VanEck, Wrong-footed by UST Collapse, Casts Doubt on Do Kwons Rescue Plan

– The Terra proposal seeks to increase the maximum value of printable LUNA tokens to $1.2 billion in order to allow arbitrage traders to absorb intense selling pressure and re-peg UST to its one-to-one tracking of the US dollar.
– If the proposal is passed, it is unclear whether it will actually be effective in halting the death spiral of Terras algorithmic stablecoin UST.
– VanEcks crypto-focused Smart Contract Leaders fund was holding Terra tokens as USTs peg unmoored, but the fund sold when UST hit $0.90.
– Widespread selling pressure led to rumors of a bailout, funded by large over-the-counter traders and other institutional players, such as Alameda Research and Jump Capital.
– A number of early Terraform Labs investors, including Binance Labs, Arca, and BlockTower, declined to comment on whether those bailout discussions took place.
– Terras alliance with Avalanche, as well as its diversification into Bitcoin, had raised hopes that consolidation among layer-1 blockchains would help fortify interoperabile blockchains for market downturns albeit perhaps not one of historic proportions.

Terra VanEck, Wrong-footed by UST Collapse, Casts Doubt on Do Kwons Rescue Plan
VanEck, Wrong-footed by UST Collapse, Casts Doubt on Do Kwons Rescue Plan 2

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