The 70x Rekt Meme Coin has crashed, can the DeFi IMF of memes make a comeback?

2025-07-31 19:26

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**The "Meme Coin Flywheel" on Ethereum Suddenly Collapses**

From early June to early July this year, $IMF, as part of the MemeFi project on the Ethereum mainnet, saw its price surge nearly 70x. Despite reaching a historic high market cap of $70 million, $IMF gradually retraced by 50%. However, yesterday, a massive drop of nearly 85% shook the market.

The Plunge of $IMF Shocks Zhu Su

What exactly happened to trigger such a significant drop in $IMF?

What is IMF?

IMF (International Meme Fund) is a decentralized finance platform tailored for meme coins on the mainnet, allowing users to collateralize meme coins like $PEPE, $JOE, $MOG to borrow the stablecoin $USDS, enabling them to cash out without selling. Through modules such as Accelerate and Amplify, project teams or whales can leverage up, manipulate the market through recursive borrowing and lending to protect positions, and even create an illusion of "lockup," all the while executing front-running and shadow fund management.

IMF enables the circular borrowing and lending of meme coins, allowing for a "left hand holds right hand" strategy, for example:

· Buy $10,000 worth of PEPE

· Deposit PEPE into IMF and borrow a $5,000 USDS loan

· Swap USDS back into PEPE

· Deposit the remaining $5,000 worth of PEPE to lower the loan-to-value ratio (LTV)

Currently, IMF has a total value locked (TVL) of approximately $166.5 million, with around $54 million in $USDS deposits, approximately $29.22 million in $PEPE, around $20.58 million in $stETH, roughly $44.4 million in $MOG, about $5.88 million in $JOE, approximately $4.94 million in $SPX, and roughly $7.5 million in $IMF as collateral.

Why Did $IMF Experience a Sharp Decline?

According to a tweet from the IMF official account, the sudden plunge in $IMF was not due to issues with the protocol itself but rather because the $IMF token itself faced significant sell pressure, triggering more panic selling and cascading liquidations that led to a steep price drop.

The official statement also mentioned in a tweet that due to the speed and frequency of settlements, some bad debts had accumulated (amounting to approximately 1% of the USDS deposits). This was lower than the total revenue generated by the lenders, so there was no net loss. Furthermore, the issues in the $IMF borrowing market did not affect other lending pairs on the platform.

@2025Spider tweeted that his friend sold $IMF worth $100,000 at a price of 1.02U, triggering a cascading liquidation. He mentioned that his friend had no intention of harming the IMF project and suggested that the project team should close the IMF borrowing positions, otherwise USDS would face significant risks. He also commented on the team's oracle update speed being slow, as when most IMF/USDT positions were already unable to repay, the oracle had not updated to the latest price.

Regarding the IMF opening its platform token $IMF for collateralized borrowing, both @2025Spider and the Chinese KOL "Professor Suo" raised concerns:

Someone asked under @2025Spider's tweet, "Is IMF a scam?" @2025Spider mentioned that the team members are good, but opening collateralized borrowing for $IMF should not have been done. Otherwise, there is reason to believe that they intended to cash out their own tokens in a manner similar to the CRV founder. He also noted that the loan amount given to $IMF exceeded the UniSwap pool of $IMF itself, which from a risk management perspective should not have happened.

"Professor Suo" directly questioned the IMF team's self-collateralization leading to FOMO and then selling tokens for cash out based on on-chain records:

The IMF official account published a detailed report of the recent cascading liquidation event this afternoon. A total of 260 liquidations occurred, involving 126 individual borrowers, with 15.47% of the $IMF total supply being liquidated.

Conclusion

After the incident, $IMF rebounded nearly 4 times from the low point, and currently, it is still priced nearly 3 times higher than the low point, with a market cap of close to $21 million.

However, the controversy surrounding $IMF is unlikely to end. On July 24, prominent holder of the Ethereum-based meme coin $APU, @alex_eph612, took aim at IMF. He stated that IMF was initiated by a cabal of $PEPE, $MOG, and Milady, and their business model actually involved soliciting free tokens from other organic meme coin communities in exchange for the short-term buy pressure brought by IMF, after which the cabal would sell off the tokens:

IMF quickly responded to this, claiming that they did not solicit any bribes, and the standards for listing on lending platforms were open and subject to a vote by $IMF holders: