The team behind the stablecoin Beanstalk is seeking $77 million in over-the-counter financing from private investors to help it recover from a big attack last month.
The Beanstalk DAO, the project’s decentralized autonomous organization, adopted a governance vote on May 7 that allows the core team to borrow money and use them to refill the project. This will result in the production of a new stablecoin token, and the project will aim to compensate investors who were harmed by the April 17 hack over time by issuing yet another token.
As per the proposal, the team intends to offer a new token to OTC lenders, saying that it would pay out a 500 percent return until the loan is completely repaid. Beanstalk’s financial situation is unknown.
According to the project’s creator Publius, the debt capital will go to anyone harmed by last month’s flash loan incident, which saw $182 million in different crypto stolen. In addition, the Beanstalk team has projected that it would require $77 million to compensate investors after freezing and burning all of its compromised stablecoins.
TerraUSD (UST), Terra’s algorithmic stablecoin, has been having problems, drawing attention to the market. On Monday, UST lost its dollar peg, falling as low as $0.61 before rebounding to $0.90.
Beanstalk utilized loans to underpin its value, as contrasted to algorithmic stablecoins or ones that depend on collateral, and investors would invest in Beanstalk debt assets called pods. Beanstalk’s native stablecoin Bean acts like a time-vested bond, paying a high yearly interest rate.