- CREAM trading volume increased by 378.65% in 24 hours, pushing the price close to $75.
- Almost all cryptocurrency holders are whales, but TVL Cream Finance is stunning.
CREAM, the native token of Cream Finance, a DeFi protocol, has taken the crypto market unawares as its price has increased by 65.25% in the last seven days. This increase came at a time when the prices of most cryptocurrencies were either falling or consolidating.
At press time, CREAM was priced at $72.25 with a market cap of $133.40 million. However, Cream Finance’s market reach seems to be limited given that the cryptocurrency is not part of the top 100.
For those unfamiliar, AMBCrypto explains what the project entails in this article.
What is Cream Finance?
Cream Finance is part of yearn.finance [YFI] ecosystem. However, Cream doesn’t just work as a lending protocol for individuals. Instead, it also allows institutions and other protocols to access liquidity on its network.
Cream Finance is a permissionless open source network and operates for users on the Binance Smart Chain, Ethereum, Polygon and Fantom blockchains.
Few people know it, but CREAM came to life after the hard fork of Compound Finance [COMP] in 2020. In crypto, a hard fork is a change to the blockchain network protocol.
When this happens, the previous blocks become invalid, as do the transactions. In addition, users and nodes upgrade to the latest version to remain compatible with the update.
Sometimes a hard fork comes with a new token. Sometimes it isn’t. For Cream Finance, the split of 2020 brought the development of the CREAM cryptocurrency.
With CREAM, users can deposit, borrow and lend assets on the network. However, the token is not the only asset that can be used on the network. Crypto like COMP, ETH, YFI, some stablecoins and several other tokens can communicate with Cream Finance.
“This group” drives the price up
According to the recent price increase, AMBCrypto noticed that Cream Finance did not announce any major developments. However, using IntoTheBlock data, we observed an increase in whale activity.
Whales own a larger dollar amount of cryptocurrency. Tokens held by this cohort mostly represent 1% of the total circulating supply.
According to press time data, about 94.74% of CREAM holders are whales. Of this group, 19.42% of them made 1,362 transactions in the last 24 hours.
Source: IntoTheBlock
This number is considered high whale activity and is enough to cause significant price movement. The reason Cream Finance outperformed other projects seemed to be due to high whale activity.
Confirmation of this increase appeared in the volume of trades. At the time of writing, CREAM volume has increased by 378.65% in the last 24 hours.
On May 19, the volume exceeded $100 million, according to Santiment. With this volume, the price of CREAM closed at $75.
Moments later, the price dropped, indicating that some token holders booked profits. Although volume has declined slightly since that point, it may not be enough to force a double-digit correction.
Source: Santiment
If volume continues to grow while the price rises, CREAM could cause another 15% rally that could push the price to $83.95.
However, a drop in volume could mean the token’s strength is waning. In this case, the price could drop to $53.59, which was another area of ​​interest.
Is CREAM reliable?
Despite the stunning price increase, Total Value Locked (TVL) indicated a bearish signal. TVL is a protocol health indicator.
If the metric increases, it means that market participants are depositing assets into the ecosystem. When the TVL goes down, it means an increase in withdrawals.
In this case, it could mean that participants no longer trust the system to provide a good return. According to AMBCrypto analysis by DeFiLlam, TVL Cream Finance was more than $2 billion in 2021.
Source: DeFiLlama
But after the 2021 Flash Loan attack, this metric became a shadow of its former self. For context, a Flash Loan attack occurs when it exploits a flaw in the protocol and takes unsecured loans from the loan protocol.
Realistic or not, here is CREAM’s market cap in ETH terms
The attackers in question use this to manipulate the market and steal assets owned by depositors. This ugly side of DeFi has been experienced by Cream Finance, making its TVL just over $15 million at press time.
While TVL does not necessarily affect the price of a cryptocurrency, it serves as a sign that users are being careful when interacting with the protocol.