Behind the Trove collapse: A premature experiment in turning collectibles into derivative products

Are collectibles truly ready for the derivatives market?

Trove was once considered a notable step forward in the financialization of collectibles.

It painted an imaginative future: Pokémon cards, CSGO skins, luxury watches, and other cultural assets—traditionally lacking liquidity and standardized pricing—would be indexed and leveraged, brought into perpetual derivatives markets, and transformed into tradable, hedgeable financial instruments.

However, with $TROVE’s official launch on January 20, the market quickly shattered this vision.

The token crashed immediately upon listing, plunging well below its offering price. Allegations of a “rug pull” and calls for community action surged. On Polymarket, a prediction market, bets even appeared on whether Trove’s founder would be arrested before March 31.

Attention rapidly shifted from price alone to a series of controversies surrounding the token’s issuance, prompting a broader reassessment of the project: Was Trove’s packaged product design truly grounded in practical reality?

This raises a fundamental question: Are collectibles genuinely ready for the derivatives market?

Immediate Crash After Listing: What Went Wrong with Trove?

Trove’s collapse and the evaporation of trust unfolded rapidly, accelerated by a series of dramatic events over less than a month.

On January 6, Trove launched its ICO with an FDV of roughly $20 million, ultimately raising $11.5 million—an oversubscription of about 4 to 5 times. Yet during the ICO, the team repeatedly altered fundraising rules, extending the timeline and changing allocation details, which fueled uncertainty around execution.

This uncertainty was mirrored in prediction markets. In the final stages of the ICO, Trove-related betting on Polymarket experienced sharp reversals. Results were nearly priced in before the original deadline, only to be overturned by last-minute changes from the team. Some on-chain addresses executed precise trades around official announcements, sparking further community suspicion.

The most dramatic shift occurred just before the TGE. Trove, long positioned as a Hyperliquid ecosystem integrator, abruptly abandoned its original plan and issued its token on Solana, upending market expectations.

Meanwhile, on-chain investigator ZachXBT questioned certain Trove-related fund flows. Several KOLs publicly disclosed high-value marketing offers, including discounted subscriptions and extra airdrop promises. The cluster of signals heightened concerns about the project’s transparency and governance.

Ultimately, on TGE day, January 20, $TROVE crashed at launch, with its price plummeting over 95%. Liquidity pools dried up rapidly, causing heavy losses for early participants. Trust was completely shattered, and accusations of “rug pull,” “scam,” and “false advertising” erupted around Trove.

At this point, the market began to reexamine the product Trove tried to build.

“Everything Can Be Perp”: Trove’s Product Blueprint

“Everything Can Be Perp” was Trove’s original slogan and product vision.

Its core positioning was clear: a Perp DEX for collectibles and RWAs. In this design, Pokémon cards, CSGO skins, luxury watches, and other non-standard, illiquid cultural and physical collectibles would no longer be passive assets waiting for buyers. Instead, they could be indexed and leveraged, brought into perpetual contract markets as tradable, hedgeable, and liquidatable financial instruments.

In essence, Trove aimed to use a pricing mechanism to convert collectibles into indexed price benchmarks, building perpetual contract trading on top of this, complete with corresponding liquidation and risk control systems.

From a narrative perspective, derivatives markets are among the most mature and liquid sectors in crypto, while on-chain RWA and non-standard asset pricing and liquidity remain long-standing challenges. Combining the two creates a compelling story.

However, supporting such a product logic requires several critical preconditions:

Is there a broadly accepted price consensus to support index calculation? How are data sources selected? How are prices updated in low-liquidity or zero-trade situations? How are abnormal trades and manipulation filtered? How do liquidation and risk controls function?

Trove’s narrative never concretely addressed these questions.

Why “Collectible Perp” Can’t Be Realized at This Stage

Trove wasn’t attempting a typical collectible trading platform, but a financial architecture combining “perpetual derivatives + indexed pricing.” This structure demands higher market standards for the underlying assets.

