Investing startup tells of its escape from crypto rout that ‘wrecked’ others

The section emphasizes how even cryptocurrency protocols designed to avoid the wild volatility of tokens that bitcoin has endured can end with the same, or even more serious, fluctuations in value.

It is not clear exactly why UST began to collapse; a leading theory is that it was sold heavily by a card seller, which led to it going out. What is clear is that there has been a global cryptocurrency route, with some tokens down 50 percent in recent months, making it easier for investors to lose faith in a project like UST and dump their tokens.


Josh Reyes, co-founder of a competing Australian-based crypto company called Minke, which offers alternatives to Anchor with different designs, says that UST’s failure was predictable. He believes that Anchor also offered an unsustainably high return of about 20 percent in an attempt to grow so large that it would achieve market dominance. Other decentralized finance projects, which are like code-controlled digital banks, offer returns based on the demand for the tokens they lend.

“We always knew this was not sustainable,” Reyes said of Anchor. “It will leave a black mark on the entire industry.”

Rachamim and Bilotta, two of the Tiiik founders, are not eager to speculate on what went wrong with UST. It was always meant to be just one of many options available in Tiiik, says Rachamim. The company will now take some time to find out what protocols it will offer next and its founders claim that the sector will play a key role in future finance.

“It will take months, we want to do this right,” says Bilotta.

Asked about a blog post that Reyes wrote and criticized UST and Luna without mentioning Tiiik, Bilotta says he does not think it referred to his company. “I’m a builder,” he says. “I do not have time for loose gossip.”

For his part, Reyes says the industry should be regulated.

“Many ordinary people were completely wrecked,” he says of the wider collapse of UST and Luna.

“I hope so [the regulators] come out with a scalpel rather than a sledgehammer because some of us actually make a big impact and do things right. ”

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