On March 21, Cronje shared on social media that his team might have cracked the code for a viable algorithmic stablecoin, but the haunting memories of UST’s failure left him uncertain about launching it.
Unlike stablecoins such as USDT and USDC, which are backed by fiat reserves, algorithmic stablecoins depend on automated, on-chain processes to regulate their value through supply and demand, without any direct backing.
The trauma Cronje referenced stems from the UST debacle in 2022, which not only wiped out $40 billion from the Terra ecosystem but also sent shockwaves throughout the crypto market. UST had reached a peak market cap of $18 billion before it collapsed, taking down the sister token TerraLUNA along with it.
Pretty sure our team cracked algo stable coins today, but previous cycle gave me so much PTSD not sure if we should implement.
— Andre Cronje (@AndreCronjeTech) March 21, 2025
Despite mixed reactions from the community—some concerned about repeating the same mistakes, while others joked about needing “a new infinite money printer”—Cronje remains committed. By March 22, he announced plans to expand the team and push forward with a full release of the stablecoin, separate from Sonic’s ongoing blockchain work.
Editorial Team
Reporter at Coindoo
Source: https://coindoo.com/algorithmic-stablecoin-breakthrough-could-revolutionize-the-crypto-market/