After a big drop in price, the millionaire said he had been “hit.” DeFi prompted the lord to draft a formal regulation proposal. After investing in a blockchain startup and suffering losses, he advocates for decentralized financial industry (DeFi) regulation.
The investor was “injured” by the unexpected collapse of the $TITAN token, of the DeFi Iron Finance project, which went from worth $ 60 to zero overnight. Despite being only a small proportion of his overall crypto holdings, the $TITAN losses left Cuban looking “like everyone else.”
As reported by DiarioBitcoin, there was a large sell-off in $ TITAN prices on Wednesday , which the publication describes as a “bank run.” Polygon had just welcomed Iron Finance to its network.
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.” The reports claim that Cuban had invested USD $ 75,000 to give the protocol liquidity.
In conversations with Bloomberg, Cuban acknowledged that he was unhappy with the operation, despite the modest investment. In every new industry, there are risks you took to try to make money and also to learn.
In fact, he accepted part of the responsibility for the losses on his investment and described himself as “lazy” for not completing the study beforehand.
“Even if I’ve been lazy, it’s my fault. These kinds of games depend on money and math, and I was lazy to figure out the essential criteria. “
Iron Finance works by using smart contracts on the Blockchain, without the need for third parties such as banks or investment managers. But this industry is free from consumer protection rules, which discourage unscrupulous behavior.
Iron Finance proposed the potential to offer up to 10,000% APY in $TITAN tokens to encourage USDC to participate in its liquidity funds.
He was honest in admitting that “when the TVL [total value locked] started to rise again,” he left and rejoined the project. Iron Finance currently has around $ 70 million in liquidity (TVL).
Cuban said: “The investment was not significant enough to justify giving it more attention. But I think the real problem is the regulations. Each additional layer will compete with many other currencies. For the winners, it is a highly profitable arbitrage and quota industry.
Cuban advocated for the regulation of stablecoins, currencies linked to assets, with the goal of preserving stability.
“ Should we have $ 1 in US dollars for every $ 1 in stablecoins? “, He asked. “ If the guarantee is not 1 to 1, should the calculation of the risks for all users be clearly defined and approved before its launch? Probably since stablecoins need to reach hundreds of millions or more in value to be useful, they should have to be registered . “
Cuban has recently called on the US government and authorities to increase their support for the cryptocurrency sector, such as DeFi services. Otherwise, he said, the nation would lose “the next great economic engine it needs.”
The DeFi space is prone to the proliferation of scams, glitches, exploits, “carpet pulls” and other types of scams. All of this is something to be constantly on the lookout for.