Yesterday, the drama surrounding one of the external projects being developed by Yearn.
Finance founder Andre Cronje helped fuel the token's ongoing downtrend.
Cronje had hinted at its creation on multiple occasions on Twitter, and investors quickly began taking steps to manually mint the tokens related to the project - called EMN - through calling the contracts on Etherscan and depositing DAI. Rapidly, millions of dollars had poured into the contract, and external pools on Uniswap began opening up.
Now, one analyst is noting that he is concerned that EMN's demise will have grave short-term implications for YFI due to its close connections with Cronje.
Finance founder creates new project; eager investors get rug pulled.
Finance, which grew from nothing to having a billion-dollar market cap in a matter of mere months, investors are eager to get their hands on any tokens that are at all related to the project's founder, Andre Cronje.
Because of Cronje's ethos of testing in production, investors who are closely tracking his projects may end up trying to mint tokens from contracts that are faulty.
Even though users only lost $8 million while engaging with the unreleased, highly risky contract, it still shook investors' faith in Cronje, sparking an intense YFI selloff.
Finance's outlook - at least in the short-term - was weakened by the drama surrounding EMN. "I don't hold YFI any longer. Do think it will recover - and make ATHs. Trust in founders matters, and Cronje simply made the YFI trade more difficult. Will re-enter at some point, and trade it more actively."
Until talk about EMN dies down, there's a strong possibility that further downside is imminent.
Why analysts are concerned with Yearn.finance following EMN debacle
Published on Sep 30, 2020
by Cryptoslate | Published on Coinage
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