Vaneck, which was caught by the VAT collapse on the wrong foot, doubts do Kwon's rescue plan

Vaneck, which was caught by the VAT collapse on the wrong foot, doubts do Kwon's rescue plan

A proposal that aims to stop the death spiral of Terra's algorithmic stable coin VAT - or at least slow down - is over. But whether it will really work remains doubtful.

Ust broke dramatically this week and, according to Coingecko, used to reach a low of $ 0.298. Stablecoin had more or less retained its one-to-one bond on the US dollar since it was introduced in October 2020, without a few hiccups.

The neighboring cryptocurrency of the token, Luna, crashed even more last week - from $ 82 to a little more than $ 2 at the time of printing, a breathtaking, historical slump of 97 %. The Fallout has heavily burdened the entire Terra ecosystem-and digital assets are very important.

and so, Terra-Governance proposal # 1161 It enables the protocol to print luna tokens worth up to $ 1.2 billion, compared to $ 293 million.

The idea? Printing more luna tokens for retailers for sale for VAT will "absorb the stable coin offer that wants to get out before VAT can start with the new bond". tweeted Do Kwon, founder of Terrafor And his "crazy" or Luna investors promised that a "rescue plan" was in the works.

References to victims of retail transactions are widely obvious, but Wall Street stars like Vaneck have also taken their lumps. Matthew Sigel, head of the company's digital asset research, said, Vaneck's cryptofocussed smart contract Leader Fund hold Terra token because the binding of VAT has been solved.

The fund aims to reach or beat an index of "Layer One" cryptocurrencies, and benefited from $ 10 to over $ 100 last year. However, the share price dropped this week, although the cryptoma markets are declining.

But collapsed as a luna and VAT, Vaneck had to make a choice: reduce losses and sell his stock or buy even more about the dollar costing average for a possible upswing.

The fund, which avert a catastrophe, was sold when VAT reached $ 0.90, Sigel told Blockworks.

But more than $ 15 billion of collateral have fled during the collapse from the decentralized applications of Terra based on Anchor. Now it is only $ 2.39 billion - a proof that trust in VAT and Luna has evaporated with the purchase interest.

A free anchor proposal Last week, submitted to its minimum interest from 18 % to 3.5 % Lower to ensure that Anchor retains sufficient reserves to continue to release a return. The minutes defended the sky-high payment as necessary to attract users in their early days-similar to tech startups that burn money for marketing to gain market shares-but critics have long argued that it is not sustainable and mostly no longer needed.