- Iron Finance’s Titan token collapsed from $65 to $0 after a panic-induced bank run.
- The tokenomics of TITAN appears to have exacerbated the situation, leading to this massive plummet.
- Billionaire Mark Cuban is among the affected individuals of this mishap.
The fallout of TITAN token tracks back to Iron Finance and its multi-chain, partially collateralized stablecoin – IRON. While the mishap cost investors millions of dollars, the team has yet to comment on what transpired.
TITAN rides to zero
The IRON stablecoin requires 25% TITAN and 75% USDC backing it to maintain its peg. Users can mint it by locking in 1:3 TITAN:USDC tokens. Due to this structure, the assets backing it and bag holders have high demand.
Owing to the increasing demand from minting more IRON, the TITAN price rose from $8.65 to $64 between June 10 and June 16.
The initial sell-off pushed the token to $38 and even recovered to $50, but the bank run compounded when whales continued selling. This burst in selling pressure overwhelmed the buyers and pushed the market value of TITAN to zero.
This interconnectedness of the tokens combined with the massive bag holders sparked the initial sell-off, which in turn triggered a chain reaction, pushing TITAN to zero.
TITAN/USD price chart
Due to TITAN’s dramatic drop in market value, the stablecoin IRON’s peg went from $0.99 to $0.69 by early June 17. At the time of writing, IRON stands at $0.67.
IRON price chart
The abrupt bank run from TITAN holders has also negatively impacted Iron Finance’s total value locked (TVL), which hit $2 billion just two days ago. Currently, the TVL hovers at $256 million.
A Twitter user who goes by the screen name “AlgodTrading” posted a few days ago that they acquired $130,000 worth of IRON.
The user tweeted,
Btw to everyone asking yes i’m fine, losing nearly 100k sucks but is cost of doing business. If it wasn’t for the exploit it would have repegged imo
Thanks for asking tho ❤️
— AlgodTrading (@AlgodTrading) June 17, 2021
Some users argue that the sell-off intensified due to Cuban’s involvement. In a blog posted on June 13, the billionaire, Mark Cuban noted,
I’m a small LP for QuickSwap. I provide 2 different tokens (DAI/TITAN) that enable QuikSwap to offer swaps between these two tokens
After today’s collapse, Cuban tweeted:
I got hit like everyone else. Crazy part is I got out, thought they were increasing their TVL enough. Than [sic] Bam.
Regarding this mishap, the Iron Finance website has announced that this was not a hack, exploit or rug pull.
The project currently offers redemptions in USDC but with a 12-hour lockup feature before execution.