Korea No Longer Runs on Terra

Welcome to Bloomberg Crypto, our twice-weekly look at Bitcoin, blockchain and more. If someone forwarded this to you, sign up here. In today’s edition, Muyao Shen recaps how the Korean blockchain scene has changed: 

Korea no longer runs on Terra

The South Korean blockchain community is already moving on to the next big thing. That was pretty evident during Korea Blockchain Week earlier this month, where there weren’t any signs of former favorite son or his now infamous Luna token and the algorithmic stablecoin TerraUSD that led to billions of dollars in losses when they collapsed back in May and ushered in the current crypto winter. Kwon had become the de facto face of crypto in the Asian nation, even sporting a t-shirt emblazoned with “Korea Runs on Terra” a few years earlier at the annual gathering in Seoul. 

Instead, all the buzz at this year’s sold-out event was around Web3, blockchain games and NFTs. Still, the ripple effect of the absence of Kwon and Terra’s high-profile boosters was noticeable. One executive at a top hedge fund in Asia put it this way: “This became so Korean native. It used to be an event where you saw big players like Galaxy Digital, Genesis.”

Galaxy’s Michael Novogratz, as much known now for having his Luna tattoo become a constant reminder of his hubris than for the fortune he’s made trading tokens, wasn’t a featured speaker this time around. Other institutional powerhouses like Genesis were perhaps dealing with their own internal issues, as everyone was caught off guard by the contagion of Terra’s meltdown.  

But Terra and Kwon weren’t proverbial elephants in the room. Random discussions with attendees, whether from the South Korea crypto venture firm The Hashed that supported Terra or local residents who just came out of curiosity, found that they all seemed pretty open to commiserating about the downfallen. That was a somewhat surprising reaction given the country’s “saving-face” culture. Many admitted that Terra, despite their initial optimism, was a flawed project and described the frustration when everything started falling apart. 

And the broader market downturn’s impact wasn’t hard to miss. Gone was the unbridled exuberance that percolated at the gathering during the bull run. When it turned out that party favors were much less extravagant than in prior years, the often-repeated refrain from attendees was: Bear Market. 

At meetings, most Korean gaming conglomerates gave much more restrained outlooks than usual. At best, it will likely take at least one or two years before a new blockchain-based game becomes big enough to be considered an industry blockbuster. 

For anyone who’s been around crypto for a bit, the industry’s penchant to quickly move past blowups like Terra and pivot to the next big thing is self-evident. But based on the timetables given by the gaming studios and the overall mood in Seoul, that itch may not be satisfied for awhile.   

Charting it out

Counting it out

Hearing them out

What we’re reading (and writing)

• Crypto Confronts Own Y2K Moment With Ethereum Network Upgrade
• Voyager Gets Bankruptcy Court Approval on Key Employee Bonuses
• An Anatomy of Crypto-Enabled Cyber Crime (Financial Times)
• Why Warren and Sanders Object to Crypto Rules (Wall Street Journal)
• Three Arrows Liquidators Get Singapore Nod to Probe Crypto Fund
• India Agency Searches A16Z-Backed Crypto For Forex Violations

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— With assistance by Anne Cronin, Vildana Hajric, Akshay Chinchalkar, and Joanna Ossinger