The turbulence caused by Terra’s flagship stablecoin UST is being discussed at the world’s biggest business tables.
The collapse of the much-hyped cryptocurrencies of the Terra ecosystem devastated many investors, but not the investment firms that cashed out right before it all came crashing down.
There are many lessons to learn from the failed project as retail traders grapple with devastating losses. Ethereum’s co-founder Gavin Wood said that people should pay more attention.
- At the backdrop of the World Economic Forum in the Swiss Alpine resort of Davos, the executive said,
“I would hope that people pay more attention to what is belying the currency name when they get involved in a community, ecosystem, economy.”
- In the interview, Wood also said that the internet has no real concept of legality because it is “something that is determined by sovereign nations.”
- Observing the market-wide rout, Wood said that “technology cannot prevent people from making mistakes but can help those who want to understand better the facts of the world, and what they’re buying.”
- LUNA’s crash may have gravely exacerbated the declines in the cryptocurrency market this year, but many blockchain companies are breaking stereotypes at the ongoing world economic forum.
- Web3 is being thrust into the limelight despite the legacy finance world’s apparent contempt for the digital asset industry.
- With crypto being a rather hot topic following TerraUSD’s at the world’s biggest business tables, International Monetary Fund (IMF) Managing Director Kristalina Georgieva hinted at the algorithmic stablecoin TerraUSD and sister token LUNA and said that stablecoins not backed by assets are a pyramid scheme.
- During the panel discussion at WEF, Georgieva said,
“When we look at stablecoins, this is the area where the big mess happened. If a stablecoin is backed with assets, one to one, it is stable. When it is not backed with assets, but it is promised to deliver 20% return, it’s a pyramid.”
Featured Image Courtesy of Techie Gamers