{"id":18632,"date":"2025-03-23T10:31:33","date_gmt":"2025-03-23T10:31:33","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=18632"},"modified":"2025-03-23T10:31:33","modified_gmt":"2025-03-23T10:31:33","slug":"sonic-unveils-high-yield-algorithmic-stablecoin-reigniting-terra-luna-ptsd","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=18632","title":{"rendered":"Sonic unveils high-yield algorithmic stablecoin, reigniting Terra-Luna \u2018PTSD\u2019"},"content":{"rendered":"
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\"Sonic<\/p>\n

The Sonic blockchain is working on the implementation of its yield-generating, algorithmic stablecoin despite fears over a potential collapse similar to the Terra-Luna meltdown that led to the industry\u2019s longest crypto winter.<\/p>\n

Algorithmic stablecoins employ<\/a> code-based mechanisms to ensure their price stability, as opposed to fiat stablecoins pegged directly to the value of the underlying currency.<\/p>\n

The Sonic blockchain is working on the implementation of an algorithmic stablecoin with up to 23% annual percentage rate (APR), according to Andre Cronje, co-founder of Sonic Labs and founder of Yearn.finance.<\/p>\n

Cronje wrote in a March 22 X post<\/a>:<\/p>\n

\u201cPOC looks good. Yielding > 200% APR @ 10m tvl, around 23.5% APR @ 100m, steady at around 4.9% at 1bn+. Will scale up and get team for a full release.\u201d<\/p><\/blockquote>\n

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Source: <\/em>Andre Cronje<\/em><\/a><\/p>\n<\/figcaption><\/figure>\n

The announcement came a day after Cronje admitted<\/a> to experiencing Post-traumatic stress disorder (PTSD) related to algorithmic stablecoin due to previous cycles:<\/p>\n

\u201cPretty sure our team cracked algo stable coins today, but previous cycle gave me so much PTSD not sure if we should implement.\u201d<\/p><\/blockquote>\n

In May 2022, the $40 billion Terra<\/a> ecosystem collapsed, erasing tens of billions of dollars of value in a matter of days. Terra\u2019s algorithmic stablecoin, TerraUSD (UST), was yielding an over 20% annual percentage yield (APY) on Anchor Protocol.\u00a0\u00a0\u00a0<\/p>\n

As UST lost its dollar peg, crashing to a low of around $0.30, Terraform Labs co-founder Do Kwon<\/a> took to X to share his rescue plan. At the same time, the value of sister token LUNA, once a top-10 crypto project by market capitalization, plunged over 98% to $0.84. For reference: LUNA was trading north of $120 in early April.<\/p>\n

Related: <\/strong><\/em>Sonic TVL rises 66% to $253M since rebranding from Fantom<\/strong><\/em><\/a><\/p>\n

Sonic claims to be the world\u2019s fastest Ethereum Virtual Machine (EVM) chain, with a \u201ctrue\u201d 720 milliseconds (ms) finality<\/a> \u2014 the assurance that a transaction is irreversible, which happens after it is added to a block on the blockchain ledger.<\/p>\n

Sonic has garnered attention in the crypto industry since its testnet achieved a 720 ms finality<\/a> on Sept. 8, 2024.<\/p>\n

Related: <\/strong><\/em>FTX liquidated $1.5B in 3AC assets 2 weeks before hedge fund\u2019s collapse<\/strong><\/em><\/a><\/p>\n

Investors are still buying collapsed LUNA token years after Terra crash<\/h2>\n

The Terra (LUNA) token is down over 98% from its all-time high of 19.54 recorded on May 28, 2022, nearly three years ago, CoinMarketCap<\/a> data shows.<\/p>\n

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LUNA\/USD, all-time chart. Source: <\/em>CoinMarketCap<\/em><\/a><\/p>\n<\/figcaption><\/figure>\n

Despite the collapse, the token saw over $21 million worth of trading volume over the past 24 hours, which shows that \u201cpeople are still buying it even though it\u2019s dead,\u201d noted<\/a> popular technical analyst Optimus KevTron.<\/p>\n

The collapse of the algorithmic stablecoin issuer created shockwaves among both crypto investors and lawmakers.<\/p>\n

To create more stability, the European Union\u2019s Markets in Crypto-Assets Regulation (MiCA) bill will<\/a> prohibit the issuance of algorithmic stablecoins to avoid another collapse similar to the Terra ecosystem\u2019s.<\/p>\n