Bitcoin News and Finance Iron Finance Token Slides From $64 to Near Zero Following ‘Large-Scale Crypto Bank Run’ Skip to main content

Iron Finance Token Slides From $64 to Near Zero Following ‘Large-Scale Crypto Bank Run’

Iron Finance Token Slides From $64 to Near Zero Following 'Large-Scale Crypto Bank Run'

The Iron Titanium token (TITAN) value has quaked a great deal after the project suffered from what the team called “the world’s first large-scale crypto bank run.” After touching a high of $64 per token on Wednesday, the project slid to near zero and remained worthless on Thursday afternoon.

Iron Finance Claims Project Suffered from a ‘Bank Run’

The world of decentralized finance (defi) is exciting but it also comes with major risks stemming from smart contract exploits, flash loans, and alleged bank runs. That was the case for the Iron Finance project, as the team’s native token lost all of its value in a matter of hours. On Wednesday, the Iron Finance team explained what happened on Twitter and then followed up with a post mortem on Thursday.

“Dear community, please withdraw liquidity from all pools. We will share a post-mortem as soon as we have a better understanding of this bank run,” the official Twitter account noted on Wednesday. “USDC collateral is available for redemption as normal,” the Twitter account added.

Of course, the Iron Finance protocol team was criticized immediately after the tweet and people were not pleased with the situation. Iron Finance’s post mortem the following day explains how the project suffered. “We never thought it would happen, but it just did. We just experienced the world’s first large-scale crypto bank run,” the blog post says.

“Around 10am UTC on 16-June-2021, we noticed some whales began to remove liquidity from IRON/USDC, then sold TITAN to IRON and then IRON to USDC directly to liquidity pools instead of redeeming IRON, which caused the IRON price off-peg. TITAN dropped from 65$ to 30$ in 2 hours, which later recovered in 1 hour to 52$ and IRON fully recovered its peg,” the post mortem adds.

Following the recovery, the Iron Finance team noticed a few hours later that a “few big holders started selling again.” The Iron Finance project members said “a lot of users panicked” and the entire situation caused a “negative feedback loop.”

Iron Finance Token Slides From $64 to Near Zero Following 'Large-Scale Crypto Bank Run'
TITAN/USD chart.

“At some points, the price of TITAN became so low, close to 0 actually, which caused the redeem contract to revert the redeem transactions. We already queued the fix for this, so people can redeem again at 5pm UTC,” the team noted. The Iron Titanium project members added:

What we just experienced is the worst thing that could happen to the protocol, a historical bank run in the modern high-tech crypto space. Remember that Iron.finance is a partially collateralized stablecoin, which is similar to the fractional reserve banking of the modern world. When people panic and run over to the bank to withdraw their money in a short period, the bank may and will collapse.

A Number of Iron Finance Investors Lose Big

Commentary is littered all over Twitter and Reddit forums about the bank run, as it seems a lot of Iron Finance project investors lost money, according to a myriad of testimonies.

“My school fees [are] gone,” one individual tweeted on Wednesday. “I had $3,000 there and I’m left with $0.50. What is left for me to withdraw??!!! This isn’t fair! Whoever caused this should be found punished…… What am I going to do now?” the individual added.

“I lost all my Matic from pool Matic/TItan,” another person tweeted.

Others were not so sympathetic toward the investors who lost money, as a number of people repeated the age-old adage about investing only what you can afford to lose. One specific tweet response to the Iron Finance token thread said:

First rule of investing (especially in defi): don’t put in what you can’t lose. You really have no one to blame but yourself.

As far as the Iron Finance project team is concerned, the maintainers say they have “learned a great deal from this incident and while nothing could be fixed in the current system, we will continue our journey with more products in the future.”

Currently, the team plans to conduct an “in-depth analysis of the protocol” in order to grasp what happened during this unusual event. The post mortem also contains a quote from an Iron Finance investor and the founder of Finder.com.au, Fred Schebesta.

