Pantera Capital Sold 80% Of Its LUNA Holdings Before The Crash
Pantera Capital, one of the Terraform Labs backers, cashed out close to 80% of its Terra (LUNA) holdings way before TerraUSD’s (UST) collapse last week.
Joey Krug, co-chief investment officer at Pantera Capital, commented:
“The market has been fairly frothy over the last year and thus we’d exited the majority of our position before any of this happened. Roughly 80% over the last year, fairly gradually over time.”
Pantera Capital made two known investments in Terraform Labs — the first was a part of $25 million round in January 2021 and then participating a $150 million ecosystem fund round in July 2021.
Krug clarified on twitter that Pantera’s LUNA investments were separate from its investments in Terraform Labs and took place in the summer of 2020 after LUNA’s market debut.
We managed that position down over time as it became increasingly profitable/large, in order to maintain a diversified portfolio. We initially invested in LUNA because of the progress we saw in developer adoption, the payments usage, and the broader ecosystem being built on Terra
“We managed that position down over time as it became increasingly profitable/large, in order to maintain a diversified portfolio. We initially invested in LUNA because of the progress we saw in developer adoption, the payments usage, and the broader ecosystem being built on Terra.”
According to Pantera, they had exited most of its investment early on, which generated a significant profit. Paul Veradittakit, partner at Pantera Capital firm, said that they turned $1.7 million into around $170 million.
Other venture capital firms that backed Terraform were not as lucky, and are reeling under losses since Terra’s native LUNA token has lost almost its entire value since the UST crash.
The UST algorithmic stablecoin de-pegged sharply last week to levels below 10 cents, far from its target price of $1. It is still trading at that level. Meanwhile, LUNA is currently trading at a fraction of a cent, from over $80 earlier this month.
When Pantera noticed UST’s de-pegging last week, it sold more of its LUNA holdings from the remaining 20% investment. Krug said:
“We got out of 2/3 of that at an average price of $25.6. The remainder of that was staked via LUNAX and so unable to be sold.”
The UST collapse had a massive domino effect on the Terra ecosystem. Meanwhile, Terraform is hoping to find a solution to the situation. Terraform Labs CEO Do Kwon has promoted a plan to fork Terra to create a new blockchain.
The fork proposal was published on Wednesday. At the time of writing, it had over 110 million votes in favor, with over 13 million against. The proposal needs 188 million votes to pass.
