An “invincible” fund going wild – Invictus means in Latin invincible, insurmountable, even invulnerable. The word inspired the famous eponymous poem by Englishman William Ermest Henley. And this text, symbolizing resilience to the trials of life, was Nelson Mandela’s favorite. Ironically: the financial troubles of the South African hedge fund Invictus Capital refer to the fragility of the crypto lending sector still impacted by the aftershocks of the fall of the Luna and its home stablecoin. “I am the master of my destiny”, said the poet. But that was before this d’1 million dollars.
Invictus Capital finally down for $1 million
October 30 was the deadline to repay his loan. And Invictus Capital has not honored its debt contract with the decentralized loan protocol TrueFi. Denominated in Binance USD and amounting to1 million dollars, she had been running since May 3rd. As a reminder, the particularity of the TrueFi protocol is the absence of collateral that is, the borrower does not pledge anything against the funds.
Invictus Capital is linked to the company New World Holdings based in the Cayman Islands and declared in voluntary liquidation last summer. Why such an approach? Because all of the funds linked to the parent company held large amounts of UST – the stablecoin of the Terra blockchain – which were partly deposited on the platform Celsius Network. And it all went up in smoke in a few weeks.
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Decentralized unsecured lending protocols questioned
Beyond the Terra case, which has been extensively covered in our columns, what questions here is the very principle of the unrequited loan? Basing a loan on the confidence and good financial health of a group at the moment T seems like a good idea on paper. But when things go wrong, there’s really no plan B.
Besides, this is not the first time that the protocol TrueFi is faced with this type of situation. Last month it was the Korean company Blackwater which was lacking a debt of over $3 million. Obviously, this principle of lending, which is widespread in finance traditional, struggles to be applied to the more volatile cryptocurrency market. Maple Financeanother protocol of the same type had to modify its loan conditions after a 10 million slate left by Babel Finance.
TrueFi has not yet communicated on the case of Invictus Capital which is not yet under an official notice of default. In the meantime, mention of the Terra case should remind us that the cryptocurrency ecosystem is young and sometimes still immature and that the refreshing enthusiasm of its community must sometimes be channeled through the wisdom and experience of industry veterans. . “Bruised by this existence, I am standing although wounded”wrote the Invictus author, and it perfectly echoes the crypto misadventures of our comrade Rektosaurus with precisely… Terra (LUNA).
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