buy and forget… for the giggles and maybe wonders… as well couple 100s.
I’m sorry for some guys having all net worth in LUNA…
I bought 200 Luna just for fun 
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I wonder if on Kraken Luna staking there will be still UST and LUNA distributed… and how much it will be.
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Don’t know why I care, but plz someone explain it to me in one sentence, what is Terra, TerraUSD and Luna? Why are these names all put together?
Terra is the network (I think on top of another one). LUNA and TerraUSD (UST) are tokens on this network. UST is stablecoin and LUNA is used (somehow) to peg the UST to USD.
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not correct… I google… built with cosmos SDK
Basically very intricate houses built on sand (aka hope), as far as I understand. I find it curiously fascinating.
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Terra itself was created in January 2018, LUNA was (approximately) created in April 2019, while TerraUSD (UST) was only created in September 2020 (as a stablecoin).
What killed LUNA was the link to UST. As long as 1 UST = 1 USD, everything is fine. If the rate drops significantly, you can earn a lot of money using arbitrage by burning UST and minting LUNA. That’s what happened yesterday and two days ago - someone making BIG arbitrage gains (we’re talking billions of USD) by using this mechanism.
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Cool, thanks guys. But all these people who have invested their money in LUNA haven’t known about this potential exploit? Even the founder didn’t know?
Here you can watch a Ben Felix style video about what happened with UST und LUNA (minus the advertisement around 10:50) Much better explained than I could ever do it.
The founder is an a$$hole who behaved like he’s the king of the world in the past. Inflated ego squared. So either he simply didn’t know, or just chose to ignore it.
The founder knew about the risk already half a year ago, when someone mentioned it to him on Twitter. I’m just searching to find where it was…
Or maybe even worse: he knew about it right from the beginning: https://twitter.com/realryunsu/status/1524321203590418433
Edit: @hereby hereby just posted the link. Thanks!
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Well people where blinded by the 20% APR and the fact that LUNA had insane gains over 2 years (since every ust created lowered the LUNA in circulation).
Hard to stay rational when you are always winning…
And now LUNA is positioned #392 at coinmarketcap! Incredible.
Liquidated all UST positions. Not a time for side bets, I need funds to save my main leveraged portfolio.
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So what went wrong? Was the problem that Luna was worth 0? If Luna was mined by consuming energy, would it be then worth something?
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You can read the rest of the article, I don’t think we know the details, but there was a loss of confidence (maybe triggered by external event, it’s also slightly more complicated since they’re trying to sustain the rate with BTC reserves that were built over time as well, which also adds pressure to BTC).
As mentioned, those coins are sustained by confidence in the end the terra is worth 0 or 1 (and probably won’t stay very long in the middle).
So maybe that’s a buy opportunity, if the magic is reoccurs, UST will double.
There’s no reason it would change anything, how you create coin doesn’t add to the value.
The videos by Coffeezilla on LUNA and UST are quite interesting. If everything is true, this was a massive scheme that ended right where it ought to.
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And now a hopefully related question. I am borrowing USDT to open leveraged crypto positions. If the price of USDT drops, nice for me, my loan is lower. But: is it possible to organize a short squeeze or whatever it’s called, by pushing the price of USDT much higher than 1 USD? Because if for example USDT goes up to 2 USD, my positions would be liquidated.
First of all: I’m no expert on stablecoins. I can only tell you from what I know and read, plus connecting some missing dots from my gut feeling.
2nd: please don’t take my words as criticism or offense. I’m trying to be as kind as I can (doesn’t always work).
I’m pretty sure this is not possible (1 USDT = 2 USD). If it would be - everyone would immediately sell all his USDT positions to get double the amount of real US dollars. Which means USDT would drop like a stone. Yes, you might say “that’s what happened with UST”, but it’s a different story. UST dropped against USDT, not the real US dollar. On another note: there is no USDT/USD currency pair (at least on KuCoin and Binance - just quickly checked).
Personally I don’t think that this scenario is possible. As said above: everyone would immediately sell all USDT to get a risk free 2x
This is the part where I am worried. Yes, if the price of USDT drops, your loan is going to be lower. Please note that it will drop for pair like USDT/BTC or USDT/ETH or other crypto/crypto pairs. Another option would be USDT/EUR and USDT/CHF, if it’s a crypto/FIAT pair.
The part which is worrying me is that you are using leverage in crypto. This is something which can massively backfire. You have market makers on CEXs, you have crypto whales, you have all sorts of scams going on. So even if you pick the right coin and get your assumption correct, you can still get stopped out (assuming you are using SL/TP - which you should do if you are using leverage) by scam wicks etc. Leverage is something which is risky in traditional stock markets already. In crypto, it’s playing with fire next to a gasoline tank. Just take my words as a warning.
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wouldn’t that be true for every currency ? In most cases even the cash is worth less than the material inside. Even gold mining is only fueled by it’s perceived value, since industrial and jewellry needs could be covered by recycling at lower costs.
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