![]() How Did The TITAN Token Collapse Happen? ‘Cryptocurrency’s First Large-Scale Bank Run’ On the other hand, when the price of TITAN falls drastically like what happened on Wednesday, the peg becomes less stable. When new IRON tokens are minted, there will be a corresponding increase in demand for TITAN tokens which will drive up the price. ![]() This collateralisation ratio for IRON/USDC/TITAN is a floating number that is managed algorithmically to maintain the float.Īll in all, this means that there is a direct correlation between the value of TITAN and the circulating supply of IRON. On the flip side, when a user redeems IRON tokens, the protocol pays the user back in either USDC/BUSD and mints the required amount of TITAN/STEEL tokens to give to the user.Īlso, the ratio of mining and redeeming of USDC/BUSD or TITAN/STEEL tokens is based on a Target Collateral Ratio and by the Effective Collateral Ratio set by Iron Finance.At the same time, the TITAN/STEEL tokens which are used for minting are burned (destroyed). USDC/BUSD tokens are deposited into the Iron Fiance protocol when a user mints an IRON token. ![]() Here is how the token economics (tokenomics) of the IRON.TITAN tokens work.īasically, the tokens are managed by a minting and redeeming system which works in this manner: To achieve this peg, Iron Fiance has stored collateral into time-locked smart contracts on the blockchain networks where the collateral is automatically mined or redeemed and managed algorithmically.įor Polygon’s network, IRON is backed by a combination of stablecoin like USD Coin (USDC) and a volatile asset like the TITAN token.įor the BinanceSmartChain network, IRON is backed by a stablecoin like Binance USD (BUSD) and the volatile STEEL token. If the system works as designed, you will be able to redeem 1 IRON token for about US$1 worth of tokens. Iron Finance’s main goal is to ensure that the IRON token’s price is stable and maintains its peg to the U.S. dollar which is available on both the Polygon and BinanceSmartChain blockchain networks. The protocol’s main ‘product’ so to speak is its IRON token: a stablecoin that is soft-pegged to the U.S. What Is Iron Finance and the TITAN Token?īefore we begin, here is some background of the Iron Finance DeFi protocol that will help you understand what happened.Įssentially, this protocol is a multi-chain partial-collateralised algorithmic stablecoin.įYI: Stablecoins are a category of cryptocurrencies that try and peg their market value to an external asset like fiat currencies, precious metals or other cryptocurrencies in a bid to stabilise the price. Also, due to its decentralised nature, there will be little to no consumer protection when stuff like this happens. DeFi projects and Cryptocurrencies are still largely unregulated.DeFi projects and Cryptocurrencies are still very risky investments as the whole space is still in its infancy and kinks are being ironed out.Also, it is important to diversify your investment portfolio. Do not follow billionaires (or anyone for that matter blindly) and do your own due diligence before investing any of your money.The perfect storm of the Iron Finance protocol’s flawed tokenomics, panic selling by whales and other individual investors and a host of other factors led to TITAN’s token price crashing. ![]()
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