Terra Is As Bad As Mt. Gox, According To Avalanche Founder
Alavanche founder Emin Gün Sirer compared the seriousness of the Terra crash to the Mt. Gox breach in a recent interview with Forbes. He is concerned that an incident like this may lead to increased regulatory scrutiny.
The Terra ecosystem collapsed earlier this month, with the LUNA token plunging to zero after the UST stablecoin was de-pegged. After a catastrophic attack, Mt. Gox, the largest crypto exchange at the time, went bankrupt in February 2014, causing a dramatic decline in the price of Bitcoin.
He confesses that at one point, Avalanche was suffocated by LUNA’s rapid growth because it was attracting a lot of money. The success of LUNA spawned a slew of imitators eager to follow in its footsteps.
After that, Avalanche formed a collaboration with Terra, which proved to be “clearly troublesome.”
As a result, he concedes that the Avalanche Foundation has lost “some money.” In the broad scheme of things, he stressed, it was not a problem for the foundation.
The LFG currently has around $60 million in its account. Even if it sold all of these coins at once, the sale would have little impact on the token’s price because its trading volume is substantially larger.
Terra has certified that its AVAX coins have not been sold
The Avalanche Foundation was well aware of the dangers of algorithmic stablecoins, but it opted to pursue the cooperation regardless because it could generate big results.
Terra founder Do Kwon linked the project’s demise to the infamous DAO breach, which caused the Ethereum network to face an existential crisis. The founder of Avalanche believes it is far more serious than the DAO attack.
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