Andre Cronje Hints at Cracking Algorithmic Stablecoins, Weighs Risks

Andre Cronje, co-founder of Sonic Labs, has reignited debate over algorithmic stablecoins, hinting that his team may have perfected the concept. In a March 21 post on X, Cronje shared his thoughts, stating, “Pretty sure our team cracked algo stable coins today, but previous cycle gave me so much PTSD not sure if we should implement.”

His hesitation stems from the catastrophic collapse of TerraUSD (UST) in 2022, which triggered a market-wide downturn and erased over $40 billion in value. Unlike traditional stablecoins like USDT and USDC, which are backed by cash reserves, algorithmic stablecoins rely on automated mechanisms to maintain their peg. UST, at its peak, had a market cap of $18 billion before its depeg led to a chain reaction of losses, shaking investor confidence in such models.

Cronje’s post sparked mixed reactions. Some expressed skepticism about reviving an algorithmic stablecoin concept, while others joked that every crypto cycle needs a new “infinite money printer.” Despite the concerns, Cronje appeared committed to further development, tweeting on March 22 that he planned to "scale up and get [a] team for a full release." His wording suggests the project may be independent of Sonic, the rebranded Fantom blockchain that he co-founded.

Adding a nostalgic twist, one user suggested naming the project “Anchor Protocol,” referencing the lending platform that played a crucial role in UST’s rise by offering high-yield deposits. Cronje seemed to entertain the idea, responding on March 24 with, “Call it Anchor and UST? For the culture?”

The discussion also drew in Curve Finance founder Michael Egorov, who quipped on X that Cronje would have to rename himself “Do Cron,” a reference to disgraced Terra founder Do Kwon. Kwon, who was extradited to the U.S. last December, faces criminal charges related to the collapse of Terra’s ecosystem.

While Cronje's post suggests a potential return of algorithmic stablecoins, the crypto community remains divided on whether history is set to repeat—or if a new iteration can avoid the mistakes of the past.