Billionaire Mark Cuban, who suffered during the collapse of the IRON Finance DeFi protocol token, admitted that he lost his investment through his own fault. In an interview with The Block, the owner of the Dallas Mavericks basketball club said he should have spent more time analyzing.
On June 17, the project team recommended that users withdraw funds from the pools, since the IRON Titanium Token (TITAN) depreciated as a result of the “banking panic”.
The asset was part of the backing of the IRON stablecoin on the Polygon network. The emission mechanism assumed that if the IRON rate deviates from the $ 1 level, the protocol issues additional TITANs and withdraws liquidity to stabilize it.
This state of affairs created an opportunity for arbitration. Users began to actively sell tokens, which led to their depreciation.
Cuban said the incident did not affect his attitude towards decentralized finance, which he previously called “the next big engine of growth” for the United States.
“It’s my own fault that I didn’t do my homework. […] A few hours of work with the spreadsheet and I would be better aware of the risks. I could still take the risk, but it became more obvious, ”said the billionaire.
The owner of Dallas Mavericks said that he saw information about IRON Finance on the Internet and decided to support the project. He felt that the benefits he could get justified all the risks.
“I thought I would let TITAN develop, I wouldn’t be greedy, and in a few days I’ll get it all out. But apparently this never happened, ”he added.
Cuban stressed that the incident with IRON Finance shows how important the role users play in the development of a particular DeFi project. If the community were more active or larger, he said, someone warned of the risk of TITAN’s depreciation.
The billionaire believes that in order to prevent such situations, sector participants need to create “a community of auditors or a test networked AI simulator capable of simulating all possible scenarios.”
The developers of IRON Finance said that the incident was fatal to the protocol – they announced the closure of the project.
Iron Finance Post-Mortem 17 June 2021https://t.co/w084l7kzMK
— IRON Finance (@IronFinance) June 17, 2021
“Our experience is the worst thing that could happen to the protocol. […] We learned a lot from this incident and, although nothing can be fixed in the existing system, in the future we will continue our journey with new products, ”the message says.
The project team emphasized that it will hire auditors to conduct a “deep protocol review” to better understand the causes of the incident. In the future, they will release a new version of the stablecoin IRON and begin testing two fresh products – IronBank and IronSwap.