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Hi readers,
During my first few days at Tech in Asia – barely three weeks ago – I was asked to write a story about Chai, a Korean payment app. Chai is well known for using a stablecoin called KRT to help process payments.
“That’s easy,” I thought. “And kinda boring.”
What I didn’t know was that KRT was short for TerraKRW, an algorithmic stablecoin developed by Terraform Labs and tied to Luna. Queue ominous music.
Just over a week later, Luna was collapsing and taking the entire Terra blockchain down with it. The crypto world was in panic, and I was calling every analyst I could find, trying to figure out how everything went so wrong so quickly.
This shouldn’t come as a surprise, though, because there had been warnings about the dangers of algorithmic stablecoins for years.
Normal stablecoins, which are backed by hard assets, have become mainstream to the point of being boring, but there were concerns that algos might be susceptible to a major sell-off, analysts said.
The analysts found out just how right they were on May 15, and you can read what they told us here. So how did Chai do during the Terra meltdown? It survived – you can find detailed insights into that story here.
— Scott Shuey, journalist at Tech in Asia
Top stories this week
Photo credit: rokastenys / 123RF
1️. Luna and UST are likely dead. What comes next?
All the warnings against algorithmic stablecoins have come true as Terra’s UST and Luna crashed. We look at what happened and what’s next for the company.
2. How Bukalapak is betting on rolling up brands in pursuit of profits
Through its US$100 million ecommerce roll-up play, Bukalapak may be building a venture that could nudge it toward the path of “proper” profitability.
3. The tech companies bankrolling Indonesia’s digital banks
What do you get when you cross an Indonesian bank with an autos marketplace and a digital lending platform? A digital bank.
How virtual spaces are driving online interactions
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