Three Arrows Capital co-founder Su Zhu, who previously invested in the LUNA token, commented on the collapse of the Terra ecosystem and the algorithmic stablecoin UST.
“It’s been an incredibly humiliating week and it’s hard to find the right words,” he wrote.
According to Zhu, the risks of pegging the price of UST’s algorithmic stablecoin to the dollar, which critics have been concerned about, should spark discussion about the future development of the project.
“The slow growth of the ecosystem will be more organic if it helps to make it safer,” the investor said.
In early May, Su Zhu encouraged his Twitter followers to take out loans secured by bitcoins. With the proceeds, he offered to buy UST and deposit tokens in the Anchor Protocol with a yield of 18-20%.
At the time of writing, the tweet has been deleted. Zhu apologized to his critics and said he should have been more careful in his predictions.
In general, Zhu called the incident “the moment of the DAO Terra hack”, drawing an analogy with the attack on the first decentralized autonomous organization The DAO in 2016. Then the damage amounted to $ 50 million.
“I can’t predict the future, but I’ll do my part [в восстановление проекта]”, he added.
Recall that on May 8, the UST algorithmic stablecoin briefly lost its peg to the US dollar. This happened against the backdrop of an outflow of assets from the Anchor protocol due to a decrease in the rate of return on deposits to 17.87%.
On May 10, the quotes of the asset again fell below $0.62. The fall continued on May 11, after which the LUNA cryptocurrency used to issue UST fell to $0.3.
Later, the head of Terraform Labs, Do Kwon, presented a plan to restore the UST price. Among the necessary steps, he called “the absorption of the offer of UST holders who want to get rid of the asset.”
On May 12, CoinDesk learned that Do Kwon was one of the anonymous co-founders of the failed algorithmic stablecoin Basis Cash.
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