- TITAN drops to near zero from Wednesday’s high.
- Whales started to sell TITAN tokens which flooded in excess coins in the market.
- As TITAN began to fall precipitously, so did the pegged value of IRON.
The Iron Titanium token (TITAN), the share token of once-multibillion-dollar decentralized finance (DeFi) protocol, has dropped to near zero. The token was last seen trading for around $0.000000035, down from a high of $65. The project has come to a halt as a result of the rapid fallout.
TITAN is owned by Iron Finance, it began bridging to Polygon’s chain on May 18 in order to benefit from Polygon’s performance and low transaction fees.
Moreover, in recent times the billionaire Mark Cuban has shown interest in investing in NFT’s. Besides, people on the Reddit platform found the billionaire investor Cuban’s interest in DeFi which has worsened the problem. The article claims that he is the sole provider of TITAN/Dai on the Polygon chain for 75k.
The project intended to launch IRON, which is a partially securitized stablecoin. Besides, a stablecoin is a cryptocurrency that has its value tied up with government-issued currency to keep it “stable”.
IRON Became Unstable As TITAN Falls
Significantly, this stablecoin IRON is made up of Circle and Coinbase stablecoins and TITAN, and it is pegged to $1. Moreover, with this Defi project’s tokenomics work, when IRON stablecoins slews, the price of TITAN drops.
Consequently, when the price of TITAN falls then the peg becomes unstable as on Wednesday. Fred Schebesta, founder of Finder.com.au and Iron Finance investor states:
“TITAN’s price rose to $65 before falling back to $60. This resulted in a significant de-pegging of IRON.”
Schebesta also expresses that this caused whales to start selling TITAN. When whales started to sell TITAN tokens, it flooded with excess tokens in the market. This also resulted in a bank run, it occurs only when many people try to withdraw money at the same time.
As TITAN began to fall precipitously, so did the pegged value of IRON. The value of IRON fell further as a result of whale dumps. The stablecoin’s mechanism kicked in, issuing new TITAN and removing liquidity in an attempt to stabilize IRON at $1.
This created the price difference between IRON and TITAN, which flooded the market with more TITAN tokens, adding additional sell pressure and further weakening IRON’s price.
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