Trove Token Drops 95% in 4 Hours: From $20 Million to $950,000 - How to Self-Destruct in a Week

The launch of Trove has become the most surreal “reverse teaching” in the crypto market of 2026. On January 20th early morning, this Perp DEX project, which just raised $11.5 million through an ICO last week, listed the TROVE token. At opening, its fully diluted market cap (FDV) was $20 million, but within just 4 hours, it plummeted to $950,000, a decline of over 95%. Even more ironically, the project team announced they would retain $9.4 million of ICO funds to continue development, sparking another wave of community outrage.

From Promise to Betrayal: Trust Collapse in One Week

The truth behind the diversion

Trove’s initial narrative was clear: build a perpetual contract DEX based on the Hyperliquid ecosystem, focusing on leveraged trading of collectibles, RWA, and other non-traditional assets. This story was innovative enough to attract significant funding, successfully raising $11.5 million in the ICO.

But just a week later, the project suddenly announced abandoning the Hyperliquid route and shifting to rebuild the entire DEX on Solana. This change seemed like a technical decision, but in reality, it marked the first breach of trust. According to the project team, their liquidity partner supporting Hyperliquid decided to close out 500,000 HYPE positions, altering the project’s constraints. However, this explanation raised more questions: why could a key LP’s decision overturn the entire product roadmap? Why was this only discovered after the ICO?

Series of Controversies and Cumulative Effects

Beyond the route change, Trove faces multiple allegations:

• Paid promotion by KOLs: Community feedback suggests the project paid KOLs for promotion, with funds flowing to entertainment platform deposit addresses
• Repeated fundraising rule changes: The ICO deadline was changed multiple times, indicating poor project management
• Opaque fund flow: Despite raising $11.5 million, the project announced retaining $9.4 million for development, implying the actual funds used for product development might be much lower than expected
• Operational team identity issues: On-chain analysis via Telegram accounts suggests Trove’s operational team is likely from Iran, possibly even from the Kurdish region

Mike Dudas, founder of The Block, gave a very direct comment: “Trove raised funds from the public under false pretenses and still retains $9.4 million of ICO funds. Any service providers, advisors, KOLs, or others involved in this scam should be exposed and condemned.”

Market Reaction to the Price Crash

This decline reflects the market’s complete rejection of the project. ICO investors face catastrophic losses. Based on the ICO price, investors who bought at ICO are now losing over 90% by the time of listing.

Even more concerning is what the $9.4 million retained by the project team implies. It means the team controls a large amount of tokens, potentially planning to continue selling later. This further depresses market expectations for TROVE.

Why Did It Collapse So Quickly?

Deep down, Trove’s collapse results from multiple factors stacking up:

1. Information asymmetry: Investors were promised Hyperliquid deployment during ICO, but at listing, the project switched to Solana—an outright breach.

2. Lack of transparency: Why change course? What are the real reasons? The project’s vague explanations fuel speculation.

3. Operational issues: Paid promotion by KOLs, repeated deadline changes, unclear fund flow—all point to chaotic management.

4. Timing sensitivity: The route change was announced while HYPE was under significant unstaking pressure (over 3.2 million HYPE unstaking in the next five days), making market sentiment fragile.

5. Participant expectations: ICO participants expected a project with ecosystem support, but it turned into an isolated Solana project, causing the value proposition to collapse instantly.

Future Risks and Possible Directions

Based on current circumstances, several risks deserve attention:

First, many ICO participants may seek legal recourse. Industry figures like Mike Dudas have already begun criticizing, which could increase public pressure.

Second, the $9.4 million retained by the project might continue to be sold, further depressing the token price. If the project continues raising funds during a market downturn to support development, investor dilution will intensify.

Finally, Trove’s collapse could cause short-term confidence shocks to the entire Solana ecosystem. Since this is a project rebuilt on Solana, operational issues will be magnified and scrutinized.

Summary

Trove’s FDV plummeted from $20 million to $950,000—not just a market fluctuation, but a complete breach of trust by the project team. The route change to Solana was the trigger, but the core issues lie in transparency, management quality, and operational integrity. For ICO participants, this is an expensive lesson: no matter how appealing the story, clear execution and transparency are paramount. For the market, Trove’s case serves as a reminder to all: beware of projects promising change but executing chaotically.