See More

DeFi Yields Platform Midas Investments Becomes Latest Casualty of FTX Turmoil

2 mins
Updated by Ryan Boltman
Join our Trading Community on Telegram

In Brief

  • Midas Investments announced its dramatic closure in a blog post on December 27.
  • According to the CEO, the collapse of Terraform Labs, Celsius, and FTX made it impossible for the platform to sustain its fixed yield model.
  • Midas is the latest casualty of crypto's most dramatic year, which has seen over $2 trillion of value wiped from the ecosystem.
  • promo

On Tuesday, Midas Investments announced its sudden closure in a blog by its CEO Iakov “Trevor” Levin. As a result of significant losses in 2022, the platform that focused on DeFi yields is closing its doors for the last time.

Levin writes that the platform saw its DeFi portfolio suffer a 20% loss of its assets under management (AUM) in the spring of 2022. A hit totaling 50 million dollars. The situation worsened after the collapse of FTX and Celcius when users withdrew over 60% of AUM, creating a large asset deficit. Based on those events and the “current CeFi market conditions, we have reached the difficult decision to close the platform,” he wrote.

According to the blog post, Midas lost 14 million dollars in the Ichi protocol and lost 15 million dollars due to the devaluation of the DeFi Alpha portfolio position. 

The CEO also made it clear that the company would pivot to a new on-chain project “that aligns with our vision for CeDeFi.” CeDeFi refers to centralized, decentralized finance. A structure that takes advantage of the benefits of decentralized finance but with more centralized decision-making at the top. 

The platform has published a YouTube video that explains their decision.

Midas Collapse Bookends Crypto’s Nightmare Year

Midas Investments is only the latest victim of crypto’s most dramatic year to date. The tsunami first appeared in May when the stablecoin TerraUSD (UST) plummeted following a mass sell-off. The wave engulfed large swathes of the crypto market, wiping out about $500 billion in approximately two weeks.

The surge washed out some of the industry’s previously rock-solid giants, including hedge fund Three Arrows Capital, Voyager Digital, and Celcius Network. Three Arrows Capital (3AC) used borrowed funds to make risky bets on the crypto markets, assuming prices would continue to rise. One of 3AC’s creditors was Voyager, to which it owed $650 million. When 3AC crumbled, Voyager followed shortly after. 

Digital asset lender BlockFi, and crypto exchange FTX collapsed later in the year.

This year’s crypto crash has also affected smaller Web3 and DeFi firms, as well as institutional and retail investors. At least 15 pension funds suffered losses due to their exposure to FTX.

Top crypto projects in the US | July 2024
Harambe AI Harambe AI Explore
Uphold Uphold Explore
Coinbase Coinbase Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | July 2024
Harambe AI Harambe AI Explore
Uphold Uphold Explore
Coinbase Coinbase Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | July 2024

Trusted

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

Frame-2298.png
Josh Adams
Josh is a reporter at BeInCrypto. He first worked as a journalist over a decade ago, initially covering music before moving into politics and current affairs. Josh first owned Bitcoin in 2014 and has followed the space ever since. He is particularly interested in Web3 adoption, policy and regulation, CBDCs, privacy, and the future of the metaverse.
READ FULL BIO
Sponsored
Sponsored