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Tether and Bitfinex CTO Paolo Ardoino said that the Terra (LUNA) project was not intended to be a rug pull, but was simply “poorly designed.”
Speaking on the Terra ecosystem’s market-shattering crash, Ardoino likened its algorithmic stablecoin TerraUSD (UST) to a “castle of cards” that was due to fall at any time.
Many in the crypto community have highlighted a long list of dubious comments/actions from beleaguered Terraform Labs founder Do Kwon that raise questions about his actions. It has also been reported that Kwon also worked on a previously failed algo-stablecoin project dubbed “Basis Cash.”
Ardoino made the comments during an appearance on the Reimagine Unplugged podcast this week, from Reimagine, a media company that focuses on Web3 content and events. The CTO stated that a big problem was with Kwon’s misguided sense of self belief:
“I don't know Do Kwon. But let it have the benefit of the doubt. The CTO said one of the big problems was Kwon's false sense: I don't know Do Kwon.”
He created this project with arrogance and thinking that he was right and that many were supporting it, of course, probably for economic reasons.
CTO @Tether_to, @paoloardoino on $UST:
“It's all fun and games until you are a 10 billion stablecoin. Was not in itself, a right hand boost, it was a project that was poorly designed as many projects are poorly designed."it's fun and games till you're a stablecoin of 10 billion. https://t.co/UNuvNhZoP9
— REIMAGINE - Web3 Events and Media (@REIMAGINE_2021) May 18, 2022
CTO @Tether_to, @paoloardoino out of $UST:”
And then it gets much more difficult the faster you grow, the more you grow, right, because if you're a stablecoin, especially an algorithmic stablecoin."
Htgst://t. co/unuvnhzop9— reimagine — web3 events and media (@reimagine_2021) may 18, 2022the cto went on to state that the can had become too big to maintain its anchor, That his guarantee (mainly in bitcoin at the time as it attempted to build its reserves) was not large enough to support the stablecoin but was still “big enough to crash the market even further.”“they were basically in a cascade situation where they had to defend the peg so they have to sell the collateral and selling the collateral was causing additional crashes and these additional crashes were pushing them to sell more or collateral and so on and so forth,” he said.
There was some discussion about what the regulatory landscape for health care services might look like in the future, ardoino suggested that policy makers should first clearly define the difference between stability that is fully supported by assets versus those primarily supported by algorithms: 'I believe that the first thing that has to happen is a good categorization of stablecoins so now terra ust is a stablecoin algorithm, while tether is a centralised stablecoin.”
Related: Was Terra’s UST cataclysm the canary in the algorithmic stablecoin coal mine?
Cointelegraph reported earlier today that Tether posted a 17% decrease in commercial paper holdings backing its USDT stablecoin reserves in Q1. Cointelegraph reported earlier today that Tether posted a 17% decline in trading paper holdings supporting its stability reserves usdt in q1.
