Kujira token drops 40% as team's on-chain leveraged positions get liquidated

The native token of Cosmos-based Kujira blockchain saw its price decline 40% today — going from $0.97 to $0.57 — as a result of the Kujira Foundation operations wallet liquidations.

The foundation had taken leveraged liquidity provision positions worth millions of dollars, which it failed to manage properly on its own DeFi platform.

Using operational funds in leveraged positions aimed to improve liquidity and stimulate activity on its DEX, the team claimed in a statement.

The liquidations occurred as the loans taken by the team using its own Kujira (KUJI) token reserves became undercollateralized amid volatile conditions. This resulted in automated liquidations, triggering a cascading sell-off and dropping the prices of the collateralized asset. Data from Pulsar Finance shows that the team’s wallet still has a debt position of $2 million.

“As a team, we thought the best use of a portion of the ops funds would be to leverage and deploy across the ecosystem to bootstrap liquidity and activity,” the team said in a Telegram post. It further claimed that certain people targeted its positions. “Sadly, this coincided with various attacks. People targeted the team’s positions, and it has been a constant fight since these positions were created.”

The team added that it takes responsibility for its positions and apologized for the impact on the price. “Although temporary, we realize that it hurts and we are sorry.”

Kujira is a blockchain in the Cosmos ecoystem that operates as a decentralized finance hub. Some key features of Kujira include a decentralized exchange, a lending platform, and a decentralized stablecoin called USK. The network also runs a system for liquidating undercollateralized positions by the users themselves. The blockchain has a total value locked of over $42 million.