Bitfinex-Backed Stablecoin 'Stable' Pauses Deposits Amid Technical Difficulties and Investor Concerns

Deposits Suspended Due to Technical Difficulties by Stablechain Backed by Bitfinex

In a recent surprising announcement, Stable, a blockchain project backed by Bitfinex, revealed that it has paused its Phase 2 pre-deposit campaign due to unanticipated technical difficulties. This surprising event emerges less than two weeks after its highly contentious Phase 1, which witnessed nearly $800 million pre-filling. Marked to kick-off at 9 am EST on 6th November, the Phase 2 launch was facilitated by Hourglass, the yield protocol for a stablecoin. Users were, however, left puzzled as they were repeatedly prompted to sign the terms-of-service agreement. The issues didn’t stop there: Hourglass’s website also crashed due to exceptionally high traffic.

Users Respond by Resorting to Direct Deposits

In response to the website outage, many users tried to deposit directly through the smart contract using Etherscan. Nevertheless, Hourglass came forth declaring that contract-level deposits were non-acceptable and required redemption. Amid the continuing technical issues, Stable took the initiative to officially announce the pause of Phase 2 deposits, just three hours after the scheduled opening. The stablecoin project reassuringly promised to share an updated strategy moving forward the next day.

Technical Difficulties, a Norm in DeFi?

While technical obstacles for eagerly awaited events are rather regular and somewhat understandable in the decentralized finance (DeFi) sphere, Stable’s initial deposit vault, which was launched on Oct. 23, is still under scrutiny. Reportedly, it was pre-filled by insiders nearly 20 minutes prior to the public announcement. Notably, a staggering deposit of $500 million was received from a cluster of wallets, which were directly linked to the vault owner. This second strike against Stable has managed to pique wariness among certain investors. A prominent anonymous DeFi investor known only as CBB took to social media to express his displeasure at the situation. Having deposited more than $15 million in the first round by tracking on-chain activity, CBB raised concerns about the project’s future.

Challenges Raising Doubts about the Project’s Future

CBB vocally criticized the handling of Stables’ Phase 1 and 2. He stated that it was so poorly executed that it made him genuinely question the team’s ability to even deploy a blockchain. However, when contacted for a response ahead of the vault launch, Stable declined to provide a comment. Stable’s silence has raised additional doubts regarding the reliability and transparency of the project but only time will tell whether the issues faced by Stable are momentary shortcomings or signs of deep-rooted challenges.

Conclusions

Stable, backed by Bitfinex, was expected to make waves in the world of DeFi with its pre-deposit campaign. However, its stumble out of the gates has opened a Pandora’s box. From unanticipated difficulties and website crashes to insider pre-filling and investor dissent, each issue raises additional questions about Stable’s integrity and credibility. While these challenges are not insurmountable, they require a quick and transparent resolution from Stable. The broader DeFi community will be watching closely. Despite the understandable technical difficulties, projects operating in the space need to uphold the highest standards of transparency and fairness to maintain investor confidence. The future of Stable is now subject to speculation. If it resolves the issues and goes on to successfully launch its platform, the saga will become a cautionary tale for other projects. If not, it risks becoming a case study of the pitfalls encountered in the ambitious pursuit of innovative financial technologies.

Bitfinex-Backed Stablecoin ‘Stable’ Pauses Deposits Amid Technical Difficulties and Investor Concerns