Terra was "Poorly Designed" But Not Intended as a Rug pull, Says Tether’s CTO
UST Was a 'Castle of Cards': Tether CTO
Appearing on the crypto-focused Reimagine Unplugged podcast this week, Paolo Ardoino, the CTO of stablecoin issuer Tether, compared Terra’s UST stablecoin to a “castle of cards” that was due to fall at any time.
He further opined that another big problem for Terra’s demise was with its creator Do Kwon’s over-confidence and misguided sense of belief:
“I don't know Do Kwon. But let's give him the benefit of the doubt. He created this project with arrogance and with thinking that he was right and many were supporting him, of course, probably for economic reasons, but was not per se, a rug pull right, it was a project that was poorly designed as many projects are poorly designed.”
Ardoino later went on to say that the UST had simply become too big to maintain its peg, as its collateralization was not large enough to support the stablecoin but was still “big enough to crash the market even further.”
Regulatory Clarity on Stablecoins
On being asked what the regulatory landscape for stablecoins could look in the future, Ardoino suggested that policymakers first need to clearly define the difference between stablecoins fully backed by assets as opposed to those primarily backed by algorithms
“I believe that the first thing that needs to happen is a proper categorization of stablecoins so right now, Terra UST is an algorithm stablecoin, while Tether is a centralized stablecoin. So two different beasts with two different assurances, two different backings and so on,” he added.