Algorithmic stablecoin IRON Finance goes to zero and launches new token "ICE", with locked assets exceeding $1.4 billion.

The algorithmic stablecoin project Iron Finance experienced a boom and a subsequent price collapse, but now the project team has fulfilled its initial promise of launching version 2.0. They have reemerged with a new governance token called ICE, and have currently locked in $1.4 billion in funds.

What is TITAN, IRON Finance?

IRON Finance started on the Binance Smart Chain (BSC) and saw a surge in mining rewards and investor participation after adding support for Polygon MATIC due to its popularity.

IRON Finance aims to create a "partially collateralized token" on the MATIC chain. IRON, a partially collateralized stablecoin on the MATIC chain, is partially backed by the governance token TITAN to anchor its value to the US dollar. The initial setup was:

0.75 USDC + 0.25 TITAN = 1 IRON pegged to 1 USD

However, the former governance token TITAN surged from $1 in early June to $60, leading users to frequently sell TITAN for arbitrage opportunities, causing IRON to detach from its $1 peg. This resulted in both TITAN and IRON prices spiraling downwards simultaneously.

New Token ICE

On 6/28, the official announcement was made regarding a series of V2 version reboot plans, including:

• Opening governance token staking on 7/16
• Formation of IronDAO to increase governance participation
• Reissuance of Iron stablecoin scheduled for August
• IronSwap stablecoin exchange platform is already live
• IronLend lending platform expected to launch a test version on 7/19

Details of the new governance token ICE issuance are as follows:

• Total fixed supply of 1 billion tokens
• 1% reserved for official treasury
• 29% for user compensation, linear distribution over three years
• 70% for liquidity mining rewards, linear distribution over three years

Users eligible for compensation on Polygon include:

• IRON and IRON LP token holders
• TITAN and TITAN LP token holders

Users eligible for compensation on the Binance Smart Chain (BSC) include:

• dTokens token holders
• DND and DND LP token holders
• STEEL and STEEL LP token holders

The official statement emphasizes that there will be no new product development on the BSC; the focus will be on Polygon.

Stablecoin Exchange Platform IronSwap

Similar to Curve, IronSwap allows trading pairs of assets of equal value like stablecoins and Bitcoin, generating profits by collecting fees from the protocol. The official statement highlights that IronSwap has a trading fee of only 0.01%, making it the lowest among all exchange platforms on Polygon.

As of now, the new algorithmic stablecoin has not been released, and the new governance token ICE has experienced significant volatility, dropping from a high of $28.7 to $3.2. However, the protocol has locked up assets worth up to $14 billion.

As a result, the APY of stablecoin yield pools for USDT, USDC, DAI has significantly decreased to 105%, and so far, apart from a few survivors like Ampleforth AMPL, most algorithmic stablecoins have not been spared. While IRON has not been hacked, the reissuance of a new token has become a unique phenomenon in the crypto world.