burgoon

Here's my best attempt to explain what happened on $REKT today in simple terms (tldr - @IMFCrypto didn't "liquidate" anyone, it's just a decentralised platform that matches borrowers and lenders). IMF is build on top of @MorphoLabs, where anyone can lend money directly. In simple terms, IMF created the ability for people to borrow USDS against their $REKT (and other memecoin) holdings. IMF also had an "accelerate" function, which allowed you to deposit $REKT as collateral, borrow USDS against it, and then use that to buy more $REKT (essentially a form of leverage). As with all levered positions, there are levels at which you can get liquidated on and once those levels started hitting today it triggered a liquidity cascade all the way down to approximately a 70% price decline. You could see the $REKT collateral that was held in this Morpho contract: 0xBBBBBbbBBb9cC5e90e3b3Af64bdAF62C37EEFFCb, which at the beinning of the day owned almost 5% of the token supply. It is now down to 0.25% which means the leverage has almost entirely been wiped. Both IMF and Morpho are decentralised - none of these guys "caused" any liquidations or acted in bad faith. Unfortunately as a result of price action a liquidity cascade was triggered. Obviously feels like a kick in the face for me as I have been working so hard on $REKT through this bad price action, but if you are familiar with our story you will know that bouncing back from the dead is a challenge I relish - we have delivered A LOT this year and we still have A LOT more to come. I'm sure there'll be a bit of gravedancing, and I welcome it, it excites me - the way I see it is we got clean positioning now and this day will be part of the lore - anyone who knows me will know I'm gonna be at this even harder to prove a point. Cheers