TBW Premium #5: the future of Sorare
Published on May 12, 2022
Read all about The Big Whale's fifth Premium newsletter.
May 12, 2022
Hello Whales, and welcome to the newbies who've picked the right week to join us in the Web3 deep end 👋
Before we let you dive in, we wanted to thank Julien, a founding subscriber who will recognise himself. Thanks to him, The Big Whale is going to be even more successful in the coming months.
THE BIG SPLASH
Stress test 😱
A shock, an earthquake, a blast... Words fail this morning to describe what is happening to the Terra project. In the space of a few days, the project's stablecoin (UST) and token (Luna) have respectively lost their parity with the dollar and more than 99% of their value. In total, more than 30 billion dollars went up in smoke.
Where does the problem come from? While it's difficult to point to a specific reason, what is certain is that the UST stablecoin, the third largest on the market until a few days ago, played a major role in this industrial crash. As we explained to you last week in our report on stablecoins, algorithmic projects are particularly innovative, and therefore successful. But they are also much riskier than others (centralised or decentralised).
Terra founder Do Kwon explained on Twitter on Wednesday that he had a plan to successfully restore the system and get the Luna holders back afloat, at least in part. Do Kwon's highly technical 'solution' did not arouse blissful enthusiasm. More than stability, it is confidence in the project that is likely to be the most complicated to bring back.