Ten days ago, a user shared on the TerraLuna subreddit that UST had depegged and reached as low as $0.95. The comments are filled with people writing, '0.94 now', '0.92' etc. I wrote for everyone to 'Get out now.' and was promptly downvoted out of discussion.
I created a "Cliff's Notes" version of the April IMF Global Financial Stability Report along with my personal opinion regarding the future for Stablecoins, Cryptocurrency and CBDC's, I think it sort of paints a picture of the current global financial situation in a way that isn't being communicated
Is LUNA/UST a failed experiment, or a wacky scheme devised by diabolical crypto bros to fleece its participants and ruin lives? At the end of the day, any person, persons or law enforcement agencies are going to have to make damn sure it’s the former if they want any results. I don’t think we’re there yet.
bFot up ~30%! The liquidity is so low, I think the only people left are those who believe in the project. I’ve been DCAing like mad. Definitely reckless. But the Devs are still making moves. Still improving. They’re even sending the snapshot to get everyone the $UST airdrop. Definitely a long way to go but, I’m shilling to all my Cosmonauts!
Is it typical for platforms to just add assets without a notification period? Adding non-fully backed stablecoin hardcoded at $1 just days after UST collapses is extremely negligent and shows no respect for the safety of user's funds. Its unbelievably reckless. It sounds like Dues literally just exploited the bug and drained almost the entirety of user funds. But this is someone treated as legitimate use? Its almost comical if I didn't feel bad for all the users of scream with their deposits stuck, no liquidity, now reliant on the bailout of yet another collapsing algo stablecoin.
I swapped UST for USD on Kash at 10am PST on 5/9. The transaction was successful, but I never received any USD. I know other people that swapped after I did and received USD. Now Kash wants to give me my useless UST back after over 10 days. I think Prime Trust didn’t perform my transaction intentionally. Anyone else use Kash as an off-ramp? Did you get your USD?
UST was backed by air, it would be "stable" as long as their was demand for LUNA. Once that went it collapsed. Even $80k BTC wasn't enough to save the peg. I don't think there would be sudden collapse like this in top coins. USDT is shady but they did recently paid liquidate $7B.
This bull run confirmed that the crypto market was entirely manipulated by the likes of Tether UST, Bitfinex, Binance and other dubious pump and dump actors. This bear crash has confirmed that Bitcoin has failed it's promise of being inflation resistant. It has failed it's purpose. Not a mean of payment, and neither a store of value. So only DeFi remains on the board. Let's see.
I guess we should only listen to those reliable folks who were claiming 100k by EOY 2021 and how backing UST with Bitcoin definitely wasn't a terrible idea. If Tether hasn't blown up after 8 years and multiple fines for fraud they never will. I can't even imagine a fraudulent company lasting for 8 years in an almost totally unregulated industry. Nothing like that has ever happened before or could ever happen.
Frankly this Luna situation is a nightmare. Do Kwon is talking about forking the chain and starting over but nobody trusts him anymore. Trading UST or Luna now is like rearranging deck chairs on the Titanic. The only way out for investors is to accept the airdrop for UST victims offered by candlelabs.
Its not undervalued because it failed UST failed and technically there is 11 Billion debt on the Luna chain. It basically defaulted by severing the redeem mechanism. But as a failed project it is currently overvalued. And will never reach ATH again.
#Terra Con-Arguments Below is an argument written by idevcg which won 1st place in the Terra Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Terra's entire value proposition is being propped up by its stablecoin UST, and in particular, the Anchor protocol, which has been giving out a pretty stable return of 19.5-20.5% APR so far. > > Because of how high its promise of returns is (and not on a shitcoin whose value fluctuates wildly, the value is pegged to USD for Anchor/UST), it managed to attract a huge amount of capital into the ecosystem. > > But how would Terra fare when Anchor can no longer offer such a high rate of return, or worse, if the entire system collapses? > > After all, UST is just an algorithmic stablecoin; there's nothing special about it that cannot be replicated by other platforms and smart contracts. If there was no risk, why don't all the other L1s also create a similar system to Anchor UST and offer 20% APR? > > In reality, Anchor UST currently works almost like a sort of a ponzi. > > [to quote](https://twitter.com/0xhamz/status/1506372692005593090?s=21): > > When UST per LUNA is less than LUNA mkt price -- the system is insolvent > > UST liabilities equate to 45% of the current circulating LUNA market cap > > With rapid UST adoption --- this rising floor is a vector of vulnerability. > > UST are deposits that are redeemable for LUNA tokens > > The LUNA ecosystem pays depositors to come into the ecosystem > > LUNA is paying depositors the 19.5% APY on Anchor > > But depositors are not creating organic value for LUNA > > LUNA benefits from UST adoption via swap and other usage fees > > LUNA has a 6.7% stake rate > > Borrow at 19.5% and return 6.7% won't last forever > > > /quote > > edit: Additionally, Terra is planning to buy over 10 billion dollars of bitcoin; where will those funds come from? Will they be forced to sell Terra Luna to fund this purchase? If so, what effect will that sell pressure have on the price of Luna? ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mzj/top_10_terra_conarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).
