{"type":"rich","version":"1.0","provider_name":"Transistor","provider_url":"https://transistor.fm","author_name":"The Scoop","title":"Wintermute's CEO on why Terra's blow up was inevitable, and what happens next","html":"","width":"100%","height":180,"duration":2836,"description":"The demise of the Terra blockchain sent a ripple effect throughout the crypto ecosystem last week, as the market absorbed over 80,000 BTC deployed in a failed attempt to keep the UST \"stablecoin\" pegged 1:1 with the US dollar.\n“If you’re a market maker and you don’t make money in those kinds of days, then yeah — you’re doing something wrong,” said Evgeny Gaevoy, CEO of Wintermute — an algorithmic crypto market maker with nearly $2 trillion in cumulative volume, according to the firm’s website.\nIn this episode of The Scoop, Evgeny Gaevoy recounts the Terra meltdown from a market maker’s perspective, and explains how future decentralized yield-bearing stablecoins can innovate where Terra's UST failed.\nAccording to Gaevoy, the 20% annualized yield promised to users who deposited UST into Terra’s Anchor Protocol was more debt than could be paid by the protocol’s revenue:\n“What was really wrong about LUNA is they had that 20% yield which was coming out of nowhere,” he said. “It was backed by future growth of the protocol, which could have happened, but didn’t.”\nAlthough UST has proven to be a failure, Gaevoy thinks an interest-bearing stablecoin is possible, as long as the promised yield is equivalent to the issuing protocol’s revenue. \nTo illustrate, Gaevoy proposed a hypothetical protocol that brings in $500,000 a year in revenue and seeks to raise $5 million through offering interest-bearing stablecoins:\n“Let's say they have cash flows of $500,000 per year — they can issue $5 million worth of stablecoins with 10% yield, and then suddenly they have $5 million and they can pay this yield because they actually generate this income. So they can offset these interest payments with what they generate from their own protocol — that model can work, and that model I think is really interesting to explore for a lot of protocols.”\nWintermute is in the process of launching its own stablecoin, according to Gaevoy, who said the firm “just needs to iron out the regulatory...","thumbnail_url":"https://img.transistorcdn.com/kC6kzNjgr18dm0FmBfV_f9xccAkjj-QXoCJmVNlNtrU/rs:fill:0:0:1/w:400/h:400/q:60/mb:500000/aHR0cHM6Ly9pbWct/dXBsb2FkLXByb2R1/Y3Rpb24udHJhbnNp/c3Rvci5mbS8xZmIz/N2E5MmRmMzJjOTU3/OTNhYjJkYzcxZTlj/MTU2Yi5qcGc.webp","thumbnail_width":300,"thumbnail_height":300}