Luna’s mistakes back then weren’t only about the targeting problem. The people doing the targeting probably didn’t think their funds could really move it, right?
The later mysterious operations were the final straw that broke the Terra community’s back. The key was that it held a large amount of Bitcoin; it had a system that provided arbitrage funding on an infinite basis within a fixed range; and it lacked both immediate liquidity and a sufficient safety reserve. One of the crucial reasons traditional banks can play it well is that they have immediate liquidity reserves.
UST de-pegged, market sentiment stayed low. Selling Bitcoin to buy back (to replenish) UST made sentiment even worse. Then as Bitcoin fell, market sentiment became even more subdued, and panic spread more easily.
That’s how the Terra community just said goodbye. What it needed to hold in reserve was USDT, so it’s unlikely that such crazy evaporation would occur. Back then, the richest man also asked, somewhat puzzled: “A large Bitcoin reserve asset—why?”
It’s Bitcoin, not a stablecoin. It affects the market’s overall sentiment. The more Bitcoin is used to buy back, the more is sold, and the more it falls; the more it falls, the more panic—until the slogan that “UST goes to zero” turns from a catchphrase into a real panic stampede.
Terra going to zero is a structural/systemic problem. God doesn’t allow infinite arbitrage within a fixed range.
$LUNA $LUNC $USTC #LUNA
The later mysterious operations were the final straw that broke the Terra community’s back. The key was that it held a large amount of Bitcoin; it had a system that provided arbitrage funding on an infinite basis within a fixed range; and it lacked both immediate liquidity and a sufficient safety reserve. One of the crucial reasons traditional banks can play it well is that they have immediate liquidity reserves.
UST de-pegged, market sentiment stayed low. Selling Bitcoin to buy back (to replenish) UST made sentiment even worse. Then as Bitcoin fell, market sentiment became even more subdued, and panic spread more easily.
That’s how the Terra community just said goodbye. What it needed to hold in reserve was USDT, so it’s unlikely that such crazy evaporation would occur. Back then, the richest man also asked, somewhat puzzled: “A large Bitcoin reserve asset—why?”
It’s Bitcoin, not a stablecoin. It affects the market’s overall sentiment. The more Bitcoin is used to buy back, the more is sold, and the more it falls; the more it falls, the more panic—until the slogan that “UST goes to zero” turns from a catchphrase into a real panic stampede.
Terra going to zero is a structural/systemic problem. God doesn’t allow infinite arbitrage within a fixed range.
$LUNA $LUNC $USTC #LUNA