Perpetual derivatives markets fundamentally rely on a stable, continuously updated price system to support liquidation, margin, and risk management. This requires verifiable, continuously refreshed price sources. In mature crypto and traditional financial markets, assets like BTC or ETH rely on deep spot market liquidity and multiple exchange quotes to build price indexes. But for collectibles—even high-value Pokémon cards—trades are scattered across auctions, private deals, OTC, and specialized marketplaces. Prices are discrete, context-dependent, and non-continuous, making it difficult to map them directly into a structured financial index.

The same problem exists in NFT markets. Prices are often driven by sporadic trades and community consensus, leaving them vulnerable to low liquidity, wash trading, and short-term manipulation. Mapping such prices directly into index and liquidation systems doesn’t dilute risk—it amplifies it.

Trove proposed solving pricing through external market data and oracle mechanisms, but in reality, as of launch, no widely validated, mature price feed system existed to provide stable, trackable inputs for these assets.

As a result, Trove’s “collectible perp” blueprint remains, for now, a product concept lacking real-world support.

This set the stage for subsequent instability.

When Packaging Comes Before Answers, Risk Grows

Trove isn’t the only project to propose “indexing and financializing non-standard assets.”

Over the past year, some TCG RWA projects have discussed collectible indexes, showcased UI, and teased similar products on X, but none have delivered a fully operational solution.

The underlying market still lacks the real-world conditions to support such financial structures. Price consensus is discontinuous, liquidity is insufficient, data verification and risk controls are immature, and infrastructure is still in its infancy. Attempting this now is like trying to build a skyscraper without a foundation.

Trove’s issue was packaging an unrealizable product as “ready” and pushing it to market prematurely. As capital and sentiment entered, unanswered questions remained, ultimately undermining the system.

Trove’s actions, controversies, and eventual collapse only accelerated and magnified an already fragile premise.

From Gameplay to Structure: Practical Paths for Collectibles RWA

Currently, mainstream and mature collectible on-chain projects focus on NFT verification and ownership representation, rather than direct indexing and financialization.

From card-drawing platforms to collectible trading markets, the RWA sector has seen a diversity of product forms in recent years.

Platforms like Collector Crypt and Courtyard focus on card-drawing experiences and issuance efficiency, prioritizing trading activity and market liquidity. These applications lower participation barriers and speed up the on-chain circulation of physical collectibles.

As asset values climb and participant numbers grow, market expectations and demands evolve. Beyond trading, more users now care about the verifiability of underlying structures, process consistency, and the ongoing confirmation and traceability of key information.

Some teams have shifted their focus from application-layer experiences to foundational infrastructure. For example, Renaiss aims to build long-term infrastructure for physical collectibles. Its product focus is not just on card-drawing or trading, but on deeper issues like verifiable custody, asset state transparency, and traceable settlement systems. By treating verifiable asset states and process transparency as core features, maintaining founder transparency, hosting regular AMAs, and engaging with the community, it seeks to establish a trust structure that can be repeatedly validated before exploring further financialization.

As collectibles move toward higher-frequency, more financialized trading scenarios, the key to sustainable operations may lie in those seemingly “unsexy” foundational design elements.

Conclusion

The market for tokenized physical assets and collectibles is emerging, demand is growing, and the potential market size remains a topic of discussion.

According to RWA.xyz, the tokenized RWA market has grown 380% over the past three years, reaching nearly $30 billion. Some market institutions forecast that by 2034, the market could reach $30 trillion.

The closer we get to financialization, the more time is needed to build a solid foundation: price mechanisms, data sources, liquidity structures, verifiable custody, and settlement cannot be shortcut by a compelling narrative.

Building skyscrapers before laying the foundation only amplifies risk.

Perhaps in the future, as more participants join and infrastructure and market structures mature, collectible derivatives will find a viable form. For now, what’s needed isn’t faster packaging, but more time to strengthen the foundation, layer by layer.

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