Cuban invested in the iron.finance project, more precisely in the iron digital coin. It is or rather was a stablecoin, the value of which was to be based on the digital currency USD Coin and a digital token iron titanium.
However, large token holders suddenly began exchanging their irons for the underlying assets, leading to a sell-off in the iron titanium digital token market on Wednesday. And when the other iron holders saw what was happening, they too began to demand an exchange of their tokens, which exacerbated the fall in the cryptocurrency of iron titanium.
The price of the iron titanium cryptoconcrete thus dropped from a record $ 64 to almost zero in a relatively short time. The reason for the behavior of large token owners was to collect profits from previous business transactions.
“We have witnessed the worst that could have happened to our project. It was literally a run on the bank in the technological world of cryptocurrencies, “he says design blog. He under pressure could not keep the exchange ratio of stablecoin iron to its holders.
In an interview with Bloomberg on Thursday, Cuban was critical of himself. He said he was “lazy” when he didn’t find out enough about stablecoin iron. He also mentioned that he had invested little money in the iron and did not suffer a significant loss.
At the same time, however, in a statement to Bloomberg, he called on US authorities and politicians to clearly define what is or is not stablecoin and what assets can be used as an underlying asset.
Stabelcoins are digital currencies whose value is underpinned by financial assets or traditional currencies. The most famous are the tether and the aforementioned USD Coin. Their value is pegged in a ratio of 1: 1 to the US dollar. This means that the issuer of such digital currencies holds either 100% or at least partial reserves in order to be able to keep the exchange ratio and satisfy investors at any time if they express an interest in converting tokens. However, there are also stablecoins that are not 100 percent covered, which is the case with the iron token.
Stablecoins are widely used in an environment of decentralized finance or DeFi. These are projects running on a blockchain. The DeFi area offers investors and clients similar services as traditional financial services – savings accounts, loans, insurance or stock exchange transactions.
Cuban, which is, among other things, its own basketball club Dallas Mavericks, is one of the big promoters of DeFi.
Stablecoins on cryptocurrency exchanges are used, for example, to trade bitcoin and other cryptocurrencies whose exchange rate fluctuates. They can also be easily transferred between individual exchanges or blockchain projects, unlike the case where the holder would like to convert directly, for example, dollars.
Source: E15.cz by www.e15.cz.
*The article has been translated based on the content of E15.cz by www.e15.cz. If there is any problem regarding the content, copyright, please leave a report below the article. We will try to process as quickly as possible to protect the rights of the author. Thank you very much!
*We just want readers to access information more quickly and easily with other multilingual content, instead of information only available in a certain language.
*We always respect the copyright of the content of the author and always include the original link of the source article.If the author disagrees, just leave the report below the article, the article will be edited or deleted at the request of the author. Thanks very much! Best regards!