The Titanium Token (TITAN) of the DeFi protocol Iron Finance fell from over 60 USD to 0 USD within a very short time. Users are now required to withdraw their deposits from the liquidity pools.
Another horrific news makes clear the dangers that await careless investors in the Wild West of decentralized finance (DeFi). This time it hit the DeFi project Iron Finance. With IRON, Iron Finance offers a stablecoin for the Binance Smart Chain (BSC) and Polygon. In contrast to centralized stablecoins such as USDC, however, IRON is not backed 1: 1 by fiat money. Instead, IRON relies on a dual token system, consisting of the stablecoin USDC and a volatile token, which is called STEEL on BSC and Titanium (TITAN) in Polygon. USDC, which stores the log as collateral, will be invested up to 75 percent in various DeFi liquidity pools, while the remaining 25 percent will be kept from the log to service the redemption of IRON tokens into USDC.
For reasons that have not yet been clarified, the TITAN exchange rate collapsed on the night of June 17th. TITAN fell from 65 USD to almost 0 USD (0.000008225 USD) in just a few hours, making it practically worthless. On Twitter, the Iron Finance team spoke of a “bank run” and announced that the incident would be dealt with. Many TITAN holders assume that the project is a “rug pull”, that is, the misappropriation of user assets by the project management. Iron Finance rejects such allegations on the project homepage.
After that there was neither a hack nor an inside job, it says there. Cheated Hodler: inside this should hardly be reassuring, after all, only two options remain open: Either the tokenomics from Iron.Finance are anything but mature, or a faulty smart contract was – despite the audit – responsible for the crash. It is at least noticeable that the protocol happily printed fresh tokens instead of the targeted maximum amount of one billion TITAN in circulation. According to Coingecko there are a stupid 27.8 trillion TITAN in circulation.
Mark Cuban also gambled away with TITAN
The prominent US investor Mark Cuban is also affected by the TITAN crash. On Sunday, Cuban raved about the “brilliance” of yield farming and liquidity mining, two central application examples of DeFi. On his Blog Cuban chatted from the closet: He is a small liquidity provider for the DAI / TITAN exchange pair at DEX QuickSwap.
Apparently, however, Cuban got away with a black eye.
I was hit like everyone else. The crazy thing is, I made it out, thought they were going to raise their TVL enough. Then Bam,
explains Cuban via Tweet.
The clarification of the incident by Iron.Finance is still a long time coming at the time of going to press.