Crypto news

Hashed lost $3.5 billion to Terra

Terra’s collapse cost Hashed a blockchain company $3.5 billion in losses, according to onchain data. Delphi Digital, an investment firm, could also have lost up to 13% of its assets amid the incident, the equivalent of the peak value of LUNA tokens purchased.

Delphi Digital officials admitted they had concerns about the UST and LUNA design, but had faith in LFG’s ability, with its reserve fund, to prevent the “unthinkable.”

“We miscalculated the ‘death spiral’ risk. We’ve had a lot of sweat over this last week, and we deserve it. The criticism is fair and we accept it,” the firm wrote.

Delphi Ventures started by buying LUNA in the first quarter of 2021 at 0.5% of NAV at the time. The position increased as the asset grew. In February 2022, the firm invested $10 million in LFG. Now, with no coins to sell, Delphi Digital is forced to report a “large unrealized loss.”

“Unfortunately, [LFG’s] reserves were not growing fast enough compared to UST’s supply. Combined with the drop in bitcoin’s value, the liability overhang was prohibitive to protect,” the company explained.

As a reminder, Pantera Capital managed to withdraw its investment from the Terra project.

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