Orignally published on 2021-06-17 16:33:57 by markets.businessinsider.com
- Billionaire investor Mark Cuban said he got “hit” by losses in Titan token which crashed from $60 to $0 on Thursday.
- The token reportedly crashed as large whale accounts unloaded their shares and then triggered panic-selling.
- “I got hit like everyone else. Crazy part is I got out, thought they were increasing their TVL enough. Than Bam,” Cuban tweeted.”
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Billionaire investor Mark Cuban traded a DeFi token that crashed to zero in just one day.
The token is known as the IRON Titanium Token, or TITAN, and was part of Iron Finance, an algorithmic stablecoin project.
On Thursday, TITAN plunged from about $60 to near zero, as large whale accounts began dumping their holdings and then triggered panic- selling, according to Rekt.news.
Thursday evening, Cuban tweeted that he got hit by the token’s massive slide like every other investor.
“I got hit like everyone else. Crazy part is I got out, thought they were increasing their TVL enough. Than Bam,” Cuban said.
It’s not clear how much money Cuban lost, or when he exited his trade. He told Bloomberg News on Friday that TITAN only made up a small percentage of his crypto portfolio, but enough that he “wasn’t happy” about the trade.
The billionaire investor mentioned the TITAN token in a blog post Sunday titled, “The Brilliance of Yield Farming, Liquidity Providing and Valuing Crypto Projects.”
In the post, he said that he’s a liquidity provider for decentralized exchange platform QuickSwap:
I provide 2 different tokens (DAI/TITAN) that enable Quickswap to offer swaps between these two tokens. As you can see here, this pair is one of many, and you can also see that based on the .25 pct of volume in this swap that Quickswap pays, my return on my initial $75k investment (based on fees only) as of this writing, is an annualized return of about 206% (Based on the fees earned in the last 24 hours. This return percentage will vary all over the map depending on the activity.) But the cool thing is while I don’t get any extra rewards for this pair (you reading this Titan and Quickswap ???), I am currently the only LP in this pool, so I get 100pct of the fees. In every pool, the LPs, get a percentage of the fees based on the percentage of the liquidity they provide.
So in exchange for providing the Liquidity both TITAN and Quickswap need for their businesses, I get .25 of the transaction volume for swaps between these two tokens. As long as I keep making a good return, I will keep my money invested (Volatility can create mark to market losses). If not, I can immediately withdraw it (some platforms have a hold period or penalties) . Have enough LPs and the exchange is far more capital efficient than a similar traditional exchange business and i get to make some money.
On Friday, Cuban told Bloomberg News that there should be regulation in place to define what a stablecoin actually is and what collateralization is acceptable.
“Even though I got rugged on this, it’s really on me for being lazy. The thing about de fi plays like this is that its all about revenue and math and I was too lazy to do the math to determine what the key metrics were,” Cuban said in an email to Bloomberg. “But if you are looking for a lesson learned , the real question is the regulatory one. There will be a lot of players trying to establish stable coins on every new l1 and L2. It can be a very lucrative fee and arb business for the winners.”
Cuban did not immediately respond to Insider’s request for comment.