Another Terra? Kuji token crashes as team’s position gets liquidated

Cosmos crypto project Kujira is facing a massive liquidation event that has seen its token KUJI tank by over 47% since early Thursday. The team claims their leveraged positions were attacked.

Kujira Foundation is said to have four leveraged LP positions – KUJI/USDC, KUJI/ATOM, KUJI/USK, and USDC/USK – on its Ops wallet. These positions are now being liquidated as prices drop further. The liquidations have led to the wallet balance dropping to $8.7 million from over $12.4 million earlier today.

Kujira still has $5 million debt pending liquidation

In a Telegram post, the Kujira team said people are targeting their positions.  

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

With over $3 million in KUJI feared to have been liquidated already, another $5 million still remains in outstanding debt pending liquidation, according to the analysis posted by Rarma on X.

KUJI’s price has dropped by 47.9% to $0.4818 from today’s opening price of $0.9251. At the current price, KUJI is down over 91% from its all-time high. A day earlier, Kujira’s stablecoin USK also briefly got de-pegged, dropping to $0.94.

Kujira insists this is not a Terra situation

The situation has had some people in the crypto space say Kujira project is a “slow rug” and others have dubbed it the next Terra, especially since both projects are based on Cosmos blockchain. However, the Kujira team refuted the speculation, saying “This isn’t a Terra type situation.”

“It’s a contained amount of debt, that will be dealt with one way or another. It is hurting KUJI price which we realise, but can only ‘spiral’ so much,” Kujira said.

It’s worth mentioning that Kujira started off on the Terra Classic blockchain before moving to its layer-one network on Cosmos after Terra imploded.