Treehouse crypto price has been in a freefall after its airdrop backfired, despite its total value locked (TVL) soaring amid exchange listings. TREE token plunged to a low of $0.5053, down by 40% from its highest point on Tuesday. Its market capitalization has plunged from $203 million to $83 million.
Why the Treehouse Crypto Price Has Crashed
Treehouse is one of the top players in the decentralized finance (DeFi) industry with a total value locked (TVL) of over $525 million, up from $28 million in September last year.
For starters, Treehouse is a platform that aims to bridge the gap between traditional finance (TradFi) and decentralized finance (DeFi). It does that by introducing standardized benchmark rates and yield-generating products.
Treehouse introduced some unique aspects like the Decentralized Offered Rate (DOR), a decentralized rate-setting mechanism inspired by the LiBOR. It also includes the Treehouse assets (tAssets), which generate yield through interest rate arbitrage. Treehouse has over 52,000 users who are generating an APR of about 3.2%.
READ MORE: ZBCN Price Analysis: Here’s Why the Zebec Network Crypto is Going Up
The TREE token crashed after its Binance-supported airdrop, as many of the recipients sold. This crash occurred despite being listed by some of the top exchanges, including Coinbase, Bybit, KuCoin, and MEXC.
The first phase of the airdrop was for 100 million tokens, which went to its earlier users. This aidrop was notable as it did not have any vesting period, meaning that users could sell their tokens.
It is common for newly launched tokens to crash after their airdrop. A good example of this is Spark, whose token crashed from $0.066 to a low of $0.026, a 56% dip within days.
The Treehouse price is also falling as investors anticipate further supply increases. According to CMC, there are now 156 million TREE tokens in circulation. This supply will start increasing on August 29, when 9.62 million of them will be unlocked.
9.62 million TREE tokens will be unlocked every 29th of the month until 2029. A bigger token of 90.6 million tokens will be released on January 29.
Will TREE Price Rebound?
A popular question is whether the TREE price will rebound after this crash. Odds are that the token will bounce back in the next few days, as we saw with Spark and Pi Network.
Both SPK and PI plunged after their airdrop and then rebounded by triple digits shortly after, as the chart below shows. This rebound happens as investors buy the dip and the selling pressure eases.
The TREE price will also rebound as the rest of the crypto market rebounds, as we predicted here.
READ MORE: Pepe Price Prediction: Is it Doomed or a Coiled Spring Ready to Surge?
