Trove raised funds for a Hyperliquid-based perpetual decentralized exchange (DEX).
- •The team abruptly pivoted the DEX to Solana just before the token generation event (TGE).
- •Most of the Initial Coin Offering (ICO) funds were retained for Solana development, with only partial refunds offered.
- •On-chain data and perceived missteps during the sale fueled accusations of a rug pull and calls for legal action.
TROVE Token Plunges 95% Following Launch
The TROVE token experienced a dramatic decline of approximately 95% within minutes of its trading launch. This sharp fall occurred in the wake of the platform's announced pivot, which was revealed shortly before the scheduled token generation event.
The company had initially raised funds through a public token sale with the explicit intention of building a perpetual decentralized exchange utilizing Hyperliquid's infrastructure. However, just days before the planned token generation event, the team announced a strategic shift to the Solana blockchain. This decision raised significant concerns among contributors regarding the allocation and use of the funds that had been raised.
Trove has confirmed its intention to retain a substantial portion of the proceeds from the token sale. These funds are earmarked for continued development on the Solana platform. The company characterized this decision as essential for maintaining the viability of the product.
A builder associated with Trove, identified as Unwise, cited the withdrawal of a key liquidity partner as the primary reason for the pivot. This partner had previously offered significant support for the Hyperliquid integration. According to public statements, the absence of this support rendered continuing development on Hyperliquid no longer feasible, prompting the decision to rebuild the perpetual exchange on Solana.
Community Reaction and Fund Allocation
In public statements disseminated via social media, Trove acknowledged that its management of the initial coin offering and subsequent decisions had generated confusion and diminished trust among participants. The company indicated that refunds had been issued to some participants and that additional automatic refunds were planned. According to the company, the remaining funds have been allocated or expended on various operational necessities, including developer salaries, frontend and backend infrastructure, the chief technology officer's compensation, advisory services, marketing initiatives, and general operating costs.
Some participants have voiced strong objections to the repurposing of funds that were specifically raised for Hyperliquid development. Critics have demanded full refunds and have raised the prospect of pursuing legal action.
On-chain analysis conducted by blockchain analysts suggested that a single entity appeared to exert control over a significant portion of the TROVE supply. This control was distributed across multiple wallets, all of which were reportedly funded through the same exchange within concentrated timeframes. While the analysis did not provide direct evidence linking these wallets to the Trove team, the observed pattern was deemed worthy of scrutiny concerning presale activities.
Controversy Surrounding the Initial Coin Offering
This controversy follows a series of complications that arose during the initial coin offering in January. Trove initially announced that the sale had surpassed its fundraising target and committed to providing pro-rata refunds to participants. Subsequently, the company announced a five-day extension for the sale. However, this decision was reversed just hours later, with the company citing an error as the reason for the reversal.