Altcoins Talks - Cryptocurrency Forum
Cryptocurrency Ecosystem => DeFi tokens => Topic started by: EAA-ALLAH on June 18, 2021, 07:14:43 PM
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There was no exploit or malicious activity, from the reports received until now. Simply, a bank run, where people kept cashing out and the token price kept falling. The way it works with Iron Finance is that there are two tokens – IRON and TITAN. The USDC is deposited into the protocol upon user’s minting IRON token, while the TITAN token used for minting is burned. When the user redeems, the USDC is paid back and TITAN are minted back. However, it turned out to be the race to the exits as people kept dumping their fractional reserve type TITAN tokens, after redeeming their initial collateral. This caused a domino effect as more and more players chose to exit the game and the price plummet severely in a matter of hours. The reason? TITAN marketcap wasn’t large enough to support such a market, also the token was overpriced had relatively constrained liquidity and there was no locking period like FRAX, to prevent a bull run.Source (https://cryptonews.net/819153/?utm_source=CryptoNews&utm_medium=app&utm_campaign=shared)