Gari, a social crypto token, was in the news for the wrong reasons. Promoted by a ‘Made in India’ video app Chingari, the Gari token recently tumbled to almost 80%, shocking the investors.
The fall kept the investors and experts on the edge as it seemed like another Luna in the making but now in India.
Considering it to be a black swan event, the investors started panicking, and the token saw a significant sell-off.
What is Gari Token?
Based on the Solana blockchain, the Gari token is the native token of Chingari.
Chingari is a video app that helps short-form video creators monetize their content on the blockchain using the Gari token.
Also, Chinagri has Salman khan as its investor and Brand Ambassador, which has led to more people accepting and following the Gari token.
Reason for the crash
As mentioned by Sumit Ghosh, CEO and Co-Founder of Chingari, there was a sudden sell-off of 2 million tokens which GSR, a crypto market maker, could not handle.
No one anticipated such a huge sell order as a market order can accommodate up to 600,000 worth of orders.
However, even after the crash, the token still enjoys a solid user base and is currently up by 10.92% in the last 24 hours.
Market experts believe there should have been clear communication to the investors about the changes in tokenomics.
According to Sharat Chandra, VP, Research and Strategy, EarthID, the tokenomics of Gari have changed abruptly, and the investors were not informed.
Additionally, the Gari team sold tokens through a simple agreement for future tokens.
A simple agreement for future tokens was created to help cryptocurrency ventures raise funds without violating regulations.
Also, this security is issued for the transfer of digital tokens from cryptocurrency developers to investors.
In the future, and as advised by the experts, clear communication would help regain the investors’ trust.
