Apollo DAO to close vaults on Terra Classic

September 14, 2022 Coin Telegraph

Apollo DAO

The protocol's TVL has plunged from around $200 million in September 2021 to less than $125K.

Around the same time that a South Korean court issued an arrest warrant for Terra co-founder Do Kwon, Apollo DAO, a decentralized autonomous organization building on the Terra blockchain, said it was closing down its vaults on Terra Classic (LUNC) — formerly Terra (LUNA). The project's developers wrote:

"Since the collapse of Terra, Apollo has continued to maintain its LP [Liquidity Provider] vaults on Terra Classic; however, due to the low return and high level of required maintenance, it no longer makes sense to support the Terra Classic network."

Apollo DAO, comprised of over 10,000 tokenholders, built its vaults primarily for trading the Terra USD (USTC) stablecoin and Terra Luna (LUNC) token pairs. Both tokens have plunged drastically in value since May, and co-founder Do Kwon is currently wanted in South Korea for allegedly violating the country's capital market laws. In addition, project developers explained that the new Terra proposal to tax 1.2% of every on-chain LUNC transaction would have been too difficult to implement on its platform without substantial capital.

"We will continue to assess the viability of relaunching our vaults on Terra Classic; however, we would like these to be fully designed around the requirements of Terra Classic to ensure a greater product market fit."

Apollo DAO says it is focusing its future on liquid staking and developing the Apollo Safe on various Cosmos chains. At its launch last September, the total value locked, or TVL, on Apollo DAO hit a peak of around $200 million. At the publication, Apollo DAO's TVL has fallen to less than $125,000. Users are encouraged to withdraw any remaining funds before the launch of the novel Terra tax proposal.

CoinShares reports $21.7M loss tied to Terra implosion

August 2, 2022 Coin Telegraph

CoinShares reports .7M loss tied to Terra implosion

Coin Telegraph

The firm's book-making took a huge hit after being exposed to the TerraUSD collapse.

On Tuesday, European cryptocurrency investment firm CoinShares posted its interim Q2 2022 results. Compared to the prior year's quarter, the firm's revenue declined from 19.6 million pounds ($23.89 million) to 14.2 million pounds ($17.31 million). At the same time, its net income fell from 26.6 million pounds ($32.42 million) in Q1 2021 to 0.1 million pounds ($0.12 million).

CoinShares explained that the losses were largely tied to its exposure to the Terra (LUNA) — now called Terra Classic (LUNC) — ecosystem, which collapsed in May of this year:

"While our Asset Management business continued to generate solid profit, the Capital Markets business experienced a one-off loss of £17.7 million following the de-pegging of Terra Luna. The financial impact of this episode, despite being relatively small when compared to the losses incurred by other players in our industry, had a material impact on our quarter."

Coinshare Capital Markets typically does not take directional positions and was not directly exposed to the Terra Luna collapse. However, at the time of the incident, the firm was carrying a book linked to the TerraUSD stablecoin, resulting in an exceptional loss.

CoinShares CEO Jean-Marie Mognetti has nevertheless expressed optimism about the firm's future operations, saying:

"In light of the market turmoil, we have reviewed our risk profile and moved into a more defensive mode. CoinShares has sufficient resources to navigate the markets during this volatile time thanks to an effective strategy, a robust balance sheet, and a seasoned, world-class team."

For its next steps, CoinShares plans to uplist into the Nasdaq Stockholm Main Market after gaining an Alternative Investment Fund Manager license. During the second quarter, CoinShares launched five new physical products, including CoinShares Physical FTX Token, CoinShares Physical Chainlink, CoinShares Physical Uniswap, CoinShares Physical Staked Polygon and CoinShares Physical Staked Cosmos. The firm possessed 220.8 million pounds ($269.15 million) in net assets at the end of Q2.

*The price of TerraUSD in the past year*. *Source: CoinGecko*

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Binance Staking completes initial phase of Terra 2.0 airdrop as ecosystem issues persist

May 31, 2022 Coin Telegraph

Airdrop

About 70% of tokens are held in escrow and will be vested starting later this year.

