Trove Markets, a planned decentralized perpetual exchange for collectibles, is facing a major crisis and strategic pivot after allegations of a $10 million HYPE token dump and the exit of a key liquidity partner. The project, which had raised $20 million through an initial coin offering (ICO) to secure 500,000 $HYPE tokens required to deploy on Hyperliquid's HIP-3 protocol, is now abandoning Hyperliquid entirely to rebuild on Solana.
The controversy began when on-chain data revealed a wallet linked to Trove Markets sold approximately 194,273 HYPE tokens worth roughly $10 million within a 24-hour period. The sales started with a modest $160,000 transaction but quickly escalated. Complicating matters, Trove's founder publicly denied controlling the wallet and requested its shutdown, only for the wallet to resume selling minutes later, fueling speculation of insider fraud or compromised access.
This incident followed existing criticism of Trove's ICO, which was extended at the last minute and oversubscribed, ultimately raising $11.9 million. The confusion reportedly led to losses of around $73,000 for Polymarket users. Further transparency concerns were raised by reports that the project paid influencers $5,000 per month for promotion while allegedly concealing team members' origins.
The core of the pivot stems from Hyperliquid's HIP-3 infrastructure requirement: builders must stake 500,000 HYPE tokens (worth ~$12.5M) as a security bond. Following the controversy, the undisclosed liquidity partner supporting Trove's HYPE position chose to unwind it. "After recent sentiment around Trove, the liquidity partner... chose to unwind their 500k $HYPE position," wrote pseudonymous team member "Unwise." This loss of the staked tokens forced the abrupt change in infrastructure.
In response to the allegations, the Hyperliquid Foundation donated 10,000 HYPE (worth ~$254,000) to renowned blockchain investigator ZachXBT to probe the token sales. The HYPE token has dropped approximately 60% below its ICO price since the events unfolded.
The project's timeline has been severely disrupted. The token generation event (TGE) for $TROVE, originally scheduled for 7 PM UTC on January 18, 2026, was first delayed to 9 PM UTC and then postponed further to Monday at 4 PM UTC. The planned February 10 mainnet launch on Hyperliquid has been scrapped. The team is now "rebuilding the perp DEX on Solana from the ground up." The sudden pivot has sparked outrage among crypto traders on social media, with many requesting refunds for their initial investments.
