Midas Investments becomes the latest victim to succumb to liquidity pressures caused by the 2022 bear market. Founded in 2018, the platform provided passive income streams for cryptocurrency investors.
The platform used decentralized finance (DeFi) strategies to offer clients higher interest rates than their CeFi counterparts.
According to the platform’s website, the company managed over $100 million in assets with over 1,000 clients. They offered high interest rates, e.g. B. 17.3% APY for BUSD and USDT deposits. Liquidity pools provide a return on investment (ROI) of up to 40%.
Midas Investments ceases operations.
Despite reports of robust risk management policies and high returns, the platform suffered heavy losses.
Details provided on the platform suggest that the company suffered a $50 million loss in the spring of 2022. After the bank run on Celcius and FTX, clients withdrew over 60% of assets under management (AUM), resulting in a large deficit.
The platform lost $14 million in depreciation in the Inchi protocol and $15 million in DeFi Alpha. The price dynamics of altcoins in the crypto winter also created deficits; For example, the platform owned significant amounts of FTM, which affected its collateral.
Massive withdrawals due to Celcius and FTX bankruptcy coupled with reduced return opportunities in the market made it impossible to cover daily user withdrawals
Midas investment
Midas’ balance sheet shows liabilities of $115 million against assets of $51.7 million.
The company accounts for the remaining deficit: $1.5 million for the Harmony Bridge hack, $3 million for the FTM price drop, $15 million to offset the Midas token sale on the Market and $10 million in increased payouts.
According to the announcement, only C-level employees knew about the dire situation.
Customer Compensation
In the compensation plan outlined by the platform, they will deprive users of all their earnings. Users with balance greater than $5000 will only get 55% of their balance.
Midas investments will offset losses in the platform’s native token, which is down over 99.5% today. You then exchange the tokens for the tokens of the new project.
The new project will include high-yield cryptocurrencies and treasuries holding liquid high-yield DeFi positions. The proceeds are transferred to the Midas token, which benefits its holders.
The team envisions a market cap of $200 million in two years.
The news caused a major uproar in the community as they cried over their lost investments. According to some, it was wrong that the platform provided false PR up to the last minute.
Here Midas cheated us like Mashinsky. The new “tiers” for Midas Boost were clearly implemented to pump more money into the platform. It was a trap. They had known for months that they would now go broke. The last minute TOS change was literally insane.
— Jon Dimetros (@theagentmetro) December 28, 2022
Midas Token Drops 99.9%
MIDAS is Midas Investments’ native utility token and the governance token for the Midas DeFi protocol. It is an ERC20 token with a limited supply of 5 million tokens.
The MIDAS token is currently trading at $0.01835, down almost 99.9% in the last 24 hours. Trading volume dropped by almost 99% in the last 24 hours. The 24-hour low and high for the token are $0.0002303 and $31.0, respectively.
Through the chart price analysis, we can derive an increasing downward movement of the price from the MACD histogram; The MACD and signal lines are moving south, so prices are likely to drop lower. The 14-day Relative Strength Index (RSI) shows Midas selling in oversold territory.
The sharp drop in price happened when Midas Investment announced it to the public.
At the beginning of 2023, the Midas team faces a difficult task as they embark on a new project marked by failure.
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