Why is Mango Markets’ MNGO token surging despite a vote to shut down?

Why is Mango Markets’ MNGO token surging despite a vote to shut down?
фото показано с : invezz.com

2025-1-28 17:34

Mango Markets, a decentralized finance (DeFi) platform on the Solana blockchain, has made headlines with its decision to shut down operations, yet paradoxically, its governance token, MNGO, is experiencing a significant price surge.

The Mango price surge has caught many unawares with many questioning the forces behind the surge at a time when the platform is shutting down.

Mango Markets shutting down

On January 11, 2025, Mango Markets announced via its official X account that it would be closing down.

The closure was set to become effective on January 13, 2025, at 8 PM UTC, with a further announcement on January 25, 2025, specifying the final closure date as February 3rd, 2025.

Mango@mangomarkets·Follow

Mango Markets Shutdown Update Mango is closing on February 3rd, 2025 We ask all users to close their positions before this time to avoid liquidation and penalty fees The range of liquidation fees can be found here: app.mango.markets/dashboard

7:31 PM · Jan 18, 202510ReplyCopy linkRead 5 replies

This decision came in the wake of a settlement with the US Securities and Exchange Commission (SEC) for selling unregistered tokens, coupled with the aftermath of a massive $117 million exploit in October 2022.

In preparation for the shutdown, Mango Markets decided to wind down its Mango v4 and Boost services.

The platform planned to optimize for only 0.1% of deposits to be lent out, a sharp decline from 50%, which would make most borrowing activities on Mango economically unviable.

Furthermore, there were proposals to increase interest rates for several major cryptocurrencies like SOL, USDC, USDT, and ETH, alongside a tenfold increase in collateral requirements for new positions.

Mango@mangomarkets·FollowReplying to @mangomarkets

Mango V4 will optimize for 0.1% of deposits lent out, not 50% Expect interest hikes for $SOL, $USDC, $USDT, $ETH, $MSOL, $mangoSOL, and $INF Collateral requirements will increase by 10x for new positions Proposal 1 app.realms.today/dao/MNGO/propo… Proposal 2 app.realms.today/dao/MNGO/propo…

4:45 PM · Jan 11, 202511ReplyCopy linkRead 1 reply

These changes were part of the live governance proposals and set to be executable on January 13, 2025.

The unexpected surge in MNGO token price

Interestingly, despite the looming shutdown and the drastic changes to the platform’s operations, the MNGO token experienced a remarkable increase in value.

As of the latest data, the MNGO token was trading at $0.02893, marking a 60.2% increase in the last 24 hours and a 67.6% rise over the past seven days.

Mango (MNGO) price chart by CoinGecko Possible explanations for the price surge

One might hypothesize that the price surge in MNGO could be due to several factors.

Firstly, the announcement to destroy all MNGO tokens as part of the SEC settlement could be perceived as a move to create scarcity, thereby increasing the token’s value in the short term.

Investors might be buying in anticipation of this scarcity before the tokens are delisted or destroyed.

Secondly, there could be speculators betting on a potential last-minute turnaround or acquisition.

Although no concrete proposals for such scenarios have been publicized, the speculative nature of cryptocurrency markets often leads to unexpected price movements based on rumors or mere possibilities.

Another factor might be the ‘dead cat bounce’ phenomenon, where the price temporarily rebounds from a low point before continuing the overall downtrend.

Given that MNGO had seen a significant drop following the 2022 exploit, some might see this as a correction or a speculative play.

Lastly, there might be a rush among users to close positions or engage in last-minute trading before the platform shuts down, leading to increased activity and, consequently, volatility in the token’s price.

While the shutdown news might generally be seen as negative, the market’s reaction suggests that there’s more at play, including strategic token buying, speculation on future outcomes, or simply the dynamics of a market that thrives on volatility.

The post Why is Mango Markets’ MNGO token surging despite a vote to shut down? appeared first on Invezz

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