Billionaire and NBA’s Dallas Mavericks owner Mark Cuban, known to be a decentralized finance (DeFi) aficionado and a high-tier investor, admitted becoming lazy and failing to be diligent resulting in him losing money in a recent bank run.
The dogecoin supporter invested in a DeFi project known as Iron Finance which ended up as a witness to a historical bank run after $IRON, its partially collateralized stablecoin, moved in a manner that caused the price of the project’s share token TITAN drop by almost 100%.
Following the incident, after his massive loss, Cuban is now calling for more stablecoin regulation.
Stablecoins are considered to be a fast-expanding sector in the decentralized finance ecosystem, offering the best of both worlds, provided investors do their own thorough research first.
They work by combining fast transactions, security and privacy of crypto with the low volatility of fiat currencies. These coins are not created equally as they differ mainly based on the type of assets that back them.
USD Coin and Tether are considered to be hard pegged stablecoins and are fiat-backed, possessing a peg to the U.S. dollar. Meanwhile, soft-pegged stablecoins, like the $IRON of Iron Finance, leverage a dual-currency structure and store collateral in order to achieve the $1 peg.
“Even though I got rugged on this, it’s really on me for being lazy. The thing about DeFi plays like this is that it’s all about revenue and math and I was too lazy to do the math to determine what the key metrics were,” admitted Cuban when asked about what happened.
After his “poor DeFi play,” the billionaire resorted to calling for more stablecoin regulation – a move that backfired and earned him various criticisms on Twitter, with some calling him a “bad loser.”
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