Cream drops following token supply inflation announcement

The Cream token has fallen off a cliff again. The first time we saw the blockchain-based token drop was when the decentralized finance (DeFi) money market and lending service’s network was hijacked by hackers. However, this time, the network didn’t get hacked. 

In an announcement by the network, Cream decided to compensate the people who lost their money due to the hack. However, the move seemed to have backfired as the governance token of the platform fell by more than 32% in a single day. 

While Cream has 2.9 million coins outstanding, according to data by CoinMarketCap, only 616,378 of those are in circulation. This increased circulation supply is what caused a drop in the price of the token. Opening the market at $85.5, the token dropped to as low as $47.9 the previous day.

Cream to reimburse those affected

The statement from Cream Finance said that the hack, which occurred on ‘October 27th, at block number #13499798, with a total impact of $130-million USD,’ will be a lesson for the firm as it improves its security features. 

“We will distribute 1,453,415 CREAM tokens to impacted users. We are utilizing remaining CREAM tokens within the treasury, and removing the project team’s remaining CREAM token allocation. There will be no further CREAM allocations to the team,” said the firm citing this method as the “path forward.”

These tokens will be up for grabs for 1 year, and affected users will receive an amount equal to their net position at the time the network froze. However, the users who have staked their tokens will continue to receive their profits from staking. 

“On the security front, we have tightened our token listing strategy to no longer include long-tail assets nor tokens that can be wrapped/unwrapped,” further added the firm.

It seems that investors reimbursed their tokens and sold them off to get fiat. This huge sell-off clearly stated the fact that the users were not happy with receiving CREAM as reimbursement instead of fiat.

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