To The Moon

Recently, the controversial stable currency "TerraUSD /UST", Luna, its cryptocurrency of the same series, fell to nearly $0, plummeting by more than 90%, together with the sharp drop in other cryptocurrencies. According to CoinMarketCap estimates, in the past 24 water hours The large-scale sell-off has evaporated more than $200 billion in wealth. Some industry insiders believe that this Luna's "explosion pot" was hit by the Russian-Ukish War, the U.S. Federal Reserve's water collection, the decline in the stock market and other factors, which caused the global risky assets to plummet. In addition, the growth of the application of Luna's ecosystem and the failure to exceed the speed of dividends. Under multiple blows, "As soon as the wind blows, there will be crowding on people. Mention the situation." At present, the main popular stable coins in the world are TEDA (USDT) and USD Coin (USDC). Generally speaking, stable coins are linked to physical assets such as the US dollar. If USDC issuer Centre promises, when every 1 USDC can be exchanged for $1 in cash; at the same time, it regularly reports through third parties to prove that it has sufficient asset reserves; there are also about $80 billion in assets behind Teda, including cash, treasury bonds and merchants. Business bill.

As for Terra, which happened this time, it is different. UST is an "algorithm stable coin", which is linked to the same token Luna 1:1. Do Kwon, the founder of Terra, is the non-profit organization "Luna Foundati" founded and responsible for stabilizing prices. " on Guard" is to choose Bitcoin as one of Luna reserves. When the price of UST rises to more than $1, the holder can exchange the $1-dollar Luna for UST and make a difference through arbitrage. On the contrary, the final price of the two will remain stable; every time you trade smart contract, a certain number of Luna will be destroyed to ensure its rarity. And the price.

TerraUSD was once the third largest stable currency in the world, and Luna has always been larger than UST. However, there was a sudden "decission" on the 8th of this month, and there was a price difference between Luna and UST. A large number of UST locked in "Anchor" flowed into the market, and the price stability mechanism failed. According to CoinMarketCap data, UST has fallen to $0.29 in the past week, attracting arbitrage trading investors and triggering Luna's selling pressure. Due to Luna, which is equivalent to 1UST, a large number of new Lunas have been cast according to the mechanism, greatly increasing market circulation, and Luna and UST have a "death spiral" decline. According to Terrascope data, Luna circulation has increased significantly to 1.15 trillion tokens, and the price has fallen to nearly $0.

Many people think that this incident reflects that UST is a "scam". Angus, co-founder of CoinUnited.io, pointed out in an interview that Luna is a super bold innovation for the market and attracts institutional investors, such as Three Arrow Capital and Jump Trading. He pointed out that in March this year, the Terra team realized that the interest rate of 20 percent was not sustainable, so it recommended to cut interest rates, but this year, the Russo-Ukrainian War, the rising temperature triggered the Federal Reserve's water collection, the decline in the stock market and other factors, which caused global risky assets to plummet. Because some people who hold UST are attracted by high returns, the application of the whole ecosystem has increased and the speed of dividends. Under multiple blows, "as soon as the wind blows and the grass moves, people will be squeezed." Cai Jiamin, the manager of the invalid hedge fund portfolio and co-founder of the Hong Kong Program Trading Research Center, with insufficient reserves, also believes that it is difficult to judge whether it is a scam from Terra's white paper alone. However, in recent years, many institutional investors have entered the market. If there is really a problem, "Smart Mo "Ney" may not invest. Like Angus, Cai Jiamin estimated that this "inclict" was purely a technically unable to withstand the pressure of selling and bursting. "It is 20 centimeters a year. Someone has said before that (spliance reserve) has been sent for more than two months. Many people pay attention to it. Even if no one explodes, it may burn the reserves, and the top. Contact the exchange rate."

Binance has reopened cash withdrawal and other business token prices have fallen like a free fall. The team has saved them in different ways, but the price is still not in danger. Terra said that the blockchain has been officially stopped in block 7607789, and the network has been stopped to propose a reconstruction plan; the trading platform Binance also said that some leverage and spot transactions have been removed for automatic closing and liquidation. Later, Binance issued an announcement pointing out that the Terra project has stopped adding LUNA tokens after communication, and the Terra blockchain has resumed block production. Therefore, Binance has opened LUNA/BUSD, UST/BUSD transaction pairs, and LUNA and UST recharge cash withdrawal business at 10 p.m. Hong Kong time today. Binance also pointed out that it will continue to promote the next plan proposed by Terra to ensure that users have sufficient risk assessment before trading LUNA and UST. Cai Jiamin laughed and said that Luna and UST had a big opportunity. "The family is a dead horse as a live horse doctor, and many exchanges have been removed from the shelves. You can't trade again. The exchange helped him announce his death." As for whether regulators will take this as a gap and launch regulatory measures, Angus points out that supervision is not a flood beast. If all scientific and technological innovations are supervised, investors can be protected. However, too much supervision will hinder innovation. A balance should be achieved between the two. "And everyone in the family is the most tightest. The position is a groping process." Due to the news, USDT once fell to $0.94864, "decised" 5%. Angus pointed out that Teda's dollar deposits will not pay dividends to investors, and they can also buy bonds to collect interest. Its business model is stable and sustainable. It is believed that it is only dragged down by this incident and affected in the short term.

@TigerStars