The DeFi market is a wild west where the unexpected can happen at any time. Holders of the TITAN token developed by the Iron Finance team learned this the hard way when its price abruptly fell to zero. While massive price crashes are nothing new in the sector, the event generated a lot of buzz because one of the people that was affected was billionaire investor Mark Cuban.
Mark Cuban announced investing in the project on June 13
According to the update, Mark Cuban’s wallet was one of those involved in the loss as the value of the coin fell flat to zero. After the price fell, the developers of the token, Iron Finance, announced that those who hold the token should liquidate their assets from their respective pools. Even though the protocol made this announcement in due time, it did not shed light on what exactly happened.
Before the “rug pull” happened, Mark Cuban was one of the entities providing liquidity of fellow decentralized finance protocol, QuickSwap. In a tweet dated June 13, the billionaire announced his involvement with the protocol. He mentioned that being involved in crypto-related businesses makes more sense than people think and that valuing tokens was easier than people portray it to be.
Iron Finance are the developers of two tokens, IRON and TITAN. IRON is a token that’s backed by two crypto assets – USDC and TITAN. In theory, holders of 1 IRON can exchange the token for $0.75 worth of USDC and $0.25 worth of TITAN.
According to Finance Geek on Twitter, the reason the price of the token dipped was that the number of people minting IRON was not high enough. This, in turn, hurt the number of TITAN token that was getting burnt.
And when the price of the asset started to undergo a bearish run, traders began to sell off their tokens instead of holding. Holders of IRON were given their rewards in TITAN tokens which the success of the move seeing the price of TITAN top well over $60. While the traders enjoyed the rewards for a short time, analysts have mentioned that the relationship between the two tokens was not balanced enough.
When asked if he thinks the recent slump is a rug pull, Cuban was quick to point out that he was hit just like everyone involved in the project. He mentioned that he had the chance to get out at a point even though the project’s TVL kept increasing before the price crash happened.
Andrew is a writer that does most of his work on cryptocurrency-related topics. While he’s primarily interested in Bitcoin, he also follows major altcoins and the innovative ideas that new cryptocurrency and blockchain projects are bringing to the table.