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Buterin joins the list of Terra’s critics, saying that no genuine investment will reward investors with 20% ROI yearly.
Apparently, TerraForm Labs is not yet free from public scrutiny as Ethereum co-founder Vitalik Buterin joins the list of critics who have slammed the project’s business model.
The Ethereum boss noted in a recent Bloomberg report that no genuine investment will give investors a guaranteed 20% return yearly.
“There is no genuine investment that can get anywhere close to 20% returns per year.”
According to Buterin, the recent criticism of the decentralized finance (DeFi) financial mechanism is a welcome development, most especially for those cryptocurrency projects that are working relentlessly to optimize for “capital efficiency.”
“The greater level of scrutiny on defi financial mechanisms, especially those that try very hard to optimize for ‘capital efficiency’, is highly welcome. The greater acknowledgment that present performance is no guarantee of future returns (or even future lack-of-total-collapse) is even more welcome,” Buterin added in a statement published yesterday.
Other Cryptocurrency Experts Slam Terra
Recall that TerraForm Labs, the company behind the popular blockchain Terra, has come under heavy backlash from various cryptocurrency experts.
These crypto experts attributed the failure of the company’s ecosystem tokens to the project’s design as well as its huge staking rewards of 20% on the Anchor protocol.
Industry experts like Binance founder and Circle CEO, among others, have slammed Terra in recent times following the collapse of the project.
Changpeng “CZ” Zhao not only expressed disappointment at the way Terra handled the situation, but he also went a step further to halt trading for Terra ecosystem tokens UST and LUNA to keep its investors safe from incurring more losses.
Terra’s Move to Compensate Investors
Binance later resumed trading for both cryptocurrencies when Terra proposed its so-called perfect plan to make investors whole.
It is no longer news that Terra ecosystem tokens $LUNA and $UST shredded significant percentages of their values, with many investors incurring huge losses along the way.
Many investors were lured into adopting Terra tokens due to the mouth-watering rewards associated with staking the cryptocurrencies on the Anchor protocol.
Terra’s proposals would see the company create a new chain with new LUNA tokens and also burn the excess $UST reserve passed.
At the moment, investors are waiting for the official launch of Terra 2.0, which is scheduled to happen later today. As reported, several cryptocurrency exchanges have disclosed that they will be supporting the upcoming rebirth of the Terra network, and have taken significant steps yesterday to get things ready.
After Terra 2.0 launches, TerraForm Labs will commence the airdrop of new $LUNA tokens to existing holders in a bid to fully compensate them for their losses in the past weeks.