{"id":449962,"date":"2022-05-20T07:53:13","date_gmt":"2022-05-20T04:53:13","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/tether-cto-terra-wasnt-a-rug-pull-it-was-a-poorly-designed-castle-of-cards\/"},"modified":"2022-05-20T07:53:13","modified_gmt":"2022-05-20T04:53:13","slug":"tether-cto-terra-wasnt-a-rug-pull-it-was-a-poorly-designed-castle-of-cards","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/tether-cto-terra-wasnt-a-rug-pull-it-was-a-poorly-designed-castle-of-cards\/","title":{"rendered":"# Tether CTO: Terra wasn\u2019t a rug pull, it was a poorly designed \u2018castle of cards\u2019"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a36ea3c7b2ca\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a36ea3c7b2ca\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/tether-cto-terra-wasnt-a-rug-pull-it-was-a-poorly-designed-castle-of-cards\/#%E2%80%9D_Tether_CTO_Terra_wasnt_a_rug_pull_it_was_a_poorly_designed_%E2%80%98castle_of_cards_%E2%80%9C\" >&#8221; Tether CTO: Terra wasn\u2019t a rug pull, it was a poorly designed \u2018castle of cards\u2019 &#8220;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Tether_CTO_Terra_wasnt_a_rug_pull_it_was_a_poorly_designed_%E2%80%98castle_of_cards_%E2%80%9C\"><\/span>&#8221; Tether CTO: Terra wasn\u2019t a rug pull, it was a poorly designed \u2018castle of cards\u2019 &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDUvYTk1ZDZmYmUtOThmOS00NTZhLTlmNTEtNWQ4MzM0ZTU5Mjk4LmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-2a0745c6>Tether and Bitfinex CTO Paolo Ardoino said that the Terra (LUNA) project was not intended to be a rug pull, but was simply \u201cpoorly designed.\u201d <\/p>\n<p>Speaking on the Terra ecosystem\u2019s market-shattering crash, Ardoino likened its algorithmic stablecoin TerraUSD (UST) to a \u201ccastle of cards\u201d that was due to fall at any time. <\/p>\n<p>Many in the crypto community have highlighted a long list of dubious comments\/actions from beleaguered Terraform Labs founder Do Kwon that raise questions about his actions. It has also been <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/protos.com\/basis-cash-the-failed-algorithmic-stablecoin-do-kwon-didnt-learn-from\/\">reported<\/a> that Kwon also worked on a previously failed algo-stablecoin project dubbed \u201cBasis Cash.\u201d<\/p>\n<p>Ardoino made the comments during an <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>earance on the Reimagine Unplugged podcast this week, from <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/REIMAGINE_2021\">Reimagine<\/a>, a <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a> company that focuses on Web3 content and events. The CTO stated that a big problem was with Kwon\u2019s misguided sense of self belief:<\/p>\n<blockquote><p>\u201cI don&#8217;t know Do Kwon. But let&#8217;s give him the benefit of the doubt. He created this project with arrogance and with thinking that he was right and many were supporting him, of course, probably for economic reasons, but was not per se, a rug pull right, it was a project that was poorly designed as many projects are poorly designed.\u201d<\/p><\/blockquote>\n<p>\u201cThat there was like a castle of cards and it could fall down, but of course he couldn&#8217;t say it, because otherwise it would have fallen down much faster And again, it was clear to me, it was clear to many that I know that it was a bad idea,\u201d he added. <\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">CTO <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/Tether_to?ref_src=twsrc%5Etfw\">@Tether_to<\/a>, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/paoloardoino?ref_src=twsrc%5Etfw\">@paoloardoino<\/a> on <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/search?q=%24UST&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$UST<\/a>:<\/p>\n<p>\u201cIt&#8217;s all fun and <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/game\/\" data-internallinksmanager029f6b8e52c=\"7\" title=\"Game\" target=\"_blank\" rel=\"noopener\">game<\/a>s until you are a 10 billion stablecoin. And then it becomes much harder the faster you grow, the more you grow, right, because if you are a stablecoin, especially an algorithmic stablecoin..&#8221; <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/UNuvNhZoP9\">https:\/\/t.co\/UNuvNhZoP9<\/a><\/p>\n<p>\u2014 REIMAGINE &#8211; Web3 Events and Media (@REIMAGINE_2021) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/REIMAGINE_2021\/status\/1526989747670765568?ref_src=twsrc%5Etfw\">May 18, 2022<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>The CTO went on to state the UST had become too big to maintain its peg, as its collateralization (primarily in Bitcoin at the time as it attempted to build its reserves) was not large enough to support the stablecoin but was still \u201cbig enough to crash the market even further.\u201d<\/p>\n<p>\u201cThey were basically in a cascade situation where they had to defend the peg so they have to sell the collateral and selling the collateral was causing additional crashes and these additional crashes were pushing them to sell more or collateral and so on and so forth,\u201d he said. <\/p>\n<p>Questioned on what the regulatory landscape for stablecoins could look like moving forward, Ardoino suggested that policymakers first need to clearly define the difference between stablecoins fully backed by assets as opposed to those primarily backed by algorithms: <\/p>\n<blockquote><p>\u201cI believe that the first thing that needs to happen is proper categorization of stablecoins so right now, Terra UST is an algorithm stablecoin, while Tether is a centralized stablecoin. So two different beasts with two different assurances, two different backings and so on.\u201d<\/p><\/blockquote>\n<p><em><strong>Related: <\/strong><\/em><strong><em>Was Terra\u2019s UST cataclysm the canary in the algorithmic stablecoin coal mine?<\/em><\/strong><\/p>\n<p>Cointelegraph reported earlier today that Tether posted a 17% decrease in commercial paper holdings backing its USDT stablecoin reserves in Q1. The firm also emphasized that its stablecoin was &#8220;fully backed\u201d with $82 billion in reserve as part of its legally required reporting as a result of the $18.5 million settlement with the Office of the New York Attorney <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">General<\/a> from January 2021. <\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/p>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/tether-cto-terra-wasn-t-a-rug-pull-it-was-a-poorly-designed-castle-of-cards\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Tether CTO: Terra wasn\u2019t a rug pull, it was a poorly designed \u2018castle of cards\u2019 &#8220; Tether and Bitfinex CTO Paolo Ardoino said that the Terra (LUNA) project was not intended to be a rug pull, but was simply \u201cpoorly designed.\u201d Speaking on the Terra ecosystem\u2019s market-shattering crash, Ardoino likened its algorithmic stablecoin TerraUSD&#8230;<\/p>\n","protected":false},"author":1,"featured_media":449963,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDUvYTk1ZDZmYmUtOThmOS00NTZhLTlmNTEtNWQ4MzM0ZTU5Mjk4LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74881,74894,75493,122378,36041],"class_list":["post-449962","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitfinex","tag-blockchain","tag-stablecoin","tag-terra","tag-tether"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/449962","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=449962"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/449962\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/449963"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=449962"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=449962"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=449962"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}