The native token CORE of Core DAO crashed, losing around 50% of its value within 24 hours. According to the official statement from Core DAO, the drop was triggered by a series of large sell orders that hit the market in a short span.
These heavy sell-offs created intense downward pressure, which quickly spilled into the lending ecosystem. The result was a rapid liquidation cascade on Colend, a protocol tied to the Core ecosystem.
How the Liquidation Cascade Unfolded
The team explained that once prices started falling, leveraged positions on Colend dropped to required collateral levels. This forced automatic liquidations, accelerating the decline further.
As more positions were liquidated, selling pressure increased, creating a feedback loop. The protocol itself functioned as designed, meaning the crash wasn’t caused by a technical failure but by market dynamics.
According to the team, most of these positions have now been cleared, and only limited exposure remains in the system.
Team Response and Stabilization Efforts
Following the crash, the Core Foundation and the Colend team stepped in to stabilize the situation. They confirmed they are actively monitoring the market and working to maintain orderly operations. Their message shows that this was a “market-driven event,” not a structural issue with the protocol.
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Analysts Point to Market Pattern
Crypto analyst MOON JEFF framed the event as part of a recurring cycle rather than an isolated failure. He compared the situation to last year’s Mantra crash, suggesting that sudden collapses like this tend to repeat across different projects. His view implies the drop may be less about CORE itself and more about broader market structure, where leverage, liquidity gaps, and timing often trigger similar cascades.
Rug Pull Concerns Surface
On the other side, an X user raised serious concerns about transparency and possible insider activity. He questioned whether the CORE team could have played a role, pointing to the token’s extreme drop from around $7 to near-zero levels.
He also highlighted two red flags: the project locking its comment section shortly after addressing the crash, and reports that a large holder, possibly a whale, dumped around 2.8 million CORE tokens.
On-Chain Data Fuels Speculation
Meanwhile, another on-chain observer added more detail by identifying a wallet that allegedly sold nearly 3 million CORE tokens. According to his analysis, the wallet has since reduced its holdings to almost nothing, reinforcing the narrative that a single large seller may have triggered the cascade.
This aligns with the core team’s explanation that “large market sells” sparked forced liquidations on lending protocols like Colend, though the identity and intent of the seller remain unclear.
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FAQs
CORE is the native token of the Core DAO ecosystem, used for staking, governance, and paying fees within its Bitcoin-aligned blockchain network.
CORE dropped due to large sell-offs that triggered liquidations on Colend, causing a cascade of forced selling and sharp price decline.
Recovery depends on market sentiment and liquidity. If selling pressure eases and demand returns, CORE may stabilize over time.
The team says it was market-driven, not a technical issue. The protocol worked as intended, but leverage and selling caused the drop.
No confirmed rug pull exists. It appears to be a leverage-driven crash, though whale activity and transparency concerns raised questions.
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