#Terra Pro-Arguments Below is an argument written by idevcg which won 3rd place in the Terra Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Terra Luna's UST has surpassed makerDAO's DAI as the largest (by marketcap) algorithmic stablecoin, despite the fact that DAI has been around for much longer. > > Do Kwon, Terra's founder has recently announced that Terra plans to buy [11 billion dollars worth of bitcoin](https://cryptosnewss.com/terra-ust-buys-125-million-worth-of-btc-out-of-11-2-billion-planned-to-acquire-in-three-month-period/) in the next 3 months, to further diversify the backing of UST to make sure that UST can continue to maintain it's peg to the USD. > > The Anchor protocol, which is an essential part of the Terra ecosystem, offers an unprecedented 19.5-20.5% APR on UST. It has run smoothly for over a year without any problems, unlike many other stablecoins promising high returns but ended up rugpulling. > > [According to Electric Capital](https://youtu.be/_ZKsunlK7sA?t=4628), from December 2020 to December 2021, Terra is no.1 in the fastest growing ecosystems, in terms of growth of full time developers, at 313%. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/ru2mwy/top_10_terra_proarguments_january_2022/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive##wiki_terra.28luna.29) to find arguments on this topic in other rounds.
tldr; Stablegains customers are alleging they were misled by marketing that suggested the company was better diversified, when in fact, it deployed all investor funds in Anchor Protocol, the now-infamous savings app on Terra. As the UST stablecoin collapsed last week, the company said its 4,878 customers would likely lose most of the $47 million they entrusted to it. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*
Why hasn't USDN collapsed yet? It depegged at the same time as UST during the panic, but unlike the UST, it has regained the peg to some extent and remains only 2.5% below target. And yet I don't see why it should not follow the same fate as UST, since as far as I understand: - It is backed by WAVES, which has a lower marketcap than USDN, so it is not essentially not backed. - They advertise the same kind of ponzi 15% interest rate on staking What's going on with this coin?
tldr; UST lost its peg and the Luna token crashed to less than $0.001. UST is a stable coin that is bridged onto the Terra blockchain and is intended to be worth exactly $1. The Terra ecosystem incentivised people to trade Luna for UST when the price of UST floated too high, and to trade UST for Luna when its price fell too low. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*
Temporary 20% isn't that unusual and was never believed by anyone with a right mind to be sustainable. Defi protocols offer increased rewards all the time to steal liquidity from other protocols or to entice new users hoping the capital will stick after the rewards go back to normal/sustainable levels. That being said it wasn't 20% return that crashed Luna, the fundamental relationship between UST-LUNA did. Same thing could have happened with 2% returns. I'm kinda surprised nobody is talking about FRAX, as it has the same mechanic. It's partially backed so it can't go to like LUNA did but still has a depeg risk.
“Value” in this case is what someone is willing to pay. If I’m only willing to pay 5 cents/UST, it doesn’t mean somebody gets the other 95 cents that it should be worth. It’s basically a collapse of the collective belief that one UST is equivalent to $1.
Is like if you ask where is the 10% of my euros that has just disappeared this year against the dollar. It's just gone, no one have it. No one believes that the ratio euro dollar has to be at 1.1 The same with the UST stops to be valued at 1 busd, and the holders decide to swap it for less and less value (0.98, 0.8, 0.5, 0.05)... A bank run event could lead to a death spiral in the algorithm... And it happened
as a Binance user, I believe that 25% APY is only for staking upto UST2000(not sure specific number) or something. After that, its like 5% APY or sth like. So yeah people cant just throw millions into it. I staked SOL on Binance Earn for 13% APY in 90days but the maximum limit is 3SOL so yeahh its not much
Arguing what is or isn’t a ponzi or a rug relies a bit on how you define the terms, but in how I think of them I think it qualifies for both. Ponzi scheme: a financial instrument offering above average returns achieved by paying old investors using new investors money, creating a situation that can only sustain until withdrawals become greater than deposits. Rug pull: An event in a financial instrument where insiders use some form of deception to remove liquidity from the system. Distilled down, UST’s market cap was essentially a lie about how much liquidity was available within the system to be withdrawn, since billions of dollars of it were printed from thin air and never had been purchased. It’s a more elaborate version of Bernie Madoff sending account statements showing paper gains that weren’t actually available for redemption.
At least something positive can come out of the UST shit show. Tether has gotten away with ignoring most critics about transparency and full backing. Now they feel the pain for that. That is actually the charm of crypto. We can all "vote" with our money fast and cheap and NOW they are at least TRYING to improve.
