Yearn Finance (YFI) saw a drastic 45% decline in its price on November 18, falling from highs of $15,548 to lows of $8,918. On Sunday morning, November 19, YFI is trading just above $9,260. This wiped out all of last week’s gains, as YFI had seen a 170% climb over the past month.
The price slump was caused by negative sentiment in the market due to allegations of potential market manipulation. This was reinforced by huge deposits to exchanges and on-chain data shared by Lookonchain which showed a whale selling as prices plummeted.
The dYdX team also pointed out potential market manipulation and stated that they used $9 million from their v3 insurance fund to plug liquidation gaps in the YFI market. According to Coinglass data, a total of $4.55 million was liquidated in 24 hours, with longs accounting for over $3.07 million.
YFI is the governance token of Yearn Finance, one of the leading yield farming protocols in the decentralized finance (DeFi) ecosystem. The platform integrates with some of the top DeFi players, including Aave, dYdX and Compound, through its suite of products that include lending aggregation, yield generation, and insurance. Its recent price spike could be attributed to profit deals. As of writing, YFI’s weekly gains have been reduced to 2%, with 30-day performance down to +85%.
