Floki Inu Deposits on Inverse Finance Break $44M Within Hours

Projects founded as meme coins don’t want to remain mere meme coins anymore.

AccessTimeIconDec 22, 2021 at 9:10 a.m. UTC
Updated Dec 22, 2021 at 4:33 p.m. UTC

Shaurya is an analyst/editor for CoinDesk's markets team in Asia.

Over $44 million worth of floki inu tokens made their way to a new liquidity pool on decentralized finance (DeFi) project Inverse Finance in less than 24 hours of its launch.

The step marked a move away from “meme coin” status and towards broader use cases for the floki inu token. “$20M worth of FLOKI were already deposited into Inverse Finance within the first hour,” Inverse Finance founder Nour Haridy wrote in a tweet.

Data from digital-wallet scanners show 364 billion floki inu tokens are locked up on the floki pool on Inverse Finance as of Wednesday morning. DeFi projects like Inverse Finance rely on smart contracts instead of centralized middlemen to offer financial services to crypto users, such as lending, borrowing and trading.

Inverse Finance allows users to get token loans by supplying tokens to the protocol as collateral. The newly launched floki pool has a collateral factor of 50% as of Wednesday, which means users can take 50% of the value of their staked floki inu tokens in the form of DOLA, a stablecoin issued by Inverse Finance pegged on a one-to-one basis with the U.S. dollar, or other tokens.

There is no expiration date on the loan. However, if floki inu tokens drop in value and a user’s borrow limit exceeds 100%, the loan is liquidated and a 13% fee is taken on top of repayment to the liquidators.

“This process is automated and cannot be stopped so please borrow responsibly and do not borrow the full limit,” a document by Inverse Finance cautions.

The addition of floki inu comes after an onchain governance proposal was passed by the Inverse Finance community on Tuesday. Projects like Inverse Finance operate as decentralized autonomous organizations (DAOs), relying on their community to propose newer ways of growth, adoption and other technical improvements.

However, the addition did little to budge floki inu prices. CoinGecko data show prices remain flat at $0.00012 after an initial spike on Tuesday night. Token prices are down 32% in the past 30 days, mirroring a fall in the broader crypto market.

The rise of floki inu

Named after Elon Musk’s pet dog Floki, floki inu is one of the many meme coins entrants that mushroomed in the crypto market this year. A “rug pull” scare plagued the project early on after the original developer went rogue and exited with hundreds of thousands of dollars by draining a liquidity pool.

But community admins kept the token going and invested their own funds to keep the token afloat. A “V2″ version was announced by early adopters who helped relaunch the project, this time with security mechanisms to prevent rug pulls in place. The project has since grown to a market capitalization of $1.2 billionattracting criticism from the likes of the U.K.’s advertisement authorities for its incessant marketing on London’s public transport.

Floki inu is also working on contributions outside of the crypto market. Tweets by developers on Monday claimed the project will build schools in Guatemala, Nigeria and Laos in partnership with local government authorities and nongovernmental organizations (NGOs).

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Shaurya is an analyst/editor for CoinDesk's markets team in Asia.

CoinDesk - Unknown

Shaurya is an analyst/editor for CoinDesk's markets team in Asia.