Trove Markets token sale causes controversy due to contract changes, investors suffer significant losses in prediction markets

Source: PortaldoBitcoin Original Title: Sale of Trove Markets tokens causes confusion after changes affect Polymarket bets Original Link: Trove Markets’ public token sale, which raised approximately $11.5 million, sparked controversy due to last-minute contract changes and contradictory communication from the project team, leading to investor confusion and directly impacting a prediction market.

This incident triggered accusations of poor governance, significant losses for secondary market participants, and an open apology from the project leaders.

Until the final minutes, Trove’s initial token offering (ICO) appeared to have no obvious issues, with the fundraising period nearing the end according to the original schedule announced by the project.

When users noticed that the sale contract had been updated to extend the deposit deadline to January 20, allowing many investors to believe that funding could still continue after the deadline, the situation changed. This change surprised participants who had already made decisions based on the previous deadline.

Almost simultaneously, a large number of buy orders began appearing on a prediction market that allows betting on the final fundraising amount of Trove’s public sale. Unusual trading activity was recorded in the last few minutes, with estimates of 100,000 to 300,000 shares appearing on the order book near close.

Screenshots and trading data shared on social media raised suspicions that some of these orders might be linked to wallets associated with the project itself, although this connection has not been officially confirmed.

Shortly afterward, Trove Markets increased uncertainty by announcing a five-day delay in the token sale, claiming the measure was intended to ensure a fairer distribution. The announcement had a direct impact on the prediction market, with prices soaring as investors tried to readjust their positions based on the expectation of higher funding amounts.

However, this additional window was very brief. Soon after, the team posted a new message stating that there would be no extension and that the original plan would remain unchanged, leaving investors who had already adjusted their positions no time to react.

Reports on social media indicated that a user on a prediction market placed about $89,000 in bets before the market closed, based on the expected delay. This position could have yielded a profit of about $200 if successful, but after the reversal of the announcement, an estimated loss of $730,000 occurred, making it one of the most widely known examples of losses caused by confusion.

Trove Markets Apologizes

In response to the negative reactions, the Trove Markets team issued a public statement. In the initial statement, the team said that the sale had raised over $11.5 million, and that proportional refunds and token allocations would occur before the token generation event, explaining the short-term delay as an attempt to maintain “integrity” of distribution.

However, this message was later replaced by a more detailed apology statement. “We made a mistake when announcing the delay, and we are correcting this issue,” the team said, admitting they overfocused on a small group of allocators while neglecting the broader community.

One of the project’s core members, using the pseudonym “Unwise,” provided more background in another article, claiming that the team discovered signs of coordinated wallet groups at the last minute of the sale. According to him, there were concerns that a single participant might concentrate an unproportionate share of the funding.

With about 25 minutes remaining and other phases ongoing, extending the deadline seemed to be the safest option at the time, which he later described as “obviously a mistake” in the face of market reactions.

In response, Trove Markets announced it would commission an independent third-party review covering the entire funding and wallet distribution process, and pledged to disclose the results publicly. Currently, the project states that the fundraising has officially ended, and focus has shifted to product launch.