In the past three days, the DeFi darling YFI has lost more than 36% of its value, going from $34,400 to $21,950 today.
At the time of writing, the 28th largest cryptocurrency with a market cap of $719 million, has been trading over $23,900, slightly in the red.
The governance token of Yearn.Finance has been plunging recently, which in part, is because of over 55% uptrend it experienced before that. Just this month, the token also hit a new all-time high of $43,678, and after such a peak, a correction is to be expected.
Moreover, the DeFi ecosystem at large hasn’t recovered from the losses yet, following the rally it has been recording from the past few months.
So, YFI is not alone in these losses; as a matter of fact, many like bzrx, SWRV, CRV, UMA, and MLN are down 60% to 85% in the past 30 days.
However, for YFI, there is an additional driver behind the downtrend.
As we reported, Eminence.finance was launched and exploited to drain $15 million, all within a few hours of the project getting in the limelight.
The unannounced and unaudited project was Yearn.Finance founder Andre Cronje’s creation.
hypothetically if i saw andre shill $emn and the tweet was early, would I ape in 10-50k? probably
would i get rugpulled? probably
would i be pissed at andre for making that tweet? definitely, he would have been the catalyst for my entry
andre should be cognizant of that
— CryptoGainz (@CryptoGainz1) September 29, 2020
Trader and economist Alex Kruger, who has been a YFI bull, revealed that he no longer holds any YFI as he took the profit. “My assessment made on the fly indicated YFI could crash. When shit hits the fan, it usually pays to react fast and hit it,” he said.
He further said trust in founder matters and “Cronje simply made the YFI trade more difficult.”
Kruger wasn’t alone in that given that on Sept. 29, with a 16% drop in price, the number of addresses that transferred out all their tokens and have zero balance reached its highest number ever at 1.72k addresses, as per IntoTheBlock.
DeFi took another leg lower overnight, particularly $YFI. Thinking its underperformance relative to the rest of crypto is likely over. I bought back in this morning, toghether with a couple of other DeFi tokens.
— Alex (@classicmacro) September 30, 2020
In the EMN debacle, not only YFI’s communications lead was involved in promoting the project, but Cronje himself also retweeted Eminence.Finance’s ambiguous tweets.
“EMN is a Yearn product, contract deployed by Yearn #2 Blue muppet, a Yearn team member, shills EMN #3 Cronje talks surprise launches #4 Cronje promotes eminencefi while people buying EMN #5 EMN exploited, everyone gets rug pulled.”
I have officially resigned from the official yearn finance team.
Unofficially I am still going to do the same thing.
I just don’t get any more yUSD.
I hope they still pay for September.
Otherwise…
I’m calling the FBI. #halfrekt
— BlueKirby.eth // YFI 🔥 (@bluekirbyfi) September 29, 2020
To Cronje’s credit, the crypto community voted to be surprised by the project launch!
In the end, Degen investors might have learned a few things here, especially not to go all rushing-in in barely researched or audited projects.
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