Iron Finance Post-Mortem 17 June 2021

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2021-06-17 16:00:05

Around 10am UTC on 16-June-2021, we noticed some whales began to remove liquidity from IRON/USDC, then sold TITAN to IRON and then IRON to USDC directly to liquidity pools instead of redeeming IRON, which caused the IRON price off-peg. TITAN dropped from 65$ to 30$ in 2 hours, which later recovered in 1 hour to 52$ and IRON fully recovered its peg.

The pro tocol and the code functioned as usual, and while we were monitoring the blockchain activity, we thought it’s just another correction prior to recovery. In fact, IRON was already off-peg at least a dozen times in its entire history, while our share-tokens (STEEL and TITAN) crashed much harder over previous weeks. Things not only seemed battle-tested — they were. Users remained calm and trusted in the code, so did we.

While working on the forked code from FRAX, we have studied closely all projects that forked FRAX and can’t maintain their peg at a later date. For that, we already implemented a lot of improvements like our dual collateral ratios mechanism, which already proved to prevent the off-peg problems which occurred many times in real situations before.

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