DeFi projects abandon Terra ecosystem after Terra crash

[Photo by Yonhap]

Korean IT companies are pulling out their decentralized finance (DeFi) blockchain-backed projects from the Terra ecosystem upon the stablecoin’s collapse, raising concerns for additional investor losses from their closures.

THORChain (Rune), a DeFi project where investors can deposit Luna and its sister stablecoin TerraUSD (UST) and collect interest, has suspended withdrawal in line with Luna blockchain’s temporary shutdown. THORChain’s deposit is estimated at 250 billion won ($196 million) including a chunk of Korean investors’ money.

THORChain is not alone in abandoning the Terra’s ecosystem following the downfall of the digital tokens invented by a Korean national.

Com2us, a Korean video game developer operating blockchain game platform, last Friday announced it was switching its mainnet from Terra’s as it stopped creating new blocks. Mainnet is a live blockchain for transferring a digital currency from a sender to a recipient.

CoinWalk, running a move-to-earn app that allows users to earn money by engaging in routine physical activities, also decided to transfer its mainnet.

Do Kwon, co-founder of stablecoins Luna and TerraUSD, on Monday proposed to hard fork Terra to revive the ecosystem. His plan is to abandon the algorithmic stablecoin and launch a new cryptocurrency in place of Luna. It is Kwon’s second rescue plan since Terra’s crash late last week. He previously proposed to restart the Terra blockchain network by distributing 1 billion new tokens to TerraUSD and Luna holders. But his proposal has met with pessimistic response from investors.

Luna is a digital token created by Kwon. It is tied to TerraUSD, a stablecoin designed to be pegged one-to-one with the U.S. dollar.

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