Avalanche creator Emin Gün Sirer, in a recent interview, compared the seriousness of the Terra crash to the Mt. Gox breach. He is concerned that an incident like this may lead to more regulatory scrutiny. Earlier this month, the Terra ecosystem collapsed, with the LUNA token plunging to zero after the UST stablecoin was de-pegged. After a catastrophic attack, Mt. Gox, the largest bitcoin exchange in 2010, went bankrupt in February 2014, triggering a dramatic decline in the price of bitcoin.
He also confirms that Avalanche has suffered from LUNA’s rapid expansion since it was garnering a lot of money. The success of LUNA spawned a slew of imitators eager to follow in its footsteps. Avalanche formed a collaboration with Terra, which proved to be “obviously problematic.” As a result, he concedes that the Avalanche Foundation has lost “some money.” In the broad scheme of things, he maintained, it was not an issue for the foundation.
The LFG now 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.
