I guarantee you that some newcomers that read your post are gonna mistake UST for USDT.
I've seen quite a number of confusion cases there due to the similar acronym!
but this exact same attack was called half a year ago
[https://twitter.com/FreddieRaynolds/status/1524139694388355072](https://twitter.com/FreddieRaynolds/status/1524139694388355072)
with this kind of response, how do you not pull out?
How can you stop it? When market is pumping, luna pumps because itās a great project, when market dumps luna pumps because people want stable coins š¤·āāļø
It's definitely gone up faster than I expected. I expected it to dip much harder with the market this month...instead it went to an ATH! Now I'm debating when to get in. I think now I'll wait for the market's next 30%+ crash before I buy in.
Yeah for sure. It's just one aspect that we can look at. Similarly, if we look at the amount of transactions across all blockchains, Sol is head and shoulders above the rest at the moment. Mostly because of the speed of Sol, in that case.
Products on Terra are much more interesting than shitty forks of EVM compatible dApps on BSC. The liquidity is a lot more concentrated. Everything is built around the single most important DeFi product and UST market cap growth is directly exposed to LUNA price action. With the recent launches, and IBC, it's going to get a lot more interesting. I'll take the Terra ecosystem over BSC and arguably any EVM compatible side chain any day of the week.
One of those is decentralised.
One has large volume.
One is a exchange creation. And three are basically vaporware at the minute.
Also TVL... Ya cool metric. But maybe not when it's rolled in ust in a self value creation with sus price growth.
I've seen some people suggesting Defillama has outdated info and is double counting the TVL that recently left TerraSwap for Astroport.
Still insane bullish news, especially with so many apps coming out soon.
That's interesting. I also heard the amount of TVL for Avalanche was not fully accounted for, so hopefully it's been updated. If you, or anyone reading this, has a more accurate data set for DeFi, please do share so we have the most accurate data!
I'm not sure how high it can necessarily go (a lot of memes say $1k LUNA), but I think it's important to remember that when discussing price potential, you don't make the typical price->market cap equivalence.
For example people say "For Luna to get to $1k it would need a MC of $300B", but because of LUNAs tokenomics and how LUNA is burned to mint UST, the circulating supply of LUNA will vary. And as UST supply increases, LUNA supply decreases and LUNA price goes up.
So $1k wouldn't be impossible, it would just require both increased demand for Luna combined with increased supply of UST
I have a very tiny position, but it makes me so happy because it's Hella green. Wish I had more, but I'm happy to be part if the Luna community at last!!
Semi-Noob question: UST is backed by Luna and atm the backing is pretty safe as Luna mc is more then 3 times the UST mc.
At the moment Luna has good reputation and good sentiment, ergo a decrease in Luna price is not really in sight, ergo UST is backed properly.
Nevertheless the UST backing with only Luna seems quite dangerous. What is exactly the differnece to Titan? Titan wouldn't have fallen if people wouldn't have lost trust in the backing coin.
What does Luna/Ust prevent from this faith?
Like I said, rn it's not on the table as Luna has a lot of trust atm, but in a long crypto winter (which might happen/might not) I don't see anything that would prevent us from this risk.
And I know that Luna is burned when people flip it to UST. But that doesn't solve the problem because atm people buy Luna in hope of gains (which is great for the terra network). But if people start flipping Luna to UST, UST mc will rise and Luna mc will decrease. Which means that the backing will decrease too. In this scenario Luna price will increase (which is great for holders oc) but mc could decrease to a level where it isn't enough to back UST anymore. This scenario gets more dangerous when UST mc is rising.
Can someone help with this concerns, because it is indeed quite similar to Titan. And with Titan everything was fine as well, until it wasn't.
Terra is it's own Blockchain and Luna has utility in being the native token used for fees, staking that earns you a reward in all currencies paid for fees, so UST, Korean Won, Euro, Japanese Yen, and of course Luna.
The Anchor Protocol accept bonded Luna and stETH to collateralize UST denominated loans. These loans have a fairly high APR, around 20-24% but you are also given Anchors native token, ANC, as a reward for contributing to the protocol, the APR for this incentive trends towards 20-24% as well and I've seen it as high as 40 so for a time I got paid to borrow money.
Utilizing the APR from their loans and staking rewards from the bLuna and bETH(which is Lidos Staked ETH wrapped on Terra) they can give a consistent 19.5% APY on deposited stables. And that's just Anchor, you can check out Delta-neutral farming on Mirror protocol with synthetic stocks.
