The Terra collapse cost the blockchain company Hashed $3.5 billion in losses, according to on-chain data. In the wake of the incident, Delphi Digital also could have lost up to 13% of its assets — the equivalent of the peak value of the LUNA tokens.
Delphi Digital executives acknowledged concerns about the design of UST and LUNA, but believed that LFG with its reserve fund could stave off the “unthinkable.”
“We miscalculated the risk of the death spiral. Over the past week we have had to sweat it out because of this, and we earned it. The criticism is fair, and we accept it,”, the firm wrote.
Delphi Ventures began by buying LUNA in the first quarter of 2021, at 0.5% of NAV at the time. The stake grew as the asset appreciated. In February 2022 the firm invested $10m in LFG. Now, having not sold a single coin, Delphi Digital is obliged to reflect a “large unrealised loss” in its reporting.
“Unfortunately, the reserves [LFG] did not grow quickly enough relative to UST’s supply. Coupled with the decline in Bitcoin’s price, the liability burden proved too great to defend.”, the company explained.
Hashed participated in a $25 million Terra investment round in 2021.
According to on-chain data, the startup had subsequently staked 27 million LUNA, 9.7 million LUNA and 13.2 million LUNA. Taken together, these losses total about $3.5 billion, according to CoinDesk.
In discussions with the publication, representatives said they remained financially sound and that there was no material impact on Hashed Ventures.
In South Korea, where Terra had been popular, the project counted around 200,000 investors, according to Yonhap.
The local Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) have asked crypto exchange operators for information about transactions related to TerraUSD and LUNA.
Earlier, Pantera Capital disclosed that it had closed about 80% of its Terra ecosystem token position prior to the project’s collapse.
Forbes later called the collapse of the project the “fifth reboot” of the crypto market.
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