Terra has met more expectations this year after setting multiple records across the crypto space, but the changes in events over the past few days have shaken the steady voyage of the DeFi chain for the first time. ..
Terra takes a break
In the last 48 hours, Terra has made some important strategic developments. The first of them is to increase the liquidity and usefulness of the native stablecoin TerraUSD (UST) throughout the ecosystem. Similarly, blockchain welcomed Evmos, the new Inter-Blockchain Communication Protocol (IBC) – Cosmos EVM compatible hub.
This will provide Terra with $ 3 million worth of incentives for seven different protocols and an additional $ 5 million worth of liquidity.
In addition to this, Terraform Labs has partnered with Outlier Ventures to launch the TerraBase Camp. Through this accelerator program, participants can access the resources of Outlier Ventures and Terraform to quickly track their growth. Each team of the six startups initially receives an investment of $ 125,000 and has the opportunity to earn an additional $ 250,000 with additional funding.
For the second largest DeFi chain, these developments are an opportunity to attract more developers and investors. However, the situation in the last 48 hours can make investors cautious.
First, Terra lost about $ 6 billion from TVL, down from $ 29 billion to $ 23 billion.
Terra TVL | Source: DeFi Llama – AMBCrypto
This was largely led by the Anchor Protocol, as the protocol changed the rate of return for the first time according to the dynamic rate of return program, reducing the APR from 19.4% to 18%.
This caused depositors to withdraw money from the protocol and Anchor lost $ 4 billion.
As a result, this has reduced the native token LUNA by 23.26% over the last two days.
LUNA price action | Source: TradingView – AMB Crypto
Terra investors don’t seem to be particularly happy with the DeFi chain, so it’s difficult to come back. Their disappointment is clearly visible on the chain, as this is the highest negative emotion pointed out by LUNA since November 2021.
Terra Investor Sentiment | Source: Santiment – AMB Crypto
In addition, risk-adjusted returns on assets of minus 4.19 are a serious concern for new investors.
LUNA Sharpe ratio | Source: Messari – AMB Crypto
Therefore, in the case of Terra, the widest range of support comes from returning depositors to Anchor. This helps recover lost locked values.
