Delphi Digital explains how LUNA-UST Fiasco harmed the company.


The upheaval in the Terra ecosystem last week wiped out nearly $40 billion from the crypto market, with UST and LUNA investors (both retail and investment firms) suffering significant losses.

While those impacted by the conflict are looking for ways to proceed or take legal action against Terra’s Do Kwon, leading crypto research and investment firm Delphi Digital is looking at how LUNA-UST’s failures have made their investments pointless. explained in detail.

Worst thing since Mt Gox

at official post Earlier this week, Delphi noted that Terra’s crash was “the most catastrophic” in the crypto industry since Mt Gox, the vanished Bitcoin exchange that lost 850,000 BTC to hackers in 2014.

Delphi said he is a big fan of the Terra ecosystem, but has always had concerns about the structure of UST and LUNA. However, the company believed that the significant reserves held by the Luna Foundation Guard (LFG) would prevent the project from collapsing.

“We always knew that something like this was possible, and while we tried to highlight the dangers of systems like this in our research and public commentary, the fact is that we miscalculated the risk that a ‘spiral of death’ event would come to fruition. We’ve been heating up on this a bit over the past week and we deserve it. Criticism is fair and we accept it,” Delphi wrote.

Delphi suffered large unrealized losses.

The crypto investment firm detailed how the Terra crash affected various arms. The venture capital arm, Delphi Ventures Master Fund, noted that in the first quarter of 2021 it had purchased a small amount of LUNA equivalent to 0.5% of its net asset value (NAV).

It gradually increased its exposure to LUNA and other Terra-native assets, including a $10 million investment in LFG’s funding round in February. Delphi said it did not sell LUNA during the crash and is currently in “massive unrealized losses.”

Delphi Labs, the research and development division of the company worst hit, has spent several months in a joint venture to build the Terra-based protocol Astroport and Mars. Delphi Labs has received grants of 30,000 LUNA and 466,666 UST from Terraform Labs to support their work, both of which are still in stock.

learn from lessons

“For the future, I want to make big investments in Terra, learn lessons from failures and make the right choices about where to focus my efforts. We’ve put together a cross-team of the smartest people across Research and Labs and will take the time to evaluate all possible options and make the right long-term decisions.”

Delphi noted that while the latest Terra saga has had a major impact on its balance sheet, it is rebounding with new projects and making moves to make a positive impact on the industry.

“Anyone who knows us as a business and as individuals knows how heartbreaking it is to see a space fighting hard to retreat after an event like this. We are committed to doing everything we can to make a positive impact on cryptocurrencies and the world. We’ve always said that actions speak louder than words, so we’ll let our hard work and hard work say what comes next,” the company concluded.

$60 million lost in avalanche

Meanwhile, Delphi Digital isn’t the only crypto company to report large unrealized losses in the wake of Terra’s downfall.

Emin Gün Sirer, creator of the Avalanche blockchain, said the project has around $60 million tied to Terra. In April, Terraform Labs announced a partnership with Avalanche for a $100 million token swap to increase its UST holdings.

Special Offer (Sponsorship)
Binance Free $100 (Exclusive): Register Using This Link and Get $100 Free & 10% Off Fee on Your First Month of Binance Futures (hatchet).

PrimeXBT Special Offer: Use this link to register and enter your POTATO50 code to receive a deposit of up to $7,000.

Leave a Comment