Crypto research firm and boutique investor, Delphi Digital has said in a blog post that it has lost a significant amount of money in the aftermath of the LunaUST de-pegging event.
The blog post says that Delphi Ventures purchased a small amount of Luna, worth about 0.5% of the venture fund’s net asset value (NAV) at the time. The purchase was made in the first quarter of 2021.
The venture fund’s position of the Luna token increased as time passed. At Luna’s peak price, Luna and Terra assets made up about 13% of the venture fund’s NAV.
This February, Delphi Ventures participated in the LFG raise and invested $10 million. This investment is now worthless.
The blog post also clarified that Delphi has not sold any of its Luna tokens across this whole de-pegging event, and that it is now sitting on a “large unrealized loss”.
Delphi said that it always believed that investing in the Luna token was a risk, however “a high level of external collateralization was a necessity in the long run, and we saw this as a path to get there. Unfortunately it didn’t grow fast enough compared to UST supply, and, combined with a fall in value of the BTC reserves, the liability overhang was too large to be defended.”
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Thus, the company owned up to its faults and said that “we miscalculated the risk of a “death spiral” event coming to fruition.”
Not only Delphi, but another major investor of LunaUST, Hashed has also lost over $3.5 billion using pricing data from early April.
