An altcoin derivatives trading platform has had a significant development recently. The Pinnako community filed serious charges against iZUMi Finance, leading to a sharp drop in token prices. Here are the details…
Crisis in iZUMi Finance: Altcoin price lost momentum
Users claimed that DeFi protocol iZUMi Finance was busy selling their tokens. Thus, it caused widespread concern among investors and the crypto community in general. The controversy arose after iZUMi Finance launched a double reward mining operation with Pinnako on July 7. The total prize offered was an attractive 120,000 esPIKO and 1 million iZi. However, doubts arose when iZUMi Finance allegedly caught PIKO holders exchanging their stake reward token, esPIKO, for ETH.
📣 Exciting news! We're thrilled to have a partner like @izumi_Finance to help us bring more benefits to the DeFi community. 💪
Join us now and earn more rewards by providing liquidity. 🌊 It's a great time to get started and harvest those lucrative earnings. 💰#PIKO #Pinnako… https://t.co/mE6rw4XPwm
— Pinnako #RealYield (@PinnakoDex) July 6, 2023
This is not the first time that iZUMi Finance has been involved in such allegations. On June 13, Blockchain game MetaLine in the Arbitrum ecosystem expressed its concerns about the DeFi protocol’s misuse of mining rewards and token dump. The document accused iZUMi Finance of embezzling $10,000 worth of MTG and only partially including MTG sent by MetaLine in the liquidity mining reward pool. Meanwhile, IZI price is changing hands at $0.02, down 1.5 percent. However, the volatility in price is also visible on the 24-hour chart below:
Response to accusations
In response to the accusations, iZUMi Finance defended its actions, stating that they follow a certain approach when collaborating with projects that launch dual incentive mining operations. The DeFi protocol claimed that token incentives from the binary mining pool are distributed at a predetermined rate, and unconsumed emissions are recycled back into the mining pool to provide a deeper level of liquidity. Despite the announcement by iZUMi Finance, the Pinnako community was not convinced and the allegations caused significant turmoil in the crypto space. Token prices for both esPIKO and iZi have dropped sharply, with investors expressing uncertainty and disappointment.
In light of the accusations, the crypto community has demanded greater transparency and accountability from DeFi protocols like iZUMi Finance. Recent events have raised concerns about the prevalence of token dump and abuse of mining rewards. This highlighted the need for stricter regulations and oversight in the industry. Experts suggest that decentralized finance platforms should implement robust mechanisms to prevent such incidents in the future. Smart contract audits, third-party security assessments, and increased community involvement in decision-making can help maintain trust and integrity within the ecosystem. In the coming days, the crypto community will undoubtedly be keeping a close eye on the events surrounding iZUMi Finance and the alleged token dump allegations.
