The most popular example of this type of algorithmic stablecoin was IRON, which was a mismanaged version of FRAX. Users could mint IRON with BUSD (in the BSC version; USDC on Polygon) and redeem it for BUSD + some protocol tokens (STEEL in BSC, TITAN in Polygon). Whenever someone minted IRON, it used a portion of that BUSD to buyback the protocol’s token, which caused a pump in the price of the token, but left IRON only partially backed with collateral. The promise was that the remaining part of the stablecoin’s value relied on the protocol’s token marketcap to be able to redeem the full value of $1. In a bank run—which is what happened—many holders attempted to redeem their IRON, but the portion of reserves that the protocol token was supposed to cover quickly became worthless, leaving IRON holders with only the value in actual collateral (BUSD or USDC) for redemptions.