Tuesday, October 26, 2021
DeFi Mark Cuban DeFi: Iron Finance Crashed 100%

Mark Cuban DeFi: Iron Finance Crashed 100%

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Here’s a chart you never want to see. It’s of the DeFi Titanium token, which in one day went from being valued around $60 to $0. Even in the world of crypto, where massive drawdowns are commonplace, 100% washouts are pretty rare, especially in such short a time.

https://app.slingshot.finance/trade/m/TITAN/USDC

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The token is/was part of an algorithmic stablecoin project called Iron Finance. Stablecoins are pretty hot these days. Some (like USDT and USDC) maintain a peg to the dollar by holding a basket of dollar-denominated assets. Others (like Dai) are backed by overcollateralized crypto assets. And then there’s this breed of so-called algorithmic stablecoins, which use a dual-currency structure and attempt to hold a peg by creating arbitrage opportunities between coins. See Frances Coppola’s walkthrough of how the stability mechanism was designed to work. Also for more on the technical aspects, you can check out the description of another stablecoin project called Frax, from which Iron Finance was a fork.

This crash actually continues a very long line of algorithmic stablecoin projects that have crashed and burned, as nobody seems to have figured out how to nail it. The repeat failure of these projects is a meme on crypto twitter.



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