Andre Cronje, co-founder of Sonic Labs, hinted at perfecting the contentious idea of an algorithmic crypto stablecoin over three years after TerraUSD kickstarted a $40 billion ecosystem failure. On March 21, Cronje posted, “pretty sure our team cracked algo stable coins today, but previous cycle gave me so much PTSD not sure if we should implement,” on X.
Unlike fiat-pegged stablecoins like USDT or USDC that are directly backed by cash reserves or cash equivalents, algorithmic stablecoins maintain value using onchain mechanics to manage demand and supply.
The PTSD Cronje referred to is the 2022 TerraUSD or UST collapse, which cascaded across multiple companies and effectively started that year’s market doldrums. UST had an $18 billion market capitulation at its peak before May 2022 and was the third-largest stablecoin at the time. The broader Terra ecosystem, including UST’s sister token, TerraLUNA, was worth over $40 billion.
Cronje’s post received mixed reactions, with some users expressing concerns about another algo stablecoin. Others bantered to the idea and joked that this cycle needed “a new infinite money printer.” For his part, Cronje has updated the community on the token’s progress and seemed intent on its development. “Will scale up and get team for a full release,” he tweeted on March 22. The post suggests the potential algo stablecoin would be a separate venture from L1 blockchain Sonic, formerly Fantom, which Cronje co-founded.
One user asked Cronje to name the product “Anchor protocol” in memory of the decentralized lending platform Anchor Protocol that drove significant adoption of UST. TerraUSD holders could deposit UST on Anchor for a mouthwatering yield back in 2022. “Call it Anchor and UST? For the culture?” Cronje replied on March 24, seemingly mulling the request.
Chiming in on the discourse, Curve founder Michael Egorov said Tuesday, “You’d need to rename yourself to Do Cron on X for that." The comment was a subtle jab at Terra founder Do Kwon, who is now a convicted felon and was extradited to the U.S. last December for criminal prosecution.
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