Fashionable billionaire investor, Mark Cuban who is a big supporter of the cryptocurrency market, particularly Decentralized Finance (DeFi), has referred to as for decentralized finance (DeFi) and stablecoin regulation after shedding cash on his funding in Titan token which crashed from an all-time excessive of 52$ to $0.
Though the cryptocurrency market is used to important ranges of volatility, this huge crash of 100% is fairly uncommon, particularly in such brief a time.
What occurred to Titan token?
As earlier reported by Nairametrics, Titan token is a part of an algorithmic stablecoin mission referred to as Iron Finance. Some stablecoin like USDT and USDC are pegged to the greenback by holding a basket of dollar-denominated belongings, Titan token is a hybrid of algorithmic stablecoins, which use a dual-currency construction in an try to carry a peg by creating arbitrage alternatives between cash.
The token crashed as a result of it had develop into overpriced and folks started to promote, thereby triggering a excessive quantity of volatility, overwhelming arbitrage alternatives and inflicting everybody to run to the door. Many feedback on social media appear to imagine that Mark Cuban had a hand within the downfall of the token.
Mark Cuban has been an enormous supporter and investor within the DeFi area. He wrote a weblog through which he expressed his assist for DeFi on Sunday. He said, “I’m going to make this as easy and easy an evidence as I can. Yield Farming by way of Staking and Liquidity Offering are a core characteristic of most, if not all Decentralized Finance (DeFi) tasks. The precept behind why they’re sensible additionally applies to different crypto tasks, however let’s put that apart. However first, let me say that this isn’t funding recommendation. That is how I see the market and there could also be issues that I’m flawed about or might change by the point you learn this. Be at liberty so as to add your ideas within the feedback beneath.”
He went additional within the weblog by itemizing Polygon, DAI, Titan and BNT as some cryptocurrencies through which he has invested.
After the meltdown of Titan token, Mark Cuban took to Twitter to say that he acquired “hit like everybody else.”
Bloomberg reached out to Mark Cuban to ask extra about how a lot he misplaced and the way he acquired interested by TITAN within the first place. He responded by way of e-mail stating,
“I examine it. Determined to strive it. Bought out. Then acquired again in when the TVL begin to rise again up as a share of my crypto portfolio it was small. Nevertheless it was sufficient that I wasn’t glad about it. However in a bigger context it’s no completely different than the dangers I take [in] angel investing. In any new business, there are dangers I tackle with the aim of not simply making an attempt to generate income but additionally to study.
Although I acquired rugged on this, it’s actually on me for being lazy. The factor about de fi performs like that is that it’s all about income and math and I used to be too lazy to do the mathematics to find out what the important thing metrics had been. The funding wasn’t so huge that I felt the necessity to must dot each I and cross each T. I took a flyer and misplaced. However in case you are on the lookout for a lesson realized, the true query is the regulatory one. There can be loads of gamers making an attempt to ascertain steady cash on each new l1 and L2. It may be a really profitable charge and arb enterprise for the winners.
There ought to be regulation to outline what a steady coin is and what collateralization is suitable. Ought to we require $1 in us forex for each greenback or outline acceptable collateralization choices, like us treasuries or? To have the ability to name itself a steady coin? The place collateralization will not be 1 to 1, ought to the mathematics of the dangers must be clearly outlined for all customers and accepted earlier than launch? Most likely given steady cash most probably must get to lots of of thousands and thousands or extra in worth with the intention to be helpful, they need to must register.”