This is wrong. Luna is not being minted. Swap fees from UST to Luna exploded during the crash, and it is slowly being distributed to stakers, entering circulating supply. No new Luna is being minted. https://twitter.com/stablekwon/status/1527994283134816256
It was built in to how Terra Luna functioned to keep the peg at $1. For the UST to keep its $1 peg more Luna has to be minted. Since the UST price kept dropping below $1, people would buy it up a and redeem it for $1 making a profit and minting more Luna in the process. It just keeps going like that forever
I mean what she *did* say was that > have said all along the crypto assets are highly speculative, very risky assets. My very humble assessment is that it is worth nothing. It is based on nothing, there is no underlying assets to act as an anchor of safety. So out of those points a) crypto assets are highly speculative (true) b) risky assets (also true) c) worth nothing (completely false) d) based on nothing (arguable, LUNA and UST crash lends some validity, but there ARE plenty of tokens with a sound base, it's just that shitcoins get a lot of attention) e) no underlying assets to act as anchor of safety (again see point d) So out of 5 points, 1 is completely false, and 2 are true, and the other 2 are arguable This is fairly balanced all things considered - unlike some comments I don't think attacking her will do anything really, but you do you, Peace
tldr; The UST collapse may lead to a tectonic shift in the crypto regulatory landscape. "Crypto assets could disrupt the international financial system if they are not regulated, overseen and interoperable in a consistent and appropriate manner across jurisdictions. We will probably [...] discuss these issues among many others at the G7 meeting in Germany this week." *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*
TLDR: Nox Bitcoin, a Brazilian cryptocurrency exchange, has decided to refund all UST holders at a $1 rate with Tether’s USDT. Nox Bitcoin spent approximately $US127,000 (620,000 reais) reimbursing all of its clients. Insider trading problems surge in the crypto ecosystem.
This is what Terra was doing: Burn 5 million premined Luna for UST in small batches over many wallets -> aggregate into larger wallets and bridge to ERC20 UST -> swap to MIM at a favorable rate timed to when degenbox would open up the leveraged UST farm, using degenbox depositors as exit liquidity -> swap the MIM to USDT or another major stable -> send to CEX All of this is verifiable on-chain. It didn’t just fail. It failed specifically because they were siphoning out the liquidity from the system using above average returns paid in bad debt as an incentive. It was a slow rug and a ponzi.
No it won't help UST regain its peg since LUNAs price is too low; you need to mint too many LUNA and cannot burn enough UST for it to regain peg anyway. All it'll do is crash Luna to 0. As for burning Luna, I didn't see any official statement about that; they'd have to do a buyback and burn. The main proposal really has been a fork of the original network.
“Why did you(CZ) resumed UST and LUNA trading knowing that it is a failed project and also Luna mint is still happening although you tweeted 'no more minting'?” I saw this question earlier, but it looks like it disappeared as I was answering. It was the most upvoted at the time. Here’s my answer: In a decentralized world, there are many other exchanges too. If we suspend trading, and prices move on other exchanges, what do you think the holders will say? We suspended trading briefly when the validators paused the blockchain, even that caused a lot of complaints, but I believe our action forced the validators to resume the network within a couple of hours. Lastly, no one is forcing anyone to buy just because trading is on. There are high risk tolerance buyers willing to take over from sellers. The market place is neutral.
Since September, they were taking 5 million Luna a month from the Genesis wallet, burning them for UST and dumping them onto people apeing into degenbox to extract liquidity from the system without affecting token price. They used a similar method to fund Anchor reserves when it kept running out. They siphoned liquidity from the system over time and paid people with what was essentially bad debt. IMO it meets the definition of a slow rug and a ponzi.
There was a proposal to make a new coin to be airdropped by holders of current Luna (which will be called Luna Classic). There are also no plans to have a stablecoin tied to new Luna. The proposal was rejected by the majority in a preliminary release in a public forum, but as for the actual voting, majority of the whales are voting in favor of it. I'm not sure if the voting period has closed, however. If that passes, then effectively Luna and UST are abandoned. Even if voting is still undergoing, it seems LFG doesn't have any plans to save current Luna and UST right now
Not sure what you are referring to. Binance always has risk warnings to users in all of our announcements. And to the best of my knowledge, we never said UST was “fiat backed”, etc. I’m 99% certain just a bad twitter conspiracy theory. Not sure about the Binance main account, but I do delete tweets all the time, mainly due to a lack of edit button. I just asked our team about this, there were some tweets about a specific APY, which is no longer true, so they deleted it as to not confuse new users.
I never invested in LUNA and I will continue to not touch LUNA, but if UST manages to get back to its peg, then isn’t it possible for the token supply to come back down? If LUNA were $0.0001 then it would burn 10,000 LUNA to create 1 UST. Of course, this requires them to somehow change the algorithm to incentivize burning huge swathes of LUNA, but they don’t really have a choice anyway, right?