---
type: source
title: "Trove Markets ICO Collapse: $9.4M Retained After 95-98% Token Crash"
author: "DL News / Protos"
url: https://www.dlnews.com/articles/defi/investors-in-trove-markets-furious-as-token-crashes/
date: 2026-01-20
domain: internet-finance
secondary_domains: []
format: article
status: processed
priority: high
tags: [metadao, futarchy, ico, rug-pull, mechanism-failure, trove-markets]
---

## Content

Trove Markets raised $11.4-11.5M in a MetaDAO ICO (January 8-12, 2026, TGE January 20, 2026) to build a perps DEX for physical collectibles (Pokémon cards, CSGO items) on Hyperliquid. The project subsequently:

- Announced a last-minute pivot from Hyperliquid to Solana days before TGE, blaming a liquidity partner withdrawing $500K of HYPE tokens
- Launched the TROVE token, which immediately crashed 95-98% from ~$20M FDV to under $600K
- Retained ~$9.4M of ICO funds, claiming it was spent on developer salaries, infrastructure, CTO, marketing — not refunded to investors
- ZachXBT's onchain analysis showed developers sent $45K to a crypto casino deposit address
- Bubblemaps revealed KOL wallets received full refunds while retail investors lost 95-98%
- Protos later identified the perpetrator as a Chinese crypto scammer
- Investors made legal threats; no reported class action filed as of search date (March 21, 2026)

The "Unruggable ICO" protections MetaDAO advertises only trigger when a project FAILS to hit its minimum raise. Trove hit its minimum ($11.4M raised), so the refund mechanism was never triggered. Once the minimum is met, the team has the capital — there is no post-TGE protection against fund misappropriation.

Secondary sources:
- Yahoo Finance: https://finance.yahoo.com/news/trove-shocks-investors-9-4m-095721735.html
- Crypto.news: https://crypto.news/trove-markets-retains-ico-funds-after-platform-pivot/
- Protos (fraud identification): https://protos.com/trove-markets-perpetrator-is-chinese-crypto-scammer-report/
- Protos (what happened): https://protos.com/what-happened-with-trove-markets/

## Agent Notes

**Why this matters:** Most damaging single data point for futarchy's selection thesis. MetaDAO's futarchy markets successfully selected a project (high commitment, minimum hit) that turned out to be fraud. This directly challenges the claim that skin-in-the-game filtering produces quality selection outcomes. Also reveals a critical design gap in the "Unruggable ICO" branding.

**What surprised me:** The specificity of the protection gap: the mechanism DOES protect against failed minimums (Hurupay) but provides ZERO protection once a raise succeeds. The "Unruggable" label is misleading given this scope — it's unruggable for the MINIMUM, not for post-TGE behavior. This is a named product claim that misrepresents the protection scope.

**What I expected but didn't find:** Evidence that the MetaDAO community had priced in fraud risk (e.g., thin commitment, low confidence signals in the prediction markets). Would have been meaningful evidence the mechanism detected uncertainty. Absence of this data is a gap.

**KB connections:** Relates to futarchy manipulation-resistance claims. If the mechanism cannot detect or price fraud during selection, the "manipulation resistance because attack attempts create profitable opportunities for arbitrageurs" claim needs scope qualification. The defenders only profit if they SHORT the failing ICO — which requires a liquid secondary market for the position, which doesn't exist pre-TGE.

**Extraction hints:**
1. "Unruggable ICO protections have a critical post-TGE gap" — new claim, not currently in KB
2. "MetaDAO futarchy selection does not prevent post-TGE fund misappropriation" — operational scope qualification
3. Evidence against "futarchy is manipulation-resistant" — challenge or scope condition

**Context:** January 2026, immediately follows MetaDAO's Q4 2025 success quarter. Trove was one of 6 ICOs in Q4 2025. The collapse significantly damaged platform reputation, contributed to Hurupay's subsequent failure to hit minimum.

## Curator Notes

PRIMARY CONNECTION: futarchy manipulation-resistance claims (manipulation-resistant-because-attack-attempts-profitable.md or equivalent)
WHY ARCHIVED: Direct empirical challenge to futarchy's selection superiority thesis; reveals product design gap in "Unruggable ICO" branding
EXTRACTION HINT: Focus on the post-TGE protection gap as a new claim, and on Trove as a challenge to manipulation-resistance claims with scope qualification (not refutation — pre-ICO manipulation resistance is different from post-TGE fraud protection)
