KUJI tokens fall 40% as Kujira Foundation's operational wallet is liquidated

The price of Kujira tokens fell 40% today, from $0.97 to $0.57, as the Kujira Foundation's operating wallet was liquidated, The Block reports. The foundation had assumed a leveraged liquidity provision position worth millions of dollars, but failed to properly manage it on its own DeFi platform. The team claimed in a statement that the use of working capital from the leveraged position was intended to increase liquidity and stimulate activity on its DEX.

The liquidation occurred because a loan the team obtained using its own Kujira (KUJI) token reserves was undercollateralized in a volatile environment. This led to an automatic liquidation, triggering a chain sell-off and causing the price of the collateralized assets to fall. data from Pulsar Finance shows that the team's wallet still has $2 million in debt.

In a Telegram post, the team said: “As a team, we believe the best use of a portion of our working capital is to leverage and deploy the entire ecosystem to enhance liquidity and activity.” It further claimed that certain individuals targeted their positions and deliberately caused a series of liquidations. The team further added that they are willing to take responsibility for their position and apologized for the impact on the price: “While this is only temporary, we realize it hurts and we're sorry.”