- The market of decentralized finance has been gripped by a wave of collapsed projects.
- Soft Bitcoin developers see no financial viability for the project.
- Custom SBTC tokens will eventually be converted to ETH.
The analogue of bitcoin in the Ethereum blockchain network fell in price by more than 99% in just a day due to the team’s decision to stop supporting the project.
A clone of bitcoin in a price ratio of 1: 0.0001 BTC based on the Ethereum blockchain collapsed by 99% in a day. At the time of this writing, the price of the Soft Bitcoin token (SBTC) is $ 0.003323 USD (-99.48%).
The fall came after the development team announced their decision to stop development because of the “financial nonviability” of the project.
“The team believes that although a partial reserve system is theoretically possible, it is not viable due to the insufficient size of the fund,” the developers wrote on their Discord channel.
The Soft Bitcoin development team believes that the idea of project implementation can be picked up by the community of another cryptocurrency project – Ampleforth. Tokens, which were not used for project marketing and staking, will be ultimately burned through Uniswap.
All user assets will be converted to Ethereum cryptocurrency (ETH).
This is not the first project in the decentralized finance (DeFi) market to crash after a short-term price pump. For example, a similar situation previously happened with the KIMCHI token, which raised almost $ 500 million in a matter of hours after launch, but almost immediately collapsed by 100% in price.
Such a rapid fall in the price of KIMCHI even provoked law enforcement raids on the Gate.io exchange, whose users suspect the site of deliberately listing unverified tokens.
However, almost the entire DeFi market at the time of writing is in an unstable position. Aggressive selling amid falling bitcoin prices have plunged historical highs for many DeFi tokens. The correction led to the fact that in a few days the capitalization of the DeFi market collapsed twice from $ 13.2 billion to $ 6.3 billion.
The potential negative scenario for the development of the DeFi market was previously announced by the head of the marketing department at Messari Connor Dempsey. In his opinion, a massive misunderstanding of what is happening around DeFi is growing in the cryptocurrency market, and this misunderstanding will ultimately do nothing good for those who decide to invest heavily in the rapidly emerging digital finance market.