Delphi Labs Wants to Close the DeFi Protocol to Mars, As TVL Fell 99% to $2.6 Million

After last week’s stunning collapse of ust stablecoin and its sister token Luna, it was proposed to close the DeFi credit agreement Mars.

This is because Mars’ total value lock-in (TVL) collapsed 99% in the dramatic collapse of Terra ecosystem, from $270 million to $2.6 million, which caused ripples in the whole cryptocurrency industry.

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The materials submitted by Delphi Labs, a cryptocurrency research company that helped create Mars, will “automatically close open positions” on the platform and “return deposits to the user’s wallet address”.According to the proposal, “this will essentially close the agreement and remove all assets it currently holds”. Delphi said its decision was motivated by the uncertainty surrounding the terra ecosystem after the “unprecedented collapse of ust and Luna prices”.

“Terra is likely to become economically unsafe or permanently stopped,” it said. “The question of using ‘Terra 2’ and other assets on the chain to record smart contracts remains unanswered.”
Earlier, Mars protocol said on twitter that its “compatibility with any Terra Hardfork is uncertain if there is no reliable stable currency”.

The Total Value of Mars is Locked in Collapse to $2.6 Million

Mars is a decentralized borrowing and lending agreement based on terra blockchain. It is designed to be unmanaged, algorithmic, and community managed. A feature called “Red Bank” allows this, while another feature called “Mars realm” allows some whitelist addresses to borrow funds without collateral.

Since its launch in March, Mars has been one of the most active platforms on terra. At its peak, its TVL reached more than $350 million. But according to data compiled by DeFillama, that figure has now fallen to only $2.6 million.

Due to the demise of UST, this stable currency created by the terrain Labs of do Kwon, a Korean entrepreneur, is linked to the US dollar using a complex supply and demand algorithm associated with Luna tokens.

In the panic, Mars’ total assets under management fell 96% to $9.3 million in the four days ended May 14, and fell further to $2.6 million as of press time.Now, do Kwon, CEO of Terra, has proposed a plan to split the blockchain into a new chain called “Terra 2.0”, but there is no algorithm stability coin of the old chain. Kwon said that the old chain would be called “Terra classic”. Voting results on the plan are pending.

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Delphi Lab Said Terra’s “Hardfork” is Problematic for Mars

In its proposal, Delphi Laboratory believes that the plan to split Terra has brought a series of problems to the Mars agreement.For example, the proposal on the future competitive governance of blockchain “may lead to the situation that Mars needs to maintain on multiple chains [such as Terra classic and Terra 2.0],” it pointed out.

The company said that “it is better for end users rather than Mars smart contract” to hold funds in the case of air drop after the launch of the new Terra chain. Delphi Lab is also worried about the “economic security issues” of the emerging separation chain on terra.

In order to facilitate the closure, Delphi Lab “provides sufficient Luna, ust and ANC [tokens] to fund the red bank to close all open positions, and users first need to repay the outstanding loans”.
The fate of Mars tokens remains unclear. According to coingecko, the token has fallen 1.1% to $0.001 in the past 24 hours. Mars fell more than 99% from its all-time high of $0.25 in April.