CREAM Finance's CREAM Token Rallies 65% in 7 Days, Outperforming Bitcoin and Ethereum

CREAM, the native token of Cream Finance, a DeFi protocol, has taken the crypto market unaware as its price rallied by 65.25% in the last seven days.

CREAM Price Surges by 65% in 7 Days, Outperforming Crypto Market

The native token of DeFi protocol Cream Finance, CREAM, has surprised the crypto market with a 65.25% surge in price over the last seven days. This impressive rally occurred at a time when the prices of most major cryptocurrencies were either shrinking or consolidating.

At the time of writing, CREAM was trading at $72.25 with a market cap of $133.40 million. However, Cream Finance’s reach in the market seems limited considering that the crypto is not a part of the top 100.

For those unfamiliar, AMBCrypto explains what the project entails in this article.

What is Cream Finance?

Cream Finance is a part of the yearn.finance (YFI) ecosystem. However, Cream does not 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 and open-source network and works for users on the Binance Smart Chain, Ethereum, Polygon, and Fantom blockchains.

Not many know this but CREAM came to life after a hard fork of Compound Finance (COMP) in 2020. In the crypto world, a hard fork is a change to the protocol of a blockchain’s network.

When this happens, previous blocks become invalid as well as transactions. Furthermore, users and nodes upgrade to the latest version to remain compatible with the upgrade.

Sometimes, a hard fork comes with a new token. Sometimes, it does not. For Cream Finance the 2020 split brought about the development of the CREAM cryptocurrency.

With CREAM, users can stake, lend, and borrow assets on the network. However, the token is not the only asset that can be used on the network. Cryptos like COMP, ETH, YFI, some stablecoins, and a few other tokens can interact with Cream Finance.

‘This group’ is driving the price higher

As for the recent price increase, AMBCrypto noticed that Cream Finance did not announce any major developments. However, using IntoTheBlock’s data, we observed that there was an increase in the activity of whales.

Whales, in crypto terms, own a greater dollar amount of a cryptocurrency. Most times, the tokens held by this cohort represent 1% of the total circulating supply.

According to press time data, about 94.74% of CREAM holders are whales. Out of this group, 19.42% of them engaged in 1,362 transactions in the last 24 hours.

This number is considered high whale activity and is enough to move prices significantly. As such, it seemed the reason Cream Finance has outperformed other projects was because of high whale activity.

Confirmation of this increase appeared in the trading volume. As of this writing, CREAM’s volume has increased by 378.65% in the last 24 hours.

On the 19th of May, the volume surpassed $100 million according to Santiment’s data. With this volume, CREAM’s price was closed in on $75.

Moments later, the price decreased indicating that some holders of the token were booking profits. Though the volume had slightly fallen from this point, it might not be enough to force a double-digit correction.

If the volume continues to rise while the price increases, CREAM could drive another 15% increase that could take the price to $83.95.

However, a decline in volume could mean waning strength for the token. In this case, the price could fall to $53.59 which was another area of interest.

Is CREAM dependable?

Despite the mind-blowing price increase, the Total Value Locked (TVL) indicated a bearish signal. TVL is an indicator of a protocol’s health.

If the metric increases, it means that market participants are depositing assets into the ecosystem. When the TVL falls, it indicates a surge in withdrawals.

In this instance, it could mean that participants no longer trust the system to provide good yield. According to AMBCrypto’s analysis using DeFiLlama, Cream Finance’s TVL was more than $2 billion in 2021.

But after a Flash Loan attack in 2021, the metric has become a shadow of its former self. For context, a Flash Loan attack happens when attackers capitalize on a flaw in a protocol and take out uncollateralized loans from a lending protocol.

The attackers, in question, use this to manipulate the market while stealing assets owned by depositors. This ugly side of DeFi was what Cream Finance experienced such that its TVL was a little over $15 million at press time.

While the TVL might not