Despite Terra's Fall, DeFi Followers Remain Optimistic About Future

ndtv.com:

Followers of decentralised finance (DeFi) are optimistic about its future despite Terra fall

Hardcore believers in the future of decentralized finance aren't giving up on algorithmic stablecoins even after the spectacular collapse of TerraUSD (UST), saying they remain key for moving to a world without intermediaries such as banks and brokerages. 

“An algo stable will exist in the next five-to-seven years,” said Hassan Bassiri, a portfolio manager at Arca, which was an investor in Terra. “And it has to exist or else what are we even doing in this space?” 

DeFi had been one of the fastest growing sectors in crypto the past few years, with a slew of borrowing and lending applications offering double- and triple-digit returns. Like most crypto projects, they are dependent on attracting enough transactional volume to keep the blockchain networks going. The model appeared to work until central banks began removing Covid-era stimulus, triggering a retreat in risk appetite and raising questions about whether the incentive-based systems are sustainable. 

Terra collapsed in early May after the software intended to keep UST stable -- allowing it avoid the normal volatility in crypto prices so that it could be a more reliable tool for transactions-- couldn't overcome a plunge in demand for its related Luna token. While it was the largest algo stablecoin by far at around $18 billion in market value, it was only one of about a dozen that have failed or were unable to maintain promised 1-to-1 pegs to assets such as the dollar. 

Among the handful of algo stablecoins that survive is the USDD token launched by controversial crypto entrepreneur Justin Sun on his Tron network just before the collapse of UST. 

Sun defended the project in an