Chains like Polygon and Kadena are wooing coders whose work is jeopardised by Terra implosion with multimillion-dollar ecosystem funds.
Terra’s abrupt demise resulted in a crypto market sell-off, billions in lost fortunes, and rumours of a class-action lawsuit.
However, Terra’s most precious asset — the creators’ loyalty – is also being questioned.
With the release of Terra 2.0, projects must choose whether to stay faithful to the Terra ecosystem or take a different path. Competing blockchains are enticing them to go to greener pastures by offering significant incentives. Will they decide to stay or leave?
Other Terra project tokens were swept up in the sell-off as Terra’s native LUNA token dropped 99 percent of its value, wiping over $40 billion from the once-vibrant Terra ecosystem. Terra was more than just UST.
Dan Edlebeck, co-founder of Sei Protocol, a decentralised finance (DeFi) blockchain in the Cosmos ecosystem, said, “Terra projects are exploring alternative options.” “From an engineering standpoint, they’re looking at what makes sense, and in some cases, they’re letting their community decide.”
Terra’s competitors are also attempting to poach these developers, with some blockchains even opening eight-figure funds to assist sweeten the offer.
Dev poaching
Just one month before the UST depeg, Terra creator Neel Somani, 24, left his position at hedge fund Citadel to work on Terra. His misfortunes were prominent enough for The New York Times to wax poetic about them.
Terranova was his initiative to add Ethereum compatibility to the Terra blockchain. The idea was that integrating it with the Ethereum Virtual Machine (EVM) would bring a flood of new projects to the Terra network.
Somani says he’s facing uncertain next steps now that his current project has been “paused.”
“A lot of ecosystems have reached out, including Avalanche, Secret Network and Osmosis,” Somani told CoinDesk.
It has previously partnered with Avalanche, an EVM-compatible blockchain. Cosmos technology is also used by Secret Network, a privacy-focused blockchain, and Osmosis, a DeFi-focused blockchain.
Somani said these projects usually email him a link to a grant application, as well as a few suggestions for what the network would be interested in. He’s also gotten “a dozen” of requests for interviews from various protocols.
“I haven’t committed to anything at this point,” Somani said.
DeFi Talent
Developer skill has been in high demand, especially for engineers with experience building on Terra, according to Dan Eskow, founder of Up Top, a recruiting agency focusing in crypto jobs.
“Not many engineers have gone deep enough into DeFi to see a project scale to that level,” Eskow told CoinDesk.
According to data from DeFiLlama, Terra’s UST had a market capitalization of $18 billion before its collapse, and the Terra ecosystem was ranked second in DeFi total valued locked (TVL).
“The Luna engineers produced a solid product,” Eskow stated. “Their effort is not reflected in the unsuccessful strategy, and there are many projects with less baggage that would hire them in a heartbeat.”
In other words, the failure of a well-known algorithmic stablecoin ruined the fortunes of numerous projects unrelated to UST.
A chronic shortage of engineers has left blockchain businesses ravenous for top talent in the crypto industry.
“DeFi was a strength of Terra,” remarked Sei’s Edlebeck. “It wasn’t only Anchor,” says the narrator. It featured borrowing and lending capabilities, as well as derivatives and a money market.”
Edlebeck says he’d want to see a more “strong” Cosmos ecosystem, and that Sei Protocol has begun working on a perpetuals product with an ex-Terra team.
“I believe Cosmos and its design architecture are primed to see a lot of fresh activity,” Edlebeck added. Terra, in particular, is constructed with Cosmos technology.
In addition to programmers, crypto recruiter Eskow says he’s aiming to poach staff from funds that have incurred significant losses due to Terra, in the hopes that disgruntled employees will leave.
Kadena, Polygon launch Terra support funds
To tempt more talent, blockchain initiatives like Kadena and Polygon both declared this week that they will provide millions of dollars to help projects harmed by the Terra crisis – as long as the project commits to build on their own chains.
In an attempt to attract projects into its ecosystem, Kadena, a layer 1 blockchain created in 2016, announced a $10 million Terra relief fund on Thursday.
“We stand behind everyone who has been impacted by this mini-meltdown,” said Francesco Melpignano, CEO of Kadena Eco, the company’s growth arm. “We don’t want to dance on people’s graves,” said the group.
The monies, according to Melpignano, will go beyond supporting Terra developers; projects that, for example, lost runway capital by depositing funds in Anchor will be eligible for help. Read more; What To Look For In A Crypto Exchange
Melpignano told CoinDesk, “This is a defining moment for the blockchain sector.” “It’s bigger than Luna.”
Polygon, an Ethereum sidechain, has also established a multimillion-dollar fund to help projects integrate with the Polygon ecosystem. The financing would help developers cover the costs of moving their businesses away from the coin and onto Polygon.
“The terrible demise of Terra left a lot of developers without a home,” stated Ryan Watt, CEO of Polygon Studios. “The failure of Terra should not be used to condemn [the decentralised applications] that were built on it.”
Watt declined to elaborate on the fund’s exact size, citing a desire to “ensure that developers aren’t hurried to make a decision and convey the sense that there’s only a certain amount of money available.”
He also urged project teams to create where users are and in an EVM-compatible manner.
Watt told CoinDesk, “The essential emphasis here is that we are setting millions of dollars aside, whatever it takes, to ensure developers have a home to relocate to and continue creating in Web 3.”
Terra 2.0
Terra 2.0 supporters include the non-fungible token (NFT) marketplace RandomEarth, the DeFi protocol Nebula, and the decentralised exchange Phoenix Finance, with Terraform Labs founder Do Kwon retweeting the comments to his many followers.
Supporting the new chain, however, is not the same as committing to develop on Terra, according to officials of a Terra project who talked with CoinDesk on the condition of anonymity. Read also; Terra Luna Crypto Crash: Why Is LUNA Price Falling?
“Terraform Labs has been extremely helpful to us as developers,” a Terra developer told CoinDesk. “We want to support them in launching the fork, but we can’t commit to building just yet.” “Until things with the new chain become evident, there’s no downside to associating with Terra,” says the theory.
Over the last few weeks, Sei Protocol’s Edlebeck says he’s been in regular contact with several top Terra projects, including the team from Delphi Labs, a major investor in the Terra ecosystem.
“The project’s founders are really looking into different solutions, even more than I expected,” Edlebeck added. “Too much is up in the air with Terra 2.0, and the road forward is being questioned.”
