UST Scheme!!!

I dont know about you guys, but for me just looks like that this Luna / UST thing was a huge scheme.

Can some one tell me where did go that 19B that the anchor protocol had?

What I learned from this is that there is no such a “stablecoin” thing. I can deal with losses on any altcoin or even on the bitcoin, but not on a coin that was sold as a “sablecoin”

I am so sure that some guys got a lot of money out of it, becouse the money doesn´\`t desapear it is tranfered from one place to another.

I guess this that has just happened with Luna could happen with so many others “stablecoins” YUSD, pearhaps maybe even the BUSD

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4 thoughts on “UST Scheme!!!”

  1. Thing is algo stable coins never ended good. Being backed with market cap and buying demand of an token/another crypto which are variables that always change, its like building an card tower, will fall in case of things getting shaky, its a death spiral ones a bankrun is initiated. Just not sustainable. Normak stables are not much better but much harder to manipulate or depegg them.

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  2. Most stablecoins are collateralized, backed either by the actual fiat they were exchanged for or, more often, by investments made by the minting foundation. So the minting foundation is really like a bank or hedge fund, lending and investing user funds, generating a profit, and then paying dividends back to them (high APR) and covering administrative costs.

    UST on the other hand was not backed by anything except LUNA and some other cryptocurrencies like BTC, ETH, etc, but not in sufficient amounts. When crypto is all going up, this isn’t a problem, but when it collapses like it did last week, then you see the weaknesses of their project. Users were promised that one UST will always be exchangeable for $1 in LUNA and for every UST minted, $1 worth of LUNA is burned and vice versa, creating an equilibrium of sorts between the two, but when LUNA began crashing as people sold off, it became apparent that all the UST currently minted would soon exceed the market-cap of circulating LUNA. To counteract this, LUNA began minting more of itself as it was designed to do, so that it remained able to cash-out UST. Of course, this causes inflation, devaluing LUNA even faster, and causing loss of investor confidence, leading to a run on the bank. Eventually, it became obvious that UST couldn’t sustainably be exchanged for $1 of LUNA and it became de-pegged. After that, panic imploded the project and hyperinflation exploded. I think the circulating supply of LUNA went from 10M to 250B in the last week.

    Everyone warned about Tether not being properly collateralized and it’s probably true, you might see a similar situation if everyone simultaneously tried to cash-out, but it was always pretty clear that UST was far more risky if you read their whitepaper.

    In fact, this same scenario almost played out in the last crash, but they were able to weather the storm with their treasury long enough for prices to recover and maintain user faith in the project. They lost user-faith this time and I’m afraid it will be impossible to recover. It’s dead.

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