Terraform Labs management has announced the opening of a $10 million Terraform Capital fund to cover audits of DeFi projects and the expanded integration of TerraUSD (UST) and LUNA stablecoins.
Terraform Labs co-founder Do Kwon said that the main goal of the fund is to ensure that the stable cryptocurrencies UST and LUNA are used as much as possible in the decentralized finance industry (DeFi). In turn, Terraform Labs will cover the project costs associated with passing a security audit.
Kwon expects that the return on investment will be high – it is possible to finance about a hundred audits, ensuring the successful integration of Terra stablecoins. Terraform Labs has already compiled a list of auditors, including Sentnl, Quantstamp, and Solidified. Jeffrey Kuan, Head of Business Development at Terraform Labs, said:
“It doesn’t matter on which blockchain the project operates. The Terraform Labs Foundation invests in any projects that can interact with Terra stablecoins. In addition, it will accelerate the development of projects based on Ethereum.”
According to Quantstamp CEO Richard Ma, $240 million worth of crypto assets were stolen in 2020 alone as a result of hacks of DeFi projects. So, in November, the Akropolis project was attacked, during which hackers managed to withdraw $2 million in DAI stablecoins, and a month earlier, attackers attacked the DeFi Harvest Finance protocol, and stole $25 million worth of crypto assets.
There are situations when a project may be closed due to a critical error in the smart contract code. This happened to the YAM Finance project, which was subsequently forced to restart. Therefore, the head of Quantstamp stressed the importance of passing an audit of smart contracts, since it is about the security of user funds.
Recall that last year, Terra, together with Cosmos and Polkadot, introduced a DeFi product called Anchor, offering deposits in stablecoins with interest accrual.