From modifying rules to backstabbing the community: Trove, a failed ICO stress test

Author: Prathik Desai

Original Title: The New ICO Test

Translation and Editing: BitpushNews

The new year has brought a series of major events to the cryptocurrency market. The rekindled tariff war between the US and Europe has once again pushed uncertainty to the forefront. Following closely behind was a wave of large-scale liquidations experienced by the market last week.

However, tariffs are not the only “dissonant note” at the start of this year. Several first-time token offerings (ICOs) that occurred over the past week give us ample reason to revisit a topic that has been a hot discussion in the crypto community for nearly a decade.

Veterans in the crypto space believe that the crypto world has long moved beyond the 2017 ICO era. Although today’s ICOs are quite different from those days, the two ICO events last week still raise many critical questions—some are old familiar issues, others are new.

Both Trove and Ranger’s ICOs were oversubscribed, despite the absence of the frantic atmosphere like the Telegram countdown of 2017. Nevertheless, the evolution of these events still serves as a reminder to the community: fairness in the allocation process is crucial.

This article will delve into the token sale events of TROVE and RNGR, inspiring us to consider how ICOs are evolving and how investor trust mechanisms are being implemented in the allocation process.

The story begins:

The Trove ICO, which took place closer to the two, ran from January 8 to January 11, raising over $11.5 million. This exceeded the initial goal of $2.5 million by 4.5 times. The oversubscription clearly demonstrated investor support and confidence in the project, which was positioned as a perpetual contract exchange.

Trove had promised to build on Hyperliquid, leveraging the ecosystem’s perpetual contract infrastructure and community.

However, just days after raising funds and before the token generation event, Trove suddenly shifted course, announcing that the launch would now be on Solana instead of the originally promised Hyperliquid. Those participants who invested trusting Hyperliquid felt betrayed in an instant.

This shift not only shook investor confidence but also sparked widespread confusion. When another detail was dug into by investors, chaos deepened: Trove stated it would reserve about $9.4 million of the raised funds for a re-designed plan, only returning a few million dollars remaining. This undoubtedly sounded a red alert.

Eventually, Trove had to respond.

“We’re not just taking the money and running,” it stated in a declaration on X platform.

The team insists that the project remains focused on building, just with a different approach.

Even without making any assumptions, one thing is clear: it’s hard to imagine contributors not being caught in an unfair, retroactive framework. The funds were initially committed based on an ecosystem, a technical pathway, and an implicit risk profile. The revised plan, however, requires them to accept a different set of assumptions without reopening participation terms.

It’s like changing the rules for a player after a game has started.

But by then, the damage was done, and the market voted with its feet, punishing the collapse of trust. The TROVE token plummeted over 75% within 24 hours of listing, with its market cap nearly approaching zero.

Within the community, some no longer rely solely on intuition but instead dig into on-chain fund movements. Crypto detective ZachXBT pointed out several suspicious transactions: about $45,000 in USDC from angel round funds ended up in a prediction market platform, and even transferred to an address associated with a casino.

Whether this is a careless bookkeeping error, poor fund management, or a genuine red flag remains controversial. Many users criticized the refund process, noting that only a few entitled refundees received their funds promptly.

Amid all this, Trove’s statement failed to reassure those investors who felt betrayed. Although it emphasized that the project would continue—an on-Solana perpetual exchange—it did not adequately address the economic concerns caused by the shift in direction. It provided no details on the revised fund deployment and governance plans, nor more explanation on the refund roadmap.

While there is no concrete evidence linking this shift to misconduct by the team, the incident shows that once trust in the fundraising process weakens, every data point is more likely to be scrutinized with suspicion.

What makes this turmoil even more unstable is how the team handled its discretion after the fundraising ended.

Oversubscription effectively handed control of capital and influence to the project team. Once the team changes direction, supporters have few options besides selling on the secondary market or applying public pressure.

To some extent, Trove’s ICO still bears similarities to many projects from past cycles. Although mechanisms are now more regulated and infrastructure more mature, the core issue spanning old and new cycles remains trust—investors still have to rely on the team’s judgment rather than a clear, dependable set of rules.

The ICO of Ranger, conducted a few days earlier, offers an important contrast.

Ranger’s token sale took place from January 6 to 10 on the MetaDAO platform, which requires the team to predefine key fundraising and allocation rules before the sale begins. Once started, these rules cannot be altered by the team.

Ranger sought a minimum of $6 million in funding and sold about 39% of its total token supply through a public sale. Similar to Trove, its sale was also oversubscribed. But MetaDAO’s constraints meant the team had anticipated the possibility of oversubscription and had arrangements in place from the start, unlike Trove.

When oversubscription occurred, the proceeds were stored in a treasury governed by token holders. MetaDAO’s rules also limited the team’s access to the treasury to a fixed monthly allowance of $250,000.

Even the distribution structure was more clearly defined. Participants in the public sale received full liquidity at the token generation event, while pre-sale investors faced a 24-month linear unlock period. Most tokens allocated to the team would only unlock once RNGR reached certain price milestones—2x, 4x, 8x, 16x, and 32x of the ICO price—measured over a three-month weighted average price, with at least 18 months of lock-up before any unlock.

These measures indicate that the team embedded constraints directly into the fundraising structure, rather than relying on discretionary power after the fact. Control over capital was partly transferred to governance rules, and any profits for the team were tied to long-term market performance, protecting contributors from “rug pulls” on launch day.

Nevertheless, concerns about fairness still persist.

Like many modern ICOs, Ranger used a pro-rata distribution model for oversubscribed sales. In theory, this means everyone should receive tokens proportional to their committed capital. However, Blockworks Research pointed out that this model often favors participants capable of over-committing capital. Smaller contributors tend to receive disproportionately less.

However, there is no simple solution to this issue.

Ranger attempted to address this by reserving a separate token allocation pool for users who had already contributed to ecosystem development before the public sale. While this alleviates some tension, it does not fundamentally solve a core dilemma: how to balance enabling more people to obtain tokens with ensuring participants receive meaningful shares.

Conclusion

The events of Trove and Ranger show that, nearly a decade after the first ICO boom, the industry still faces many constraints. The old ICO model heavily relied on Telegram announcements, narratives, and momentum.

The new model depends on structures—including unlock schedules, governance frameworks, treasury rules, and allocation formulas—to demonstrate restraint. These tools are often mandated by platforms like MetaDAO, helping to limit the autonomous discretion of the founding team. However, these tools can only reduce risk, not eliminate it entirely.

These incidents raise critical questions that every future ICO team must answer: “Who decides when the team can change plans?” “Who controls the funds after fundraising is complete?” “When expectations are not met, what mechanisms do contributors have?”

In any case, the issues revealed in the Trove case need correction. Changing the project’s launch plan should not be a snap decision. The best way to make amends here is for Trove to treat its contributors properly. In this case, that might mean full refund of funds and a re-launch under revised assumptions.

Though this is currently the most ideal solution, it is not easy for Trove to implement. Funds may already be deployed, operational costs incurred, and partial refunds executed. Reversing at this stage could trigger legal, procedural, and reputational complications. But this is the price to pay to clear the current chaos.

How Trove chooses to proceed may set a precedent for ICOs in the coming year. Today’s projects face a more cautious market environment—participants no longer equate oversubscription simply with consensus, nor do they conflate “participation” with “protection.” Only a truly sound system can provide a fundraising experience that, while not foolproof, is sufficiently trustworthy.