DebtDAO Burn 18 Million $FUD Tokens in Response to Skyrocketing User Demand
The FTX and Alameda bankruptcy protection under chapter 11 is in the third month without any signs of compensation soon. As a result, a project dubbed DebtDAO came up with an initiative to make the FTX creditors again. Through newly-issued FTX User Debt (FUD) tokens, DebtDAO intends to raise capital from the public to repay the creditors. Initially, DebtDAO created approximately 20 M $FUD tokens and capped the price at 5 USDT.
However, due to the high subscription, the $FUD price rallied beyond the sending price. As a result, DebtDAO initiated an 18M $FUD token burn to rebalance the tokenomics.
Notably, $FUD has already received crypto community recognition with listings from several exchanges including Huobi Global. According to the announcement, DebtDao’s official on-chain destruction will take place on February 7. During the destruction period, FUD assets held by users, pending orders, and order placement functions will not be affected.
“DebtDAO is actively pursuing listing and circulation opportunities with leading exchanges. Creditors with FTX debt exceeding $10 million are also encouraged to contact DebtDAO for a debt audit and issuance, enabling the debt to circulate in the secondary market,” Huobi noted.
As a result, the underlying value of $FUD climbed significantly to an $800 million market cap.
Controversy Behind DebtDAO on $FUD token
The FTX collapse created a lot of regulatory uncertainty in the crypto market worldwide. Global regulators are keen to control cash inflow towards crypto firms, with Binance’s non-U.S. entity scheduled to stop USD bank transfers. Additionally, UK banking giants are reportedly following a similar path of blocking cash inflow to the crypto market.
Following the announcement of $FUD tokens, DebtDAO – a permissionless marketplace for crypto credit – has claimed the $FUD is a phishing scam.