Kujira

USDC

Cosmos

After seeing its token KUJI crash by more than 50% on Thursday due to overleveraged positions, the Kujira team is now in talks for a bailout to salvage the project. 
In a Telegram post on Friday, the team confirmed they were in talks with Atom Accelerator DAO (AADAO) and other foundations for a solution. AADAO is a community-oriented fund for projects building under the Cosmos (ATOM) ecosystem.&nbsp; 
“We had a really good call with AADAO and it’s looking like there’s a good solution,” <a href="https://t.me/team_kujira/557030" rel="nofollow" target="_blank">the team wrote.</a> “We’ve had incredible support from various cosmos teams and foundations and it looks like a bright future is ahead.” 
<h3 id="span-style-font-weight-400-kuji-s-problems-started-with-the-liquidation-of-its-leveraged-positions-span">KUJI’s problems started with the liquidation of its leveraged positions</h3> 
The <a href="https://www.cryptopolitan.com/kuji-token-crashes-team-position-liquidated/">trouble for Kujira escalated yesterday</a> as the team’s overleveraged positions on KUJI got liquidated on the claim that “people targeted the team positions.” The cascade of liquidations that ensued led to KUJI price tanking by over 50% below $0.5 as of August 1.&nbsp; 
At the time of writing, the price of KUJI’s stablecoin, USK has yet to make a full recovery. The stablecoin USK fell to as low as $0.87 before also recovering to $0.91. KUJI fell by another 22% to $0.39 on Coingecko. It had dropped to $0.258 early in the day before slightly recovering to the current price.&nbsp; 
<figure class="wp-block-image size-large">
 <img loading="lazy" decoding="async" width="1200" height="876" class="wp-image-562986" src="https://www.cryptopolitan.com/wp-content/uploads/2024/08/chart-2-1200x876.png" alt="" srcset="https://www.cryptopolitan.com/wp-content/uploads/2024/08/chart-2-1200x876.png 1200w, https://www.cryptopolitan.com/wp-content/uploads/2024/08/chart-2-300x219.png 300w, https://www.cryptopolitan.com/wp-content/uploads/2024/08/chart-2-768x561.png 768w, https://www.cryptopolitan.com/wp-content/uploads/2024/08/chart-2-1536x1121.png 1536w, https://www.cryptopolitan.com/wp-content/uploads/2024/08/chart-2.png 1644w" sizes="(max-width: 1200px) 100vw, 1200px"> 
 <figcaption class="wp-element-caption">
 USK stablecoin price chart, Coingecko.
 </figcaption> 
</figure> 
<h3 id="span-style-font-weight-400-kujira-needs-a-bailout-span">Kujira needs a bailout&nbsp;</h3> 
Kujira needs as much bailout as it can receive, as the situation seems more dire than the project has been willing to let on. USDC lenders on Kujira are currently stuck with their holdings on the protocol. 
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">
 Oh shit! <a href="https://twitter.com/search?q=%24KUJI&amp;src=ctag&amp;ref_src=twsrc%5Etfw" rel="nofollow noopener" target="_blank">$KUJI</a><a href="https://twitter.com/search?q=%24USDC&amp;src=ctag&amp;ref_src=twsrc%5Etfw" rel="nofollow noopener" target="_blank">$USDC</a> <a href="https://t.co/eBIGQvExvY" rel="nofollow" target="_blank">pic.twitter.com/eBIGQvExvY</a>— .. 🉐️.. (@wenmoonwenlambo) <a href="https://twitter.com/wenmoonwenlambo/status/1819280164754235754?ref_src=twsrc%5Etfw" rel="nofollow noopener" target="_blank">August 2, 2024</a>
</blockquote> 
Kujira’s USDC treasury has been depleted to the extent that the liquidation engine does not have enough to repay lenders. Currently, there are still millions that need to be repaid. Although the USDC deposit rate has gone up to over 290% APR, it appears too risky for potential investors. Many of them are cautious there is a slim chance they will be able to regain their asset if they lend their USDC.&nbsp; 
<figure class="wp-block-image">
 <img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfm56VMT0LZ40gTcHzWCVhlU-2-m27NrlB_IwzJWie5Jd_NJQYhWrqNzs4YniYYDvLlb-KrVi8pQDZBNqF2S4aB3Z2RWkiFPwp4tOXOMMS1ZfR6jRotfGTe_Xfzs2xABhVuqMbA2VIyk_KsFXQyGZqwa20?key=BIshGgib7QxiJ9Ky30UsIQ" alt="">
</figure> 
If Kujira secures a bailout large enough to cover the USDC borrowed from its treasury, it could help clear the backlog of pending USDC withdrawals by lenders. It could also mark the beginning of a resolution, starting with lowering the utilization and APR rates. This will allow for the loans to be settled without the liquidation bids kicking, which will, in turn, save prices from dipping further.

Kujira in bailout talks as KUJI continues to tank over bad debt

Table of Contents

Cryptopolitan_News

Other articles published on Aug 2, 2024

Tether Drives Stablecoin Growth to 2-Year High, Market Cap Reaches $164B

MicroStrategy Boosts Bitcoin Holdings Despite Quarterly Losses

CESS Announces the Launch of Venus Testnet to Build the Future of Decentralized Storage, CD²N and...

Crypto Biz: Stablecoins wave, crypto trading via UAE banks, and more

Coinbase CLO denies allegations of finance violations in crypto super PAC donations

Cunning Phishing in the Dark Forest

Join our free newsletter for daily crypto updates!