19 May
Last Update: 19 May

Pantera Capital and Delphi Digital Speak Up About the Collapse of LUNA

Delphi Digital discloses a loss of $10 million investment after Terra collapse while Pantera Capital admits selling 80% of its investment before the crash

The renowned companies within the crypto industry that sponsored Terra have provided details on how their balance was affected following last week's collapse. Delphi Digital admitted in a blog post that they “always knew something like this was possible”, but they miscalculated the risk of a “death spiral” event coming to fruition.

The company acknowledged its mistake in the post:
 “We understood the risks of the algorithmic model upfront and sought to be transparent about them throughout; however, it’s clear we miscalculated the risks. To the vocal critics of Terra’s algorithmic design–you were right and we were wrong.”

Delphi stated that its investment initially represented 0.5% of the fund's NAV at the beginning of 2021. This position grew as the price of LUNA increased. The fund progressively increased its participation, including a $10 million investment in LUNA, as part of a sale by LFG. Eventually its investments eventually rose to around 13% of NAV at peak LUNA prices.

Delphi admitted that it didn't sell any LUNAs during this time, so the recent crash has left it with "a large unrealized loss". - A $10M investment which based on the current LUNA price, is entirely lost.

Pantera Capital also spoke this week about how the crash of LUNA and UST had affected them.

According to The Block,  Pantera Capital invested at least twice in Terraform Labs — once backing its $25 million round in January 2021 and then joining its $150 million ecosystem fund round in July 2021.

Joey Krug, Pantera’s co-chief investment officer stated that the fund had sold most of its LUNA position over the last year before Terra entered its death spiral.

“We managed that position down over time as it became increasingly profitable/large, in order to maintain a diversified portfolio. We initially invested in LUNA because of the progress we saw in developer adoption, the payments usage, and the broader ecosystem being built on Terra.” he said on Twitter yesterday.

Three Arrows Capital and Galaxy Digital acknowledged that the LUNA-UST model had collapsed but they confirmed that they were all “out of stock” at the time and did not suffer any damage.


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