Dropping of price sharply is never new thing to us in this space, it happens most of the time when team or investor remove their Liquidity leaving others without liquidity.
Most of the time, these DeFi are not well audited as they claimed. It has made many loose their money especially ones that are always been greedy. The recent attack on Cover protocol comes to my mind, it dump almost 99% with an excess coin in supply.
There are other that has happened in the past such as kimchi, yam, sushi was deliberately dumped by the team but it later survived due to some influence and interest on the platform.
Always proceed with caution on this DeFi, cool money can be made here and at the same time can be lost, if not all