I shared with you all when I aped into VVS Finance (very very simple Finance) on Cronos blockchain. Here's a link to that post. The project launched in November and was listed by Crypto.com exchange. Seeing the opportunity I jumped in and provided liquidity to the most popular CRO-VVS liquidity pool. The APR since then dropped by a couple of hundred points but it is still juicy enough. At the time of writing the LP and fees give you a nice 335% APR. I have been farming for a week and the app works fine. No problem whatsoever in providing liquidity, harvesting rewards in VVS token and reinvesting it in the pool or put them to mine more VVS. The Defi concept is like any other defi platform out there. The only benefit is the project's upward potential as this is the very first defi project on Cronos blockchain.
All was good until the toke price took a deep dive last night. The price was pretty stable for a month at around 0.0001 mark. I assumed it to be stable and did not worry much as the whole market is very choppy and dropping. The token then did a sharp turn and dropped more than 50% in a day to touch 0.000067. I have witnessed similar drops in many other projects in the past. It is nothing new.
Am I worried?
I am but I am not. There are a couple of reasons that I think would help regain the value of this token.
The project is still very new.
One cannot judge the project based on their performance in a month. We all know that there are bounty hunters out there who like to move to the next shiny thing in the market. The APRs are dropping and the crowd that chased the high APRs could have moved to something else. That reason combined with the general market crash could have triggered the price.
It's a price discovery.
Nobody knows the true value of this project yet. Last checked, they have a nice following with 41K followers on twitter. Surprisingly, I don't see their presence on Discord. I could be wrong about that as I just joined the group and may not have access to their channels. The price will depend on how the team market itself and what new product they would be able to offer to keep users excited and rewarded.
Cronos blockchain.
Like I said before, this is a flagship project in a way. This could give either positive or negative signal to the whole blockchain as the CDC reputation is on the line. There should be whales out there taking note of the price dive and keeping a floor not allowing the price to dive deep. The chain is new and works like any other chain. I have no idea about the technicalities around the chain but it sure feels like any other ETH compatible chains out there.
Crypto.com backing.
CDC is huge in marketing. They have more than 7 million active users. If only one percent of that crowd decided to join defi to experiment with Cronos and VVS, this project would never go down. I am banking on that informal collaboration like Binance and pancakeswap had. I hope CDD will support the project in the long run.
There are plenty of reasons to get worried and many others to not worry about the price dive. Not a financial advice, but I feel like the price will at least reach to previous high when this market shows upward trend. I am not worried. Reinvesting the reward is your mantra when you are DEFI-ing.