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VCs who were lucky enough to escape from the top of Luna

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Who made it out before LUNA crashed? LUNA opened the road to redemption?

Original title: "Some investors got rich before a popular stablecoin imploded, erasing $60 billion in value"

Original author: MacKenzie Sigalos

Original compilation: Moni, Odaily Planet Daily

Although the LUNA plunge caused most investors to suffer huge losses, some investment institutions are Before the market crashed, they made a fortune. According to the latest data, the profitable crypto venture capital institutions mainly include Pantera Capital, Hack VC, Galaxy Digital, and CMCC Global, a Hong Kong crypto venture capital supported by the Winklevoss brothers, the founders of Gemini Exchange. Pantera Capital's US$1.7 million investment in LUNA has achieved a 100-fold return. Hack VC and CMCC Global did not disclose the exact return, only revealing that they will exit early in December 2021 and March 2022, respectively.

Who made it out before LUNA crashed?

According to the data, the biggest winner in the LUNA flash crash may be Pantera Capital, an encrypted hedge fund that has achieved a return on investment of up to 100 times.

Joey Krug, Co-Chief Investment Officer of Pantera Capital, said they sold about 87% of their LUNA positions between January 2021 and April 2022, and again in May. 8% of the LUNA position was sold (at this point the market was in a crash), and another 5% of the LUNA position was "stuck". But even if their “stuck” LUNAs were worthless, based on the value of all those pre-sold positions, the crypto fund would have returned roughly $171 million on its initial investment in LUNAs.

However, something is unusual, because Pantera Capital CEO Dan Morehead was still "touting" LUNA in December 2021. On the CNBC show, he called LUNA his preferred altcoin, when LUNA rose by more than 15,800% in 2021.

In response, Joey Krug explained that LUNA was liquidated early because they wanted to do risk management and rebalance the fund:

“For most of the tokens we sell in 2021 and part of 2022, this is a very simple risk management reason, LUNA keeps becoming a larger and larger part of the fund, so we have to reduce Its risk, after all, in a hedge fund with strong liquidity, you cannot let a certain position share become too large.”

After entering May, Pantera Capital noticed that LUNA could no longer maintain the peg, so it decided to accelerate the sell-off. Joey Krug added:

“Usually when a stablecoin breaks its peg, it definitely takes a big hit. Although Pantera Capital holds more LUNA (rather than UST), the When UST is not trading under the peg, there is bound to be more LUNA generated dynamically, which reduces the overall value. So basically, you need to sell LUNA so that the value is not diluted.”

Another successful escape from the LUNA crash is Hong Kong venture capital firm CMCC Global, which is also the first seed round investor of Terraform Labs, the parent company of LUNA one. Martin Baumann, the founder of CMCC Global, revealed that they sold their shares in March 2022 due to concerns about the previous due diligence of LUNA, but he said that the selling of shares had nothing to do with the technology behind UST, and was mainly related to regulatory changes. How worried.

It is reported that CMCC Global cashed out when the price of LUNA was $100, but the agency stated that it would not comment on the returns or performance of individual investments.

Hack VC partner Rodney Yesep also did not respond to a request for comment on LUNA’s profitability figures, but he did say in a previous interview with the DeFi Decoded Podcast that Hack VC is Terra One of the seed round investors.

The most unexpected may be Galaxy Digital, an encrypted commercial bank founded by billionaire investor Mike Novogratz, because Mike Novogratz was once a "LUNA diehard" , He even tattooed a "LUNA" tattoo on his arm to express his support for the algorithm Stablecoin. However, the data will not lie - according to Galaxy Digital's first-quarter financial report data, the operation that gave it the largest contribution to the net realized income of its $355 million digital assets was the sale of LUNA.

Other main supporters of Terraform Labs include some well-known institutions and individuals in the field of venture capital, such as Lightspeed Venture Partners, Coinbase Ventures, Three Arrows Capital and Jump Crypto has also purchased LUNA, and it is unclear how these investment firms will perform in terms of return on investment.

Open the road to salvation?

Interestingly, Terra proponents have voted to get back on their feet, proposing to rebuild a new Terra blockchain and get rid of LUNA which caused the original project to crash Stablecoin, this may mean that institutional investors and retail investors have the opportunity to redeem their investment returns, especially for those investment institutions that have suffered major losses, the project restart may make up for the initial investment loss, which includes Delphi Digital and Hashed Ventures -

-After miscalculating the risk of a death spiral event, Delphi Digital admits it is "currently facing huge unrealized losses"

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-According to Coindesk related reports, Seoul-based Hashed Ventures lost more than $3.5 billion during the LUNA crash.

The Terra 2.0 proposal includes an airdrop plan to holders of the original LUNA (renamed "LUNA Classic") and UST Token. If the price of the new Token rises, those who suffer losses Investors may have the opportunity to receive redemption compensation. For crypto VCs who profited before LUNA crashed, are they willing to support the Terra fork?

The answer does not seem optimistic.

Joey Krug said: "Terra now has a new blockchain, and it looks like there will be a lot of Token airdrops, some of which will be released within a few years, Pantera Capital has projects in their portfolio that integrate with Terra and I would like to see community driven stuff succeed here, but we are a new chain agnostic fund.”

Martin Baumann also said that the CMCC Global Fund has decided not to make new investments in the Terra ecosystem.