The 70x leveraged God Market has collapsed, can the meme's Decentralized Finance IMF come back?

The "meme flywheel" on Ethereum suddenly collapsed.

Written by: Cookie, Rhythm

From early June to early July this year, $IMF, as a MemeFi project on the Ethereum mainnet, rose nearly 70 times. Although after hitting a historical high of $70 million in market value, $IMF gradually corrected by 50%, yesterday, a massive drop of nearly 85% caused a stir in the market.

$IMF's decline shocked Zhu Su

What exactly happened that caused such a huge decline in $IMF?

What is IMF?

IMF (International Meme Fund) is a decentralized financial platform tailored for the mainnet meme, allowing users to collateralize their meme coins such as $PEPE, $JOE, $MOG to borrow stablecoins $USDS without the need to sell to realize value. At the same time, through modules like Accelerate and Amplify, project parties or whales can also leverage to pump, conduct circular borrowing for protection, and even create a "lock-up" illusion, while actually achieving early exit and shadow fund management.

Through the IMF, the circular lending of meme coins can be achieved, realizing "stepping on the left foot with the right foot", for example:

· Buy 10,000 USD PEPE

· Deposit PEPE into IMF and borrow a loan of 5000 USDS.

· Exchange USDS for PEPE

· Deposit the remaining $5000 PEPE to lower the Loan-to-Value (LTV) ratio.

Currently, the TVL of IMF is still about $166.5 million, with a total of about $54 million of $USDS deposited, about $29.22 million of $PEPE, about $20.58 million of $stETH, about $44.4 million of $MOG, about $5.88 million of $JOE, about $4.94 million of $SPX, and about $7.5 million of $IMF as collateral.

Why did $IMF plummet?

According to a tweet released by the IMF official account, the sudden plunge of $IMF this time was not due to issues with the protocol itself, but rather because the $IMF token faced sell-offs, which triggered more panic selling and a chain of liquidations, leading to a significant drop in the price of $IMF.

The official also stated in the tweet that due to the speed and frequency of liquidations, some bad debts have accumulated (approximately 1% of the USDS deposited). This is lower than the total earnings generated by lenders, so there is no net loss. Additionally, the issues occurring in the $IMF lending market do 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 chain liquidation. He stated that his friend did not intend to sabotage the IMF project and suggested that the project team should close the IMF lending position, otherwise USDS would face huge risks. He also mentioned that the team's oracle update speed is very slow, and when most IMF/USDT positions are unable to repay, the oracle still has not updated to the latest price in a timely manner.

Regarding the collateral lending of IMF's own platform token $IMF, both @2025Spider and Chinese KOL "Professor Su" have raised doubts:

Someone asked @2025Spider in a tweet, "Is IMF a scam?" @2025Spider replied that the team members are good, but they should not open up collateral lending for $IMF, otherwise there would be reason to believe they want to cash out their own tokens by selling them in disguise like the founder of CRV. He also mentioned that the loan limit given to $IMF exceeds the $IMF UniSwap pool itself, which is also not advisable from a risk control perspective.

Professor Su said that it directly questions the IMF team's own collateral which triggered FOMO and then they sold the tokens to cash out, based on the records on the chain:

The IMF official Twitter account published a detailed report on the recent series of liquidations this afternoon. A total of 260 liquidations occurred, involving 126 independent borrowers, accounting for 15.47% of the total supply of $IMF that was liquidated.

Conclusion

After the event, $IMF rebounded nearly 4 times from its lowest point, and currently, it is still close to 3 times the price compared to the lowest point, with a market capitalization rising to nearly 21 million dollars.

However, the controversy surrounding $IMF is unlikely to end. On July 24, a large holder of the well-known meme coin $APU on Ethereum, @alex_eph612, fired shots at the IMF. He stated that the IMF is a conspiracy group initiated by $PEPE, $MOG, and Milady, and its business model is essentially to demand free tokens from other organic meme coin communities in exchange for the short-term buying power that the IMF can bring, after which the conspiracy group sells the tokens.

The IMF quickly responded, claiming that it did not solicit any bribes, and that the criteria for listing lending pairs are also public and voted on by $IMF holders:

The "meme flywheel" of Ethereum is likely to endure some storms.