Pike Finance Blames Botched Launch on Tokenomics

Cross-chain liquidity protocol Pike Finance is under fire after surprising users by launching its native token without any prior notice and a small liquidity pool.

The $P token opened at roughly a $9 million market capitalization but immediately sold off by over 90% to a $550,000 market cap. The price has since recovered some losses but remains at a 70% discount to its launch price.

On March 28, Pike concluded a successful community presale raise of $6.5 million, and on September 17, the team referred to the token generation event (TGE) as “fast approaching.”

The next official mention of the token came 15 minutes after the launch when the price had already cratered by 94%.

After the token launch, the team broke its silence on social media, where it had been quiet since Aug. 23, to say, “We are implementing a new playbook for the Pike token launch. We believe the existing playbook for launching utility tokens creates a significant misalignment in incentives between stakeholders.”

Controversial Launch

Presale participants were quick to point fingers at the Pike team, drawing attention to the fact that the protocol had been exploited twice over the course of a single week in April.

One user, who goes by Zerachielo, said, “​​Not so long after the presale, one of their contracts got "Exploited," and then a week after that, they got "Hacked" again for the second time. As one of the presale investors, of course, this doesn't look good, and they keep delaying the TGE. Many presale investors demanded refunds, which they rejected.”

Terry Lam, a co-founder of Pike, took to social media to address the community's concerns. Terry blamed the decision to launch with a $10,000 liquidity pool on the tokenomics the team designed, saying, “In order to add sufficient liquidity to the P/USDC LP pool, our team would require Pike tokens. Given the tokenomics design, our core team does not have access to sufficient Pike tokens to pair with a sizable stablecoin pool.”

He said the team plans to purchase $P tokens from the open market to boost liquidity over the coming months. The $P token liquidity pool is now up to $220,000, which may give the token more stability.

The Pike Finance team did not immediately respond to The Defiant’s request for comment.