“There was no rug pull or exploits,” said Schebesta. “What happened is just the worst thing that could possibly happen considering their tokenomics,” the Iron Finance blog post concludes.

What do you think about the Iron Finance bank run? Let us know what you think about this subject in the comments section below.

Comments

Popular posts from this blog

Custodial Lightning Network Service Attack Discovered by LN ‘Newbie’ — Hacker Strikes 6 LN Custodians

On September 18, a Redditor posted to the r/bitcoin forum and explained how he discovered a way to “attack [the] lightning Network’s custodial services.” The Reddit account dubbed “Reckless Satoshi” wanted to figure out if a “discrepancy between real routing fees and service’s transaction fee can be exploited for a profit.” The researcher disclosed that he wanted to see how large the damage could be and said “it is bad.” 6 Lightning Network Custodial Services Attacked, Researcher Discloses Findings to Offenders Prior to Public Disclosure A Redditor called Reckless Satoshi published a disclosure post on r/bitcoin this past Saturday and disclosed how he had found a vulnerability with routing fees and some of the Lightning Network’s custodial services. The research attack was done in good faith and after it was complete he disclosed the bugs to the offending services before publishing his findings. Reckless Satoshi used the Lightning Network (LN) attack on six different services incl...

Axie Infinity Down 40% Since Last Week’s Price High, Protocol Revenue Outshines Competitors

Last week, the game token leveraged within the Axie Infinity gaming universe skyrocketed to all-time highs, while other crypto markets remained extremely lackluster. During the last seven days, Axie Infinity’s platform token has dropped significantly in value shedding more than 12%. Meanwhile, the game platform’s smooth love potion token has slid over 8% over the last 24 hours. Axie Infinity Down More Than 40% Since All-Time High Not too long ago, the axie infinity (AXS) token was a topical conversation because it reached an all-time high on July 15. At the time, AXS managed to capture $28.93 per unit and since then it has shed 12.8% during the last seven days. The axie infinity (AXS) token is used within the blockchain-based game that involves battles between token-based creatures called “Axies.” AXS is used for the game’s governance system as well as other actions within the game. At the time of writing axie infinity (AXS) is exchanging hands for $16.70 per coin. AXS/USD on Ju...

Play-to-Earn Game From Polker (PKR) Exchange Listing – Endorsed by Akon

The Play-to-Earn NFT based Polker.Game ‘s native token $PKR has been officially listed on the popular centralized exchange BitMart. Polker.game has been in the spotlight recently as Akon, the American R&B superstar and record producer gave his official endorsement of polker stating that the “game is revolutionary” and that Polker is “hands down.. the best play to earn, NFT game in the space.”. With the BitMart listing and celebrity endorsement from Akon, Polker is perfectly positioned to become a major player in the Play-to-Earn league. Watch Akon’s Video Here What is Play-to-Earn? Although not a new concept, play-to-earn has become a trending term due to the popularity of the NFT game AXIE infinity. In the past, previous play-to-earn games have also achieved success – however, thanks to the huge amount of development in the blockchain space in recent years the gaming experience is now massively improved. Play-to-Earn games are essentially free to play and open to anyone and...

China to Crack Down on Copyright Infringement Through NFTs

Authorities in China are going after creators of digital collectibles based on other people’s works of art, the use of which was not authorized. The government offensive is part of a campaign to combat online copyright infringement and piracy with the participation of several departments. Regulators in China Move to Strengthen Copyright Supervision of Online Platforms The National Copyright Administration of China (NCAC) has recently launched a campaign against copyright infringement and piracy on the internet, together with the Ministry of Industry and Information Technology, the Ministry of Public Security, and the State Internet Information Office of the People’s Republic. A major objective of the initiative is to improve copyright supervision of online businesses by investigating cases involving the sale and distribution of infringing products on short video, live broadcast and e-commerce platforms, and promptly dealing with infringing content, the agency announced in a press r...
Blogarama - Blog Directory