Novastro Token Launch Sparks Rug Pull Allegations

October 30, 2025 – The Novastro token launch has ignited heated debate across the crypto community. Once hailed as a breakthrough in real-world asset (RWA) tokenization, the project’s debut of its native token, $XNL, has instead drawn accusations of a “rug pull” following sharp price declines and liquidity issues. Founder Shreedhar Shreenivasa insists the sell-off is temporary, citing buybacks and renewed focus on long-term development.

Novastro Token Launch and Project Overview

The Novastro token launch introduced $XNL as part of the project’s mission to bridge real-world assets with blockchain through a modular, AI-enhanced ecosystem. Novastro operates as a hybrid Layer 2/3 platform secured by Ethereum, with scalability across Arbitrum, Solana, and Sui.

Its architecture blends AI-driven asset management, automated SPVs (Special Purpose Vehicles), and Digital Twin Containers (DTCs) for decentralized applications. The company’s stated vision “RWA On-Chain Without Limits” targets seamless tokenization of assets such as real estate, commodities, and equities.

Supported by investors including Woodstock Fund, Double Peak, and CSP DAO, Novastro raised $1.2 million in its seed round. However, transparency concerns emerged as trading began and market activity spiked.

Market Fallout and Rug Pull Allegations

Shortly after the Novastro token launch, $XNL crashed from $0.05 to roughly $0.013, wiping out more than 70% of initial value. On-chain analysis revealed that several wallets sold large allocations within hours around 15.5 million tokens, or 8% of supply fueling accusations of insider dumping.

Community reports claimed the top ten wallets held 75% of total supply and that exchange liquidity was “near zero.” Posts on X described the event as “a soft rug,” pointing to identical gas patterns and wash-trade-like activity.

Critics also flagged Novastro’s choice to unlock 100% of public sale tokens at TGE, arguing it set the stage for volatility. Others referenced two prior troubled launches on the same launchpad, raising questions about due diligence.

Founder Responds and Outlines Recovery Steps

Addressing the controversy, founder Shreedhar Shreenivasa denied all rug pull claims. He attributed the crash to unlocked public sale tokens being sold before liquidity pools were fully established. “The first 24 hours after TGE are always challenging. The market has settled, and we’re focused on building,” he stated.

He confirmed a 2% buyback of circulating supply between $0.01 and $0.02 and hinted at upcoming Tier-1 partnerships to rebuild momentum. The next token unlock is six months away, which Shreenivasa says will “stabilize selling pressure.”

He also pledged to share on-chain data and market-maker reports publicly, adding, “All presale investors and partners are identifiable; there is no hidden dump.”

Future Outlook for the $XNL Ecosystem

Despite the fallout, Shreenivasa reaffirmed Novastro’s roadmap, prioritizing buybacks, liquidity partnerships, and expanded RWA integrations. He also announced plans for on-chain governance to improve transparency and community oversight.

At present, $XNL trades around $0.012, down from its $0.05 launch price. Analysts say sustained recovery will depend on consistent updates, verifiable liquidity, and clearer token-holder disclosures.

The Novastro story highlights the fragile balance between innovation and accountability in crypto markets, where enthusiasm can rapidly turn into skepticism.

The Talk

Real voices. Real reactions.

KOLsMediaCommunity

LOW

@shreedharshetty bro…. stop the cap this wasn’t your normal sell pressure

"The first 24 hours after TGE are always challenging. Public launchpad sale tokens were fully unlocked, and a few traders moved early before full liquidity was live, that created short-term sell pressure. That phase is behind us now, the market has settled, and we’re focused"— @

Bolt⚡️

@BoltXBT

1 day ago

LOW

@shreedharshetty Say about this first https://t.co/zCfXhbnQZj

"I just found coordinated selling in Novastro $XNL 🚨 Here’s what’s happening: The token launched on October 29 and immediately crashed -75.4% from $0.0344 to $0.0132 trading 44% below its IDO price ($0.05) Despite raising $4.7M in an oversubscribed IDO (235%) Onchain data https://t.co/SHjAUFQgC5"— @

Mr.Zeus

@CryptoZ46600

1 day ago

LOW

@shreedharshetty Are you kidding me??? You sold it to us at 0.05. You dumped all the tokens without even adding liquidity.

"The first 24 hours after TGE are always challenging. Public launchpad sale tokens were fully unlocked, and a few traders moved early before full liquidity was live, that created short-term sell pressure. That phase is behind us now, the market has settled, and we’re focused"— @

Bilgi Kripto

@BilgiKripto1

1 day ago

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