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Wall Street to Become History! Terra Reveals Next Step to Create Algorithm-Controlled ETF Products

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Wall Street to Become History! Terra Reveals Next Step to Create Algorithm-Controlled ETF Products

The co-founder of Terraform Labs, the development team behind the stablecoin project Terra (LUNA), Do Kwon, released a tweet today hinting at the development of an algorithm-controlled ETF product.

Next Step: Creating a Crypto ETF

In a tweet he posted, Do Kwon stated that the influence of ETFs in the traditional financial sector is significant. Passive investments through ETFs transform into active investments in many individual stocks. Compared to traditional finance, ETFs are even more crucial in the cryptocurrency space. Despite the possibility of 99% of DeFi projects failing, investors are still willing to take risks because DeFi undeniably holds revolutionary potential.

Furthermore, Do Kwon pointed out several drawbacks of traditional ETFs in finance, such as being issued and managed only by qualified institutions, inflexible parameters (market cap adjustments quarterly), and the upcoming product from Terraform Labs aims to address these issues. Do Kwon said:

"What would happen if we had an algorithmically controlled ETF, driven by permissionless incentive mechanisms for ETF rebalancing, or if the community traded ETFs for rebalancing when ETF assets need to be restructured?"

"Wall Street will become history."

Do Kwon believes that a cryptocurrency version of ETFs will be superior to traditional ETF products, with algorithmic management, a wider range of asset choices (whether general cryptocurrencies, derivatives, income assets, or mAssets), customizable trigger conditions for lock-up periods, and the ability to use social and user activity data for rebalancing, and more.

The new product is based on the Terra ecosystem, utilizing bridged crypto assets, synthetic assets on Mirror (stock assets, ETFs, and commodities), interest rate products on Anchor, Terra stablecoins, and derivatives to be released by the Vega Protocol. Among these, the Mirror token MIR has surged by about 20% in the past 24 hours.