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In the aftermath of Terra’s breakdown, the native LUNA token is swinging near zero in value, and UST is trading nothing close to its 1:1 peg with the US dollar.
A lot is happening, but Terraform Labs CEO Do Kwon remains convinced that he can still yet give the Terra blockchain, and deservedly so its community, a new era by birth away from the current Terra blockchain (to become Terra Classic).
Here are the latest developments:
TFL CEO shares burn address, insists he’s against token burns
While Do Kwon’s updated proposal succeeded in a scheduled vote, opposing parties have insisted on taking the token burn approach to deflating the supply of LUNA in circulation. As Kwon has already confirmed that LUNA minting was halted, the move is expected to recoup value for LUNA holders just as Binance CEO has held.
Succumbing to the pressure, Kwon published a burn address in a Twitter thread last Saturday in which he addressed a number of matters to do with transparency and information around the fall of LUNA. The Terra founder came out to clarify his standing on the matter of burning tokens.
He insisted that holders will only lose their token as it’s not assured that anything will happen, adding that he only published the address for “information purposes.”
Kwon is, however, opposed to the burn and advised caution for the uninitiated before starting a burn.
Terra is clear of tax obligations in Korea
With speculations around Terra spiking in recent days, part of the talk was that Terra owed the South Korean government up to $78 million in unpaid taxes.
Over the weekend, Do Kwon refuted such claims, clarifying that the firm had cleared its tax liabilities in Korea. He explained that Terraform Labs already complied with the said tax that followed an audit by South Korea’s National Tax Service (NTS), which saw crypto companies subscribe to the Korean tax code.
Coinbase Cloud winds down support for Terra
It is a long way back to recovery for Terra, but the current environment hampering efforts to rise again is making the task uphill.
Last Friday, Coinbase Cloud announced its halting support for the Terra ecosystem following conversations with the customers and the community. The Web3 infrastructure platform explained that it withdrew support for the Terra chain and clarified that it does not currently intend to support a Terra spin-off.
Delphi Digital gets the losses and takes the heat
Mid last week, independent crypto research firm Delphi Digital published a post-mortem assessment on the Terra disaster, in which it took all the blame for making a huge bet that turned sour. Delphi apologized, acknowledging that “you were right and we were wrong” on its decision to venture into Terra even while it remained conscious of the possible risks.
Under the Delphi Digital umbrella, Delphi Ventures was involved with Terra via the Delphi Ventures Master Fund, which kicked off with an investment of 0.5% of the net asset value (NAV) investment in Q1 2021. Delphi Labs had the most Terra exposure as it held a belief in the role decentralized money could play at the layer one network.
Delphi Digital did not specify how much it has since lost but says it made “a big bet on it, and it didn’t turn out as expected.” While it knew something akin to this was likely, it misestimated the risk of a death spiral and consequently suffered for it.
Sam is a financial content specialist with a keen interest in the blockchain space. He has worked with several firms and media outlets in the Finance and Cybersecurity fields.