Telegram-linked TAC Token Plummets 90% in 15 Minutes: What Happened?

The TAC (TON Application Chain) Protocol recently experienced a significant crash, with its token plummeting more than 90% in just 15 minutes. The token, which was trading at $0.06, dropped to $0.0046 in a rapid and unexpected decline.

Launched approximately a year ago, the TAC protocol is an EVM-compatible Layer 1 blockchain that connects Ethereum DeFi to the Telegram messenger and TON (The Open Network) ecosystem. It has received backing from prominent investors such as TON Ventures, Hack VC, Animoca Ventures, Symbolic Capital, and Spartan Group. Additionally, the token was listed on Binance Alpha for spot trading and on Binance Futures as a TAC/USDT perpetual contract with 50x leverage.

The sudden crash of the TAC token has been attributed to a collapse in market mechanics rather than a security breach. Market analysts believe that the shallow order-book liquidity of the token’s trading pairs made it vulnerable to large sell orders triggering drastic price swings.

According to DEX Screener, early airdrop recipients aggressively sold off their TAC tokens, leading to automatic stop-losses and liquidation of leveraged long positions. This selling pressure exacerbated the downward spiral of the token’s price.

The TAC community had already been on edge following an exploit on May 12 that resulted in the loss of $2.8 million from the TON-Ethereum bridging layer of the TAC Protocol. While the team managed to recover 90% of the stolen funds, the incident significantly impacted investor confidence in the project’s security framework.

At the time of the crash, the TAC Protocol had not issued any official statement regarding the event. The crypto community on Twitter highlighted the incident as a deterrent to retail adoption of cryptocurrencies, emphasizing the lack of accountability from exchanges and projects in such situations.

Lessons drawn from the crash included the importance of respecting liquidity on new listings and the potential negative impact of airdrops on token price stability in the short term.

In conclusion, the flash crash of the TAC token serves as a reminder of the volatility and risks associated with the cryptocurrency market. Investors are advised to conduct thorough research and exercise caution when trading or investing in digital assets.