The billionaire claimed to have been facing losses right after the TITAN token crumbled down from $ 60 to $ 0. A few days after writing a defense to DeFi, he asked for regulation of the sector.
Billionaire investor and owner of the NBA’s Dallas Mavericks team, Mark Cuban, is calling for regulation of the decentralized finance sector (DeFi), after the project in which he invested suddenly collapsed.
The investor received the damage because of the sudden collapse of the TITAN token, of the DeFi Iron Finance project, which plunged 100% on Wednesday night, going from a price close to USD 60 to a value of USD 0. Even when TITAN only gathered up a small percentage of his cryptocurrency portfolio, Cuban stated that he suffered losses.
The price of TITAN fell significantly on Wednesday night due to massive panic selling among investors, in what they usually call a “bank run.” Also, Iron Finance had recently joined the Polygon network – which Cuban supports.
The billionaire investor had mentioned the TITAN token in a blog post on Sunday titled “The Brilliance of Yield Farming, Providing Liquidity, and Valuation of Crypto Projects.” Reports assure that Cuban had invested USD 75,000 to provide liquidity to the protocol.
A Project Promising Attractive Returns
In a conversation with Bloomberg, Cuban spoke about his unhappiness regarding the operation, even though the investment was relatively small for the renowned businessman. He said that In any new industry, there are risks that can be taken in order not only to try to make money but also to learn how things work.
He took a bit of the blame for the losses on his investment and called himself “lazy” for not researching more profoundly before getting involved with the project.
Like other DeFi protocols, Iron Finance is a project that operates through smart contracts on the Blockchain without the need for mediators such as banks or investment managers. However, unlike banks, this sector is not subject to consumer protection laws, which discourage bad actors; there are no such regulations for DeFi.
To incentivize USDC’s role in its liquidity funds, Iron Finance had brought yields of up to 10,000% APY on TITAN tokens, a figure that may have caught Cuban’s attention.
Cuban had felt suspicious at some point with the project, admitting that he had left and entered again “when the TVL [total blocked value] started to rise again”. Iron Finance attracted more than $ 2 billion in liquidity (TVL), but now that figure has dropped below $ 70 million.
Cuban’s request for regulation comes shortly after he declared that the US government and regulators should bring more solid support to crypto innovations, such as the DeFi industry. He argued that otherwise, the country would lose the next great growth engine that this nation requires.
The DeFi space is prone to the proliferation of scams, glitches, exploits, “carpet pulls” and other types of scam moves. All of this is something to be constantly vigilant about. Iron Finance is just the latest project in the industry to collapse.
By: Jenson Nuñez