On Tuesday, cryptocurrency exchange Binance said it completed the first stage of airdropping new Terra Luna (LUNA) tokens to holders of Terra Luna Classic (LUNC), TerraUSD (USTC) and AnchorUST (aUST).

The distribution was based on "pre-attack" and "post-attack" snapshots of token holders taken at LUNC block height 7,544,910 at 14:59:37 on May 7, 2022 UTC and block height 7,790,000 at 16:38:08 on Thursday, respectively. As told by Binance, users received new LUNA tokens based on the compensation scheme outlined by Terra developers:

Pre-Attack 1 aUST = 0.01827712143 LUNA
Pre-Attack 1 LUNC = 1.034735071 LUNA
Post-Attack 1 USTC = 0.02354800084 LUNA
Post-Attack 1 LUNC = 0.000015307927 LUNA

At the pre-attack time, one aUST had a value of $1.24 while one LUNC was worth approximately $75. At the post-attack time, one USTC and one LUNC were worth $0.0632 and $0.0001434, respectively. At the time of publication, each LUNA token is worth $9.25. Regardless of timestamp, approximately 30% of LUNA tokens were distributed on the spot, while the remaining 70% will be distributed monthly in a vesting schedule starting later this year, in accordance with Terra's reformation plan.

Additionally, users who staked their USTC via Binance Staking pre-attack were also eligible for the airdrop. As it turns out, users' USTC assets were staked on-chain, with aUST as the yield-bearing token. Binance launched USTC staking only a month prior and ended the program shortly after the implosion of the Terra Luna Classic ecosystem.

Despite the successful airdrop on Binance, it appears that the token distribution did not go as smoothly as expected for crypto enthusiasts holding Terra assets in self-custodial wallets. Terra developers said that some users received less LUNA than expected from the airdrop and are actively working on a solution. The same day, a LUNC pricing error appears to have caused another exploit that potentially drained Mirror protocol, which is built on Terra, of all its funds.

UK government proposes additional safeguards against stablecoin failure risks

May 31, 2022 Coin Telegraph

Blockchain

The Treasury wants to empower the Financial Market Infrastructure Special Administration Regime to oversee the safe return of customer funds in the event of a stablecoin collapse.

In a new consultation paper published on Tuesday, the Treasury of the United Kingdom proposed a new set of regulatory changes for the stablecoin industry.

In its report, the Treasury highlighted the importance of stablecoins in innovation but also noted their ability to impact financial stability should systemic failures occur. Specifically, the Treasury called for:

The appointment of the country's Financial Market Infrastructure Special Administration Regime (FMI SAR) as the primary entity to address the potential systemic failure of digital settlement asset (DSA) firms. DSAs include, but are not limited to, stablecoin issuers, wallet providers and third-party payment providers.
The expansion of the FMI SAR's mandate to include and oversee the timely return or transfer of customers' funds in the event of failure of a DSA firm.
The assignment of greater powers to the Bank of England to direct administrators and create regulations in support of the FMI SAR.
A requirement that the Bank of England consult with the nation's Financial Conduct Authority prior to seeking an administration order or directing administrators in the event of regulatory overlap.

Among other items, the Treasury cites the possibility of "a large numbers of individuals losing access to funds and assets they have chosen to hold as DSAs" as a critical factor for the proposed regulatory changes. By enlarging the FMI SAR's mandate, "it would allow administrators to take in to account the return of customer funds and private keys as well as continuity of service," the report says.

The proposed regulations were tabled weeks after the implosion of stablecoin ecosystem Terra Luna, which wiped out nearly $60 billion in investors' capital. Anonymous attackers exploited structural design flaws within the (now) Terra Luna Classic token and TerraUSD stablecoin, resulting in a death spiral that depegged TerraUSD and sent its sister token to practically zero. As part of the consultation process, individuals and stakeholders have until August 2 to send their input regarding the proposed regulatory changes to the Treasury.

terra (LUNA)