TROVE crashes upon launch: Official raid migrates to Solana igniting market fury

Recently, the derivatives platform Trove Markets has become a focal point in the crypto market due to its catastrophic token launch of TROVE and controversial decisions. The token plummeted over 95% within 10 minutes of its January 19 debut, with its market cap evaporating from nearly $20 million to less than $1 million.

Meanwhile, the project team announced at the last minute that they would abandon the original Hyperliquid integration plan, instead building the platform on Solana, and decided to retain up to $9.37 million (about 82% of the funds raised) from the ICO for development on the new chain. This series of actions has been widely criticized as a “Soft Rug Pull.”

01 Core Incident: A Sudden Chain Migration and Fund Retention

The core of Trove Markets’ incident lies in its last-minute betrayal of all commitments. The project was initially positioned as a decentralized exchange focused on perpetual contract trading of cultural assets (such as Pokémon cards and luxury watches) within the Hyperliquid ecosystem.

After successfully raising over $11.5 million through an ICO, the team suddenly announced just days before the original token generation event that they would completely abandon Hyperliquid and rebuild entirely on Solana.

The team explained that this move was due to a key liquidity partner withdrawing support for the 500,000 HYPE tokens staked on Hyperliquid, making the original plan unfeasible.

02 Market Collapse: Wealth Vanishing in Ten Minutes and Suspicious On-Chain Traces

The market performance of TROVE tokens was as shocking as its decision. According to DEXScreener data, the token’s price crashed 95% within just ten minutes of listing, falling to a low of around $0.0008.

• Market Cap Evaporation: Its market cap rapidly shrank from about $20 million to less than $1 million, nearly zero. As of January 20, its fully diluted valuation further declined to approximately $449,000.
• On-Chain Suspicion: Investigations by blockchain analysis platform Bubblemaps raised doubts. It was found that a single entity controlled up to 12% of the TROVE supply through 80 newly created wallet addresses.
• Concentrated Fund Sources: These wallets’ funds all originated from the non-custodial exchange ChangeHero. This pattern is highly similar to the common “split transfer” method in money laundering. Although there is no direct evidence linking these wallets to the team, community trust has been severely shaken.

03 Fund Dispute: Justification of Retaining $9.37 Million and Community Outrage

The project team’s handling of the massive funds raised is the direct cause of community outrage. They announced that out of the more than $11.5 million raised, $9,397,403 (about $9.37 million) would be retained for the development of the Solana version, with only about $2.54 million being refunded.

The stated purposes for the retained funds include:

• Frontend and backend infrastructure development
• CTO salary
• Advisory team expenses
• Marketing and operational costs

Investors strongly questioned why funds raised for building on Hyperliquid could be legally used for a completely different Solana project after the project’s direction changed fundamentally. Many demanded full refunds and accused this move of constituting fraud.

04 Risk Warning: Chaotic ICO Process and Industry Reflection

This incident exposed serious flaws in transparency and accountability in some current ICOs and token issuances. In fact, signals of chaos had appeared in TROVE’s ICO process even before the collapse.

The project team once announced a five-day extension of the sale period, then retracted the decision within hours, calling it a “mistake.” Such unprofessional behavior now appears to be a precursor to major risks.

Industry experts and thought leaders have spoken out condemning the incident. Mike Dudas, founder of The Block, publicly accused: “Trove falsely retained $9.4 million of ICO funds raised from the public. Any service providers, advisors, influencers, or others involved in this scam should be exposed and ashamed.”

05 Platform Responsibility: Seeking Security on Regulated Trading Platforms like Gate

The TROVE incident is a profound case concerning market risk, project integrity, and investor protection. It highlights the enormous risks faced when investing in an environment lacking transparency and effective oversight.

For investors seeking asset security, choosing compliant trading platforms like Gate, which uphold strict listing review standards and aim to provide transparent trading environments, is crucial.