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Pantera Capital, one of the well-known sponsors of Terraform Labs, cashed out nearly 80% of its investment in Terra (LUNA) long before TerraUSD (UST) collapsed last week.
“The market has been pretty turbulent over the last year and so we closed most of our position before any of that happened,” said Joey Krug, co-director of investments at Pantera Capital. “About 80% over the last year, pretty gradually.”
Pantera Capital has invested in Terraform Labs at least twice: once supporting a $25 million funding round in January 2021, and then joining a $150 million ecosystem fund round in July 2021.
Because Pantera withdrew from most of its investment early on, the firm said it made significant profits. According to Pantera Capital partner Paul Veraditakit, the firm has turned $1.7 million into about $170 million.
Meanwhile, other venture capital firms that have backed Terraform are incurring losses as the native Terra LUNA token has lost almost all of its value due to the collapse of the UST.
Last week, the UST algorithmic stablecoin fell sharply to below 10 cents, a far cry from its $1 price target. It’s still trading at that level. Meanwhile, LUNA is currently trading below a cent, up from more than $80 earlier this month.
When Pantera noticed the de-peging of the UST last week, it sold more of its assets to LUNA of the remaining 20% of the investment.
“We got 2/3 of that amount at an average price of $25.6,” Krug said. “The rest was delivered through LUNAX and therefore cannot be sold.” LunaX is a liquid token from Stader Labs.
Veraditakit was promoting investments in Anchor’s decentralized financial platform based on Terra, which also lost almost all of its clients’ funds due to the collapse of the UST.
According to DeFi Llama, the total blocked value of Anchor (TVL) fell from more than $16 billion before the collapse of the UST, to just over $150 million.
Veraditakit called Anchor a “savings account” with a high “fixed” interest rate.
«20% APY [годовая процентная доходность]. A fixed income and low-risk financial instrument with the same high return as Anchor’s is truly incredible,” Veradittakit said in an April 2021 Medium blog post.
Anchor offered ust depositors 20% per annum. Due to the UST crisis, Anchor savers recently proposed lowering the APY to an average of 4% to make their yield reserves more resilient.
The failure of UST had a domino effect on the Terra ecosystem. Meanwhile, Terraform hopes to rectify the situation. Terraform Labs CEO Do Kwon has been pushing a plan to fork Terra to create a new blockchain.
The fork proposal was published around 7:30 a.m. ET on Wednesday. 188 million LUNA is needed to pass the voting.
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