Pantera Capital didn’t suffer any significant losses from TerraUSD’s crash last Wednesday. The crypto VC company claims it has cashed out almost 80% of its investments well before the collapse. In fact, the firm made a huge profit along the way.
Pantera Capital, a prominent backer of Terraform Labs was able to cash out almost 80% of its Terra(LUNA) investment before TerraUSD (UST collapsed last week).
Pantera Capital’s co-chief investment officer Joey Krug told The Block that the market was “fairly frothy” over the past year. He said that he had exited most of his position prior to any of these events. “Roughly 80% in the past year, but quite slowly over time.”
Pantera Capital has invested at least twice into Terraform Labs. In January 2021, it supported its $25M round and in July 2021, it joined its $150M ecosystem fund round. Krug clarified after the publication of this article that Pantera’s LUNA investments were distinct from its investments in Terraform Labs. They took place in the summer 2020, shortly after LUNA’s debut on the market.
He stated that “we managed to reduce that position over time as the company became more profitable/large, in an effort to maintain a diversified portfolio.” We invested in LUNA initially because of the advances we saw in developer adoption, payments usage, as well as the wider ecosystem being built on Terra.
Pantera Capital made a substantial profit because it exited most its investments early. Paul Veradittakit of Pantera Capital said that the firm made $1.7 million into approximately $170 million.
Other venture capital firms backing Terraform are also reeling from losses, as Terra’s native LUNA token lost nearly all its value due to the UST crash.
Last week, the UST algorithmic stabilitycoin fell sharply to below 10 cents. This is far from its target price at $1. It trades at this level. LUNA trades at a fraction of a penny, compared to over $80 earlier in the month.
Pantera saw UST’s depegging last Wednesday and decided to sell more of its LUNA investments from the remaining 20%.
Krug stated that 2/3 of the total was sold at an average of $25.6. Krug stated that the remainder of that amount was staked via LUNAX, and therefore could not be sold. LunaX by Stader Labs is a liquid stake token.
Promotions Anchor
Veradittakit encouraged investing in Terra-based, decentralized finance platform Anchor. This platform has also lost nearly all its customer funds to the UST collapse.
According to data from DeFi Llama, Anchor’s total value locked has dropped from more than $16 billion prior to the UST crash down to just over $150 million now.
Veradittakit called Anchor a high-fixed interest rate “savings” account.
“20% Annual Percentage Yield [APY] “A fixed-income, low risk financial instrument with returns as high Anchor’s is truly amazing,” Veradittakit said in Medium in April 2021.
Anchor offered UST depositors a 20% APY. Anchor contributors recently proposed cutting the APY by 4% to address the UST crisis. This was to increase its yield reserves.
The UST failure had a devastating impact on the Terra ecosystem. Terraform is trying to rectify the situation. Do Kwon, CEO of Terraform Labs, has proposed a plan fork Terra in order to create a new cryptocurrency.
At 7:30 AM, the fork proposal went online. ET Wednesday. It had more than 84 million LUNA voting for it, and over 9 million against at the time of writing. To pass, the vote must be supported by 188 million LUNA.
