Last week was a wild one for the speedy, proof-of-stake network Fantom. A large holder of Fantom’s FTM tokens took out a massive loan and brought the network to its knees.
Things have cooled off since, but the episode brought to light how very traditional financial activity (like lending and borrowing) can still wreak havoc on cutting-edge technologies.
Here’s the story of how a Fantom whale nearly crashed the network. (Crypto networks don’t typically “crash” in the traditional sense of the word; instead, they get so expensive and congested that they become nearly impossible to use.)
The degen in question reportedly goes by the pseudonym Roosh in the Fantom community, and he deposited $50 million worth of FTM (roughly 59 million FTM tokens) on a DeFi protocol called Scream to take out a loan for two other tokens.
Scream is a lending protocol, like Aave or Compound, built on Fantom.
The two tokens were SOLID, from the protocol-to-protocol crypto exchange called Solidex (learn more here), and DEUS, the native token for a Swiss-army financial services platform called Deus Finance. You can see the whale’s wallet here.
So, to recap so far: Roosh put $50 million of FTM into Scream to get out SOLID and DEUS.
The whale received 37 million of these two tokens because Scream, like just about every other DeFi platform, only executes over-collateralized loans. You must deposit more money than you receive. To mint MakerDAO’s DAI stablecoin, for example, you need to put in $1.5 worth of ETH in…