Ecosystems are constantly calling for developers from Terra - Massive "blood sucking"?

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The article gives a perspective on why ecosystems are constantly calling for developers on Terra to come to their side



While the community has not yet grasped all of Terra's proposals, recently, another interesting thing happened. It's the ecosystems that announce they want the Terra developers to join them. But why do they do that? Here are my thoughts - a Terra ecosystem follower on this incident.

Starting with Terra having difficulty​

Terra and the fact that UST lost peg​

We need to understand the fact that UST lost peg. A brief summary is as follows:

  • On May 9, UST was hacked on 3pool, resulting in loss of pegs.
  • LUNA also suffers a similar situation when the Mint - Redeem mechanism helps users to change UST to LUNA to sell as the LUNA price divides more than 10,000 times from the top.
  • On May 13, Terra stopped working twice. Binance moved to delist UST and LUNA, but then reopened.
  • On May 19, Do Kwon released the final proposal for the fork chain. In which the old Terra is Terra Classic with LUNC as the governance coin, and the new Terra has the governance coin as LUNA.
Event details: UST loses peg - Is it due to the collapse of the "Ponzi" model?

LUNA price fell sharply in the event of UST losing peg
Projects on Terra are also wondering what the next step should be when Terra has the ability to fork to the new chain. Some parties that are implementing Lockdrop like Mars Protocol have proposed to unlock early. But also many projects choose to give up, delete Twitter and Website, such as Learn Terra.

Actions of dapps on Terra currently
Terra herself is now in a more difficult situation than ever. While Do Kwon - Founder of Terra suggested fork chain, many people argue that this does not solve the problem. Others disagree with the percentage of new LUNA divided by the project on Terra… Along with some other suggestions.

A lot of suggestions on the Terra forum were made around this time

Impact on other ecosystems​

The other systems don't have the same serious problems as Terra, but the growth is also reduced. The first is that TVL has fallen sharply in the past one month as shown below.

TVL of many systems dropped sharply
Next is the transaction. Many ecosystems show transactions decreasing from the beginning of 2021. This is clearly shown on BNBScan or PolygonScan and some Explorers of other systems.

In addition, some parties show that Long-term holders also no longer have confidence in the ecosystem, as they gradually sell the system's governance tokens. For example, Solana, when wallets holding more than 100,000 SOL gradually decreased from September 2021 to May 2022.

The number of wallets holding >100K SOL is decreasing

Terra's dev nature​

Terra is one of the ecosystems with a fairly successful community. In crypto, not every project has a large number of loyal users. A few with "crazy fans" can be mentioned as Link (community called LINKMarine), and Terra with LUNAtics.

Even LUNAtics has hashtags on Twitter
When its core product, UST, fails, affecting the entire ecosystem. But many projects are not to blame, on the contrary, they volunteered to stay and rebuild Terra from scratch.

Many parties support Terra
Chauncey St. Join, founder of Angle Protocol , a charity project on Terra is a prime example. Based on the project purpose, Angel Protocol shows that the platform does not have much impact on the ecosystem.

According to the tweet, Chauncey has put his faith in Terra from the very beginning. That means there is a high possibility that he has suffered damage in the recent UST peg loss incident. But that's not why Chauncey left Terra. He is still working with other parties to find a way to restore the ecosystem.

Not only that, Terra's community is also very loyal to the ecosystem. Once Nour - Founder of Inverse Finance had a move to FUD UST, many fans argued with Nour and defended UST.

“Vampire Attack” ecosystem version​

First, we need to understand about Vampire Attack . This term was born around the end of 2020 to refer to one project taking away what is in the possession of another project. The first Vampire Attack originated from SushiSwap using SUSHI tokens with APY up to several hundred percent to attract LP on Uniswap. The results show that they have been successful in "sucking blood" of Uniswap's liquidity.

Since then, Vampire Attack has appeared from time to time like LookRare and OpenSea, X2Y2 and OpenSea… But that's just on the scale of the project.

Now, the same story happens with Terra. Knowing Terra is in a difficult situation, many ecosystems like Tron, BNB Chain or Fantom began to offer Incentives packages to support Terra's devs, with the expectation that they would come to their side to build.

Terra dev incentive programs of ecosystems

Why do ecosystems want to recruit Terra developers?​

In order for the ecosystem to develop, in addition to having cash flow, devs must stick with the ecosystem to build together. To make it easy to imagine, the ecosystem is like a house, and the devs are the workers. If the house wants to be completed, the dev cannot leave it halfway.

As of May 2022, the market has experienced 6 “flaming” months since the BTC peak of 68,000 USD established in November 2021. More and more people are looking at the downtrend angle.

The number of transactions of many systems also decreased. For example, in the BNB chain, from the time when BTC peaked in November 2021 and gradually decreased until May 2022, transactions on the BNB chain also tended to decrease.

The number of transactions has been decreasing since the beginning of 2022
Therefore, if it is really a downtrend, it is much more difficult to build an ecosystem than an Uptrend. Because the number of participants interacting with the projects will decrease, which means no more, or little profit.

Also, many people look at short-term profits, only growing the project up to a point, then rug pull, as is the case with Balloonsville. Not only affects investors' money, but also the honor of other parties. In the case of Balloonsville it's Magic Eden or larger Solana.

In the spirit of “LUNAtics”, it is likely that the Terra developers will not go elsewhere. But if they go, the possibility of them staying for a long time and building is very large, even though the profit is not much.

Therefore, it is possible that chains attract developers to want to build an ecosystem in the long term.

Or simply want to "drain" Terra?​

In another perspective, calling Terra's devs in addition to bringing benefits to the ecosystem, what effect does Terra have? To answer this question, it is necessary to review Terra's position before the UST loss of pegs. Terra's TVL ranks second with about $30 billion, just behind Ethereum.

Terra's TVL in August 2021
Around August 2021, Terra's TVL is only about 30% of that of BSC (current BNB Chain). But in just a few months, Terra's TVL surpassed BSC and held the top 2 position. This shows that Terra's potential is not small.

This comes from many reasons. One of them is the loyalty factor of the aforementioned dev team and community. Therefore, regardless of whether the final decision is to fork the new chain, or keep the old chain and compensate, there is still a chance that Terra can return to the same position as before.

Currently the devs are in a state of panic, not knowing if Terra can recover or not. And now is a great time when chains want to pull them into their ecosystem. If this plan succeeds, Terra will lose one of her powerful "weapons".

summary​

For the first time in history, a coin in the top 10 can split more than 10,000 times in a few days. Now, it is unprecedented that there are many ecosystems that are famous for recruiting devs of an ecosystem. Thereby showing that UST's loss of peg this time is not only a financial impact, but it is highly likely that we will see many things that have never happened before take place. What is next?
 

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