Curriculum·R409 Grid, DCA, and Rule-Based Automation·about 42 min
Grid mechanics from first principles
By the end of this lesson you can
- →Define a grid by its five parameters and derive every other quantity from them
- →Compute profit per completed cycle, net of fees, at a given level
- →Show the difference between arithmetic and geometric spacing, and when each is correct
- →Derive the oscillation frequency a configuration requires in order to reach a stated return
Senior · enrolled learners
This lesson opens with Iron Finance and TITAN, 16 June 2021.
- What happened
- Iron Finance issued IRON, a token intended to hold a dollar value, backed partly by USDC and partly by its own TITAN token in a stated ratio of about 75 to 25. The mechanism was arithmetic rather than discretionary: minting IRON burned TITAN, and redeeming IRON minted new TITAN. On 16 June 2021 large liquidity providers withdrew from the IRON and USDC pool and began selling TITAN, which triggered redemptions, which minted more TITAN into a falling market, which triggered further redemptions. TITAN fell from a high around $65 to effectively zero within hours and protocol value fell from around $2B to near nothing. The team described it as a bank run produced by the protocol's own design rather than as an exploit, and the Federal Reserve later published a note using it as a case study in runs on algorithmic stablecoins.
- The decision point
- Every participant could have derived the behavior from the published rules before any of it happened, because the rules said that redemption creates supply and the supply is the collateral. Nobody needed to predict a run. They needed to read what the mechanism does in the direction it had not yet been tested in. That is the entire method of this course, applied to a different automated rule.
- Recorded loss
- $2,000,000,000
What you will be able to answer
- →What are a grid's five parameters?
- →What is profit per cycle?
- →Arithmetic or geometric spacing?
- →How many cycles does a target need?
Orientation and Year One are open: anyone can read them without an account. From Year Two onward the lessons are for enrolled learners, because progress through the later years only means anything if it is tracked against a record.
It is free. We do not sell the list and there is nothing to buy at the end of it.
Sources and review
- https://www.federalreserve.gov/econres/notes/feds-notes/runs-on-algorithmic-stablecoins-evidence-from-iron-titan-and-steel-20220602.html
- https://www.coindesk.com/markets/2021/06/17/in-token-crash-postmortem-iron-finance-says-it-suffered-cryptos-first-large-scale-bank-run
- https://finematics.com/bank-run-in-defi-iron-finance-explained/
- https://en.wikipedia.org/wiki/Iron_Finance
Confidence high·Volatility low·Reviewed 2026-08-07·Owner unassigned
Contested
Reported TITAN highs range from about $64 to about $65 and the date of the collapse is given as both 16 and 17 June 2021 depending on the time zone used. Neither affects the argument. The collateral ratio drifted over time and the 75 to 25 figure is the widely reported design point rather than a constant.
The grid parameters throughout this course use a worked configuration of a $90 to $110 range, 11 levels and $11,000 of capital, with fees at 0.1 percent per side. These are stated inputs chosen so every number can be checked by hand, per R409-L1, which requires the learner to redo this with their own figures and no bot interface.
J303 owns liquidity provision and impermanent loss. R409-03 owns the short volatility identity. This lesson owns the mechanical derivation only. Keep the splits.