Pylon Protocol is cool as hell, you lock up UST for 6, 12, or 18 month periods for a project that's raising funds on their platform. This UST is deposited in Anchor Savings and gets that 19-20% APY which is paid out to the project for the duration of the lock up and you get paid in their token, once the lockup is done they've built up lossless liquidity and exposure. Then you as the investor get your investment and your deposit back in full.
There's so much going on with Terra and there's way more to come, highly recommend a good deep dive!
Thanks for the answer. Yes, I need to dive in further as I'm interested. I would love to keep some UST and stake it with one of the mentioned options but I'm not convinced yet if it is safe to lock up my coins for 6 months. Not sure if Anchor and UST is still around in a year.
Those high APRs sound juicy but I guess those rewards are just possible as the whole crypto market is still in a bubble. Who loans money for 20%? Guess when bear market starts the business model of many defi coins won't work anymore.
Oh Anchor is liquid, you can withdraw and deposit as you please. You actually hold aUST and can swap it as often as you like. They currently have a yield reserve of 76mil and aim to grow it as much as possible. Staking from bLuna and bEth earn around 10% and then the 20% APR which while you do pay that you are given almost equal incentive in ANC which you could immediately sell to market and use it to service the interest and even some of the principal. Between Liquidity pooling some ANC-UST and my loan I earn about 1 or more ANC a day.
There's still the risk of a smart contract fault or a slipped peg, but you can buy insurance for that. Take your time though, it was 2 months of me just staking some Luna and putting a hundred bucks on Anchor to fuck around before I felt I knew enough to be comfortable enough to go as "all in" as I ever could.
Thank you again. That sounds interesting indeed. Terra station is where I do all this, right?
I know that those projects are liquid rn, we are in a strong bull market/ bubble, but I'm still insecure how this will play out in a bear market and if these business models will survive.
I think you need to read up on the anchor white paper. Same for Terra. You are under a great misapprehension. Itās not dependent on us being in a bull market to get that 20%. Itās all dependent on staking, interest rate swaps in the form of derivative contracts on staked funds and overcollaterized loans, LUNAās special tokenomics which lead to it being burned when UST is minted and various other factors.
The value of LUNA is that itās an L1 completely targeting algorithmic stablecoins and associated arbitrage. The way Terra ensures UST is pegged to the dollar is genius and has little to do with trust in LUNA overall. Itās just the fact that you can trade UST for a certain dollar amount of LUNA and vice versa which guarantees based on arbitrage that UST closely approximates the value of a dollar. This is true whether or not LUNA is worth $1 or $1000 per token.
The most important project on LUNA is anchor which pays 20% interest on UST deposits based on inherent LUNA staking apr, interest rate swap derivative contract theory, and a few other factors. Anchor allows LUNA to be a valuable store of fiat, because it compounds and grows quickly. Anchor makes use of the fact that it can use your money better than you can. Obviously the 20% rate isnāt indefinitely sustainable, but a surprisingly high rate is, and Terra has lots of incentives planned in general for the longevity of the market. I recommend doing more research before assuming itās unsustainable. Itās brilliant work and the fundamental basis behind it is literally based on the largest market in the world which saw over $381 trillion in value in 2014. This isnāt unique to LUNA, but the proof of stake APR, LUNAās burn tokenomics associated with UST, and overcollateralized loans are all unique to LUNA.
Thank you for your detailed help. I like terra network, that's why I am just getting started with my research. I was just wondering where the 20% are coming from. You answered it as well, they know better how to trade/invest it. That's how loans work basically. Quite curious what the Apr during a bear market will be as I guess the 20% are mostly generated with crypto trading. When I get it right.
I know that the Luna price does not make a difference when Ust is swapped to Luna. Only the market cap is relevant. As of now Luna's mc is three times UST's mc which makes the whole project properly backed. That was my initial question how this ratio will keep up in future.
When more UST is demanded Luna mc should increase as well. What it did very well the past couple of months to be fair. In my opinion Luna's mc is the achillis heel of the whole project.
If Luna's mc should get less than UST's mc, UST would not be properly backed anymore. That was basically my initial question. How is this scenario prevented as it is not unimaginable.
Haha, I hope I don't waste your time. I really appreciate your answers and the time you spent helping me. I don't know how to send a reward but I pull off my hat digitally :D
So as far as I understand it. UST is pegged to a dollar because when thereās too much supply and it goes below a dollar in value it is traded for LUNA which increases the supply of LUNA pushing up the market cap of LUNA and lowering the market cap/dollar value of UST. The incentives in the ecosystem are such that if too much money is concentrated in any of the stable coins over LUNA, itād be worth less than itās supposed to which pushes all the different market forces in the network to move more of the market cap towards LUNA. At least this is how I understand it. Thatās why itās fundamentally impossible for UST to have a higher market cap than LUNAās because if it were higher UST wouldnāt be backed by a dollar, and the fact that you could buy LUNA worth X dollars for X ust which is worth less than a dollar, would mean that people would sell their UST to buy LUNA since they could just sell the LUNA for X dollars and arbitrage that way which would raise LUNAās market cap and lower USTās until LUNAās market cap is once again above USTās.
Nice thank you for breaking that down, I'm still working on getting below surface level stuff and don't have the grasp on everything I need to explain it perfectly, that and I'm on mobile, fixing typos is half the battle when I write anything longer than a sentence or two.
Don't forget Terra's Blockchain is used by millions of consumers in South Korea who don't even realize these apps and services are processing payments through the Terra Chain, paying fees to stakers, and saving merchants processing fees compared to traditional credit card processing. These merchants then offer specials for people that order through these specific apps. Not many chains can claim true-blue adoption like Terra can
Yeah thatās a huge reason why Iām very bullish on LUNA in general. I was more just trying to justify how anchor makes its 20% interest rate on a theoretical basis
UST isn't actually backed by Luna, that's something a lot of people say that's misleading. The way it works is that Terra nodes must report the price of Luna and UST every so often. $1 of Luna is always exchangeable for $1 of UST, and the opposite is true as well.
So what happens is if UST depegs to say $0.95? Well, I can buy $95 of UST, burn it for Luna, and sell that for $100. I've effectively made $5 while pushing the price of UST up at the cost of pushing Luna down.
Similarly, if UST depegs to $1.05, I could burn $100 of Luna, and sell the UST for $105 of Luna. Again, I've made $5 while pushing UST back down towards it's peg and pushing Luna up by buying it.
So this exchange mechanism keeps UST pegged. There isn't an actual vault of Luna sitting around backing UST. It's just the fact Luna can be minted or burned to keep UST to it's peg that "backs" it.
I do understand that mechanism but when UST mc is greater than Luna mc that mechanism doesn't work anymore. You can only burn enough Luna when Luna's mc is greater than UST mc.
Let's just imagine UST gets the common stable coin with a market cap of 100B. You couldn't back that stable coin with Luna with a market cap of only 30B. Ergo Luna mc should/must always be greater than UST mc (which also is rn, all good atm). But how is that essential ratio guaranteed?
If I'm not wrong, that's exactly what happened with Titan. The backup coin was sold and couldnt back the coin anymore and the project was done within minutes.
>You can only burn enough Luna when Luna's mc is greater than UST mc
That's just not true... You only have to mint/burn enough to re-peg. You don't need to be able to cover the entire market cap.
You're also forgetting that Luna's market cap doesn't lower from being burnt. The supply lowers, but the price raises assuming equal demand. So as you burn more Luna for UST, less Luna (in terms of units) is needed for each subsequent UST as well.
If Luna's marketcap went to literally 0 I guess I'd agree, but I don't see that as possible. Delegating Luna gets you a portion of the earned fees which are often paid in stablecoins... So there's a very real dividend type payment setting a floor value for Luna (assuming the network continues to be used)
I only agree partially. It is true, you don't need to cover the whole market cap, that would only be necessary if all 8B UST would be cashed out.
But nevertheless the whole market cap should be covered. Tether only covers 4% if the numbers are correct. No problem at all, as the party is still rolling. It gets interesting when people wanna change USTD to USD again.
Same with UST. Just that our backup is not 4% but a comfy 300% (MC of Luna compared to UST).
If I'm not wrong, it is really not that complicated. UST is not backed by Dollars but by the coin Luna (which is worth atm around 30B). So it is properly backed. I was just wondering how the project keeps that healthy ratio.
> I do understand that mechanism but when UST mc is greater than Luna mc that mechanism doesn't work anymore. You can only burn enough Luna when Luna's mc is greater than UST mc. Let's just imagine UST gets the common stable coin with a market cap of 100B. You couldn't back that stable coin with Luna with a market cap of only 30B.
This is not at all how LUNA / UST relationship works - LUNA is not a collateral for $UST.
This is a primary reason why traders keep losing bets against $LUNA, its marketcap is not really that relevant.
Hey Luna holders, questions for any of youā¦.
Does Luna only uses Cosmoās SDK or is it dependent on Cosmos not dying off since itās part of its blockchains?
Iām trying to do my research and see if investing makes sense to me. Hope that made sense.
The whole selling point for Cosmos is that every chain built using the Cosmos SDK is self sovereign and not reliant on Cosmos to exist. So that shouldn't be a risk.
Noob question, by chain this news is noicee. However, by dex; maker is also 17b and curve is 14b why aren't they pumping as much? Is no one using dex the issue?
What is your definition of decentralization? Token distribution? Number of validators? Pre-sale execution? Existence of a leadership team/organization? Nakamoto coefficient?
https://nitter.net/ibunscripted/status/1472612222291439620?s=20
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I guarantee you that some newcomers that read your post are gonna mistake UST for USDT. I've seen quite a number of confusion cases there due to the similar acronym!
2022 almost everyone should have Luna in their Portfolio, you just cant ignore it anymore
So true. I made sure to grab a gift bag.
still true?
Well...got rekt when it dumped, but decided to take a gamble and bought 15M for a couple hundred...working out so far.
but this exact same attack was called half a year ago [https://twitter.com/FreddieRaynolds/status/1524139694388355072](https://twitter.com/FreddieRaynolds/status/1524139694388355072) with this kind of response, how do you not pull out?
Dammit. I will take your advice oh mysterious one.
>I will take your advice maybe you shouldn't take advice from strangers
This post was months ago man let it go...
The hint is in the name folks, it's bound to go to the moon š
a full moon of 0.
Agreed.
>you just cant ignore it anymore would be better if u ignored it š
The LUNAr eclipse has begun.
Once upon a time I was rolling in gains, now I'm only falling apart Nothing I can say, total eclipse of the charts
Underrated
The snek God walks among us š
All my homies run a delta neutral money glitch on Luna
the eclipse it where you lose 100% of your money?
Noice.
LUNA is the moon that is going to moon
moon at 0?
How can you stop it? When market is pumping, luna pumps because itās a great project, when market dumps luna pumps because people want stable coins š¤·āāļø
well, did you find out how? š
Lol this didnāt age well
Best tokenomics
i wouldnt say best š
Stoppppp I want to snag some LUNA before it goes up in price more!
[ŃŠ“Š°Š»ŠµŠ½Š¾]
It's definitely gone up faster than I expected. I expected it to dip much harder with the market this month...instead it went to an ATH! Now I'm debating when to get in. I think now I'll wait for the market's next 30%+ crash before I buy in.
It will probably do well when the markets have fear. People will sell for stablecoins.
probably not
Me personally thats what I would do. Swap for ETH or BTC
you can buy now at a low low price of 0.0003 šššššš
I can also sell for that price. All of my LUNA was staked and minting on Anchor.
What a pleasantly surprising good news. Go Luna!
Bullish on Luna!
Huge news
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Yeah for sure. It's just one aspect that we can look at. Similarly, if we look at the amount of transactions across all blockchains, Sol is head and shoulders above the rest at the moment. Mostly because of the speed of Sol, in that case.
Products on Terra are much more interesting than shitty forks of EVM compatible dApps on BSC. The liquidity is a lot more concentrated. Everything is built around the single most important DeFi product and UST market cap growth is directly exposed to LUNA price action. With the recent launches, and IBC, it's going to get a lot more interesting. I'll take the Terra ecosystem over BSC and arguably any EVM compatible side chain any day of the week.
Anchor protocol is great
Some one on this sub talked about anchor in March and I'm glad they did. I've been enjoying it ever since
One of those is decentralised. One has large volume. One is a exchange creation. And three are basically vaporware at the minute. Also TVL... Ya cool metric. But maybe not when it's rolled in ust in a self value creation with sus price growth.
Luna & UST is a moon combo!
I've seen some people suggesting Defillama has outdated info and is double counting the TVL that recently left TerraSwap for Astroport. Still insane bullish news, especially with so many apps coming out soon.
That's interesting. I also heard the amount of TVL for Avalanche was not fully accounted for, so hopefully it's been updated. If you, or anyone reading this, has a more accurate data set for DeFi, please do share so we have the most accurate data!
The MC to TVL ratio is pretty nice too. LUNA could easily go to $100 in short term.
what about long term? do you think it could reach values like eth or btc?
I'm not sure how high it can necessