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Iron Titanium token (Titan) price prediction after plunge to zero

By Alejandro Arrieche

12:02, 6 July 2021

Iron Titanium token (Titan)

The Iron Titanium token, or Titan, is in the news after its price fell to zero amid a series of intricate trades that led to its collapse.

After reaching more than $2bn in total value, the Titan cryptocurrency has become a symbol of how things can quickly go wrong on the still immature DeFi ecosystem.

The involvement of billionaire investor and entrepreneur Mark Cuban is likely the reason why the token’s implosion caught the mainstream media’s attention. The owner of the Dallas Mavericks basketball team acted as a liquidity provider for the decentralised exchange. He reportedly lost money.

Titan’s crypto crash highlighted the weaknesses of “tokenomics”, as a group of deep-pocketed players reportedly managed to dump a sizable amount of Titan, causing widespread panic and leading to the token’s eventual collapse.

Want to know more about how this could happen? Keep reading the following article to get more details about how Titan’s price fell to zero and what the future may hold for it.

What Is a Titan token?

Titan is a DeFi token built on the Polygon blockchain. It existed to back the IRON stablecoin developed by Iron Finance. A stablecoin is a cryptocurrency whose value is pegged to the US dollar or any other fiat currency. It’s often used as a transitory vehicle, allowing traders to park their money before moving to their next crypto trade.

A stablecoin’s value is designed to remain constant because every coin issued should be backed by one unit of the fiat currency it represents.

For IRON, a stablecoin pegged to the US dollar, these reserves were backed by 75% of USDC – another stablecoin – and 25% of Titan tokens. However, when the price of Titan collapsed, the value of IRON moved off its $1 peg to trade at $0.75 at some point.

Iron Titanium

Now, why did Titan collapse? 

In a lengthy post published by Iron Finance, the developing team performed a post-mortem analysis, stating: “We just experienced the world’s first large-scale crypto bank run.”

The incident began on 16 June when a group of whales – a term used to refer to deep-pocketed traders – started to remove liquidity for the IRON/USDC pair and then exchanged TITAN for IRON to then exchange IRON to USDC.

SOL/USD

208.13 Price
-2.870% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 2.2652

BTC/USD

87,722.80 Price
-0.720% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00

XRP/USD

0.67 Price
-7.440% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 0.01168

DOGE/USD

0.38 Price
+1.900% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 0.0012872

This resulted in IRON moving off its 1:1 peg, something that’s happened in the past but not to this extent. The problem got bigger when other users started to fear that this could be a bank run and not a short-lived correction in Titan’s price. These concerns led to a wave of selling and Titan’s subsequent collapse.

One particular issue is that the tokenomics of Titan allowed users to redeem their IRON tokens for Titan. Since the Titan token was collapsing, many tokens were issued in exchange for IRON. As a result, the higher the supply got, the lower the price of Titan went.

Referring to the incident, the developing team said: “What we just experienced is the worst thing that could happen to the protocol, a historical bank run in the modern high-tech crypto space”.

At the time of writing (5 July 2021), one TITAN token is worth $0.000002225, according to data from CoinMarketCap.

Iron Titanium (Titan) token news

Many cryptocurrency experts shared their views about what went wrong with Titan. Mati Greenspan, a portfolio manager and founder of Quantum Economics, told CNBC: “The iron model was deeply flawed from a tokenomics perspective. The code was un-audited, and the system was never properly stress-tested.”

Mark Cuban added: 

“Even though I got rugged on this, it's really on me for being lazy. The thing about DeFi 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.”

The developing team says that “nothing could be fixed in the current system”. The collapse of Titan also led to the collapse of the IRON stablecoin as the token is now trading off its $1 peg at $0.75, according to CoinMarketCap. At the time of writing, the value locked on IRON is at $4,405,140, down from the $2bn users had locked on the protocol by 14 June.

Iron Titanium token (Titan) price prediction

It’s hard to see Titan rising to anywhere near where it was before its mid-June collapse. 

The fact that crypto-assets are not backed by a hard asset makes them susceptible to bank runs and what happened to Titan could happen to most tokens whose value is derived by how much the person is willing to pay for them.

This trust-based system has worked for centuries for government-backed fiat currencies but less well for some cryptocurrencies, as reflected by their highly volatile valuations.

In another blog post, the project’s developers have outlined a path to rebuild Titan. But until they can fix the weaknesses that led to its collapse, a plausible Iron Titanium (TITAN/USD) forecast sees little reason for the token to rise from its current lows.

Frequently Asked Questions 

Is Titan coin a good investment?

The flaws exposed by mid-June’s bank run have eroded trust in Titan as a potential store of value. Until the developing team redesigns and relaunches the token, as they’ve proposed doing, it’s hard to qualify Titan as a good investment.

In fact, the developing team has issued the following warning: “As communicated numerous times so far, please do not buy or trade any Iron Finance tokens. Please do not buy or trade any IronFinance or DiamondHand tokens and do not use the DragonBall lottery.”

Keep in mind that this Titan coin price prediction is based on the comments issued by the developing team and it should not be taken as investment advice. Investors should perform their own due diligence to assess if a financial instrument is worth investing in. 

Will Titan’s token price rise again?

The likelihood of Iron Titanium rising anywhere near where it traded back in June is very low due to significant flaws in the project’s ‘tokenomics’. According to Iron Finance investor Fred Schebesta: “There was no rug pull or exploits. What happened is just the worst thing that could possibly happen considering their tokenomics.”

Will Iron Titanium token (Titan) reach $1 in 2021?

It’s unclear how long it would take Iron Finance to develop and launch a new version of Titan ,reducing the likelihood that the Iron Titanium token will reach a price of $1 per token in the near future.

Where and how to buy Titan tokens?

Following the words of Titan’s developing team, investors should abstain from investing their money in Titan or in any token developed by Iron Finance.

These tokens have exhibited flaws in their design and coding, and this means that investing in Titan could lead to losses if other incidents similar to the one seen in June occur.

Read more: SafeMoon price prediction: should you choose it over dogecoin?

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