The cloud of pessimism and criticism still hands around the Terra team, TerraForm Labs. This development led the Ethereum co-founder, Vitalik Buterin, to criticise the project’s business model.
According to a Bloomberg report, Buterin cited that no genuine investment will give investors a guaranteed yearly return of 20%.
The Ethereum boss noted in a recent Bloomberg report that no genuine investment would give investors a guaranteed 20% return yearly.
“There is no genuine investment that can get anywhere close to 20% returns per year.”
Buterin also added that criticism of decentralised finance (DeFi) is justified, especially for cryptocurrency projects working hard to optimise for ‘capital efficiency’.
“The greater level of scrutiny on Defi financial mechanisms, especially those that try very hard to optimise for ‘capital efficiency’, is highly welcome. Moreover, the greater acknowledgement that present performance is no guarantee of future returns (or even future lack-of-total-collapse) is even more welcome,” Vitalik added in a statement published yesterday.
More Criticisms for Terra
The backlash from experts and the crypto community towards Terra shows no signs of slowing down after the massive collapse of its ecosystem. Additionally, many investors linked the failure of Terra’s ecosystem tokens to the project’s design and its vast staking rewards of 20% on the Anchor protocol.
Industry giants, including Binance founder and Circle CEO, have recently slammed Terra following the project’s downfall.
Changpeng “CZ” Zhao not only expressed disappointment at the way Terra handled the situation but also went a step further to halt trading for Terra ecosystem tokens UST and LUNA to keep its investors safe from incurring more losses.
However, Binance later resumed trading for both cryptocurrencies when Terra proposed its perfect plan to make investors whole.