PANews reported on August 1 that according to The Block, the price of Kujira tokens fell 40% today, from $0.97 to $0.57, due to the liquidation of the Kujira Foundation's operating wallet. The foundation has assumed leveraged liquidity provision positions worth millions of dollars, but has failed to properly manage them on its own DeFi platform. The team claimed in a statement that the operating funds using leveraged positions are intended to increase liquidity and stimulate activities on its DEX.
The liquidation occurred because the team's loan, obtained using its own Kujira (KUJI) token reserves, was undercollateralized in a volatile environment. This led to automatic liquidation, triggering a chain sell-off and causing the price of collateral assets to fall. Data from Pulsar Finance shows that the team's wallet still has $2 million in debt.
“As a team, we believe the best use of a portion of our operating funds is to leverage and deploy across the ecosystem to drive liquidity and activity,” the team said in a Telegram post. It further claimed that certain individuals targeted its positions to intentionally cause a series of liquidations. The team further added that they take responsibility for their position and apologized for the impact on the price: “While this was only temporary, we realize it hurts and we’re sorry.”