Sonic unveils high-yield algorithmic stablecoin called PTSD, sparking Terra-Luna flashback

Sonic, a rebranded high-speed blockchain platform, has announced a plan to launch an algorithmic stablecoin called PTSD, offering up to 23% APR—stirring memories of the Terra-Luna collapse.

Andre Cronje on X: "Pretty sure our team cracked algo stable coins today, but previous cycle gave me so much PTSD not sure if we should implement." 

The effort is led by Andre Cronje, co-founder of Sonic Labs and founder of Yearn.finance. In a March 22 post on X, Cronje shared performance metrics from a proof-of-concept: over 200% APR at $10M TVL, tapering to 4.9% at $1B+.

Andre Cronje on X: "POC looks good. Yielding > 200% APR @ 10m tvl, around 23.5% APR @ 100m, steady at around 4.9% at 1bn+. Will scale up and get team for a full release. 

Algorithmic stablecoins use smart contract logic to maintain price stability, unlike fiat-backed stablecoins pegged 1:1 to traditional currencies.

Sonic’s model aims to balance high yield with liquidity and price stability—though that combination has historically proven volatile.

The crypto community hasn’t forgotten the $40 billion implosion of Terra in May 2022.

TerraUSD (UST), once offering a 20% yield on Anchor Protocol, lost its dollar peg and crashed to $0.30. Its sister token LUNA plummeted from $120 to under $1, triggering the deepest crypto winter to date.

Sonic insists this project learns from past failures. The team says it's prioritizing transparency and resilience to avoid the pitfalls that doomed UST.

Still, caution hangs heavy. Many investors, burned by Terra, are eyeing Sonic’s next move with a mix of interest and skepticism.

With a promised 720 ms finality—the fastest among Ethereum Virtual Machine (EVM) chains, according to Sonic—the platform is betting big on speed, scale, and renewed trust.

Whether this high-yield stablecoin can succeed where others fell remains an open question.