The token’s market cap slumped to the $4.4 million mark, as per the data from coinmarketcap, with volumes at more than $8 million, about 1.8 times the entire m-cap.
The total and maximum supply of Gari tokens is capped at 1 billion, with its total existing self-reported supply is about 45.8 million tokens, according to the data.
The sharp fall has kept the crypto experts, analysts and investors on tenterhooks, baffled over the thought that Gari is India’s own Terra (LUNA) in the making. While a few experts agreed to the point hesitatingly, others did not.
Seeing the sharp drop in the prices of Solana based tokens, holders started to panic and sold off their tokens, adding to the downward trend, said Edul Patel, Co-Founder CEO, Mudrex.
“Gari assured investors on Twitter and Chingari that their tokens have been safe recently,” he added. “It has promised to look into the matter with Indian crypto exchanges, which to an extent, gained their investor’s confidence back.”
Even after the recent crash, the token still has a solid user base for its incentivising program, which rewards its users and creators for spending time on the app, experts said.
On the other hand, market experts’ clear communication would have helped Chingari’s case and should have informed the users about the change in tokenomics.
Sharat Chandra, VP – Research & Strategy, EarthID, said that the tokenomics of Gari was changed abruptly, and the Gari team sold the tokens through a simple agreement for future tokens (SAFT), a token dump of sorts.
Ventures claims that the circulating supply of tokens shot up from about 43 million to 150 million post the dump.
“The ambiguity on tokenomics and allegations levelled by Titan Ventures has led to the erosion of investors’ trust. Though the Chingari team has refuted the allegations, investors will likely press the sell button,” he added.
A simple agreement for future tokens (SAFT) is a security issued for the eventual transfer of digital tokens from crypto asset developers to investors. SAFTs were created to help crypto ventures fundraise without violating regulations.
Some believe that the game is over for the token, whereas others suggest investors should assess the project’s tokenomics on its merit and make decisions accordingly.
Vikram Subburaj, CEO of Giottus Crypto Platform, said that establishing clear and transparent communication channels with investors will be a good beginning point to regain trust. The company should focus on creating a sound product.
“The future will depend on multiple factors like clarity into the recent dump of GARI tokens, product roadmap, adoption of Chingari platform by content creators and consumers, overall macroeconomic conditions,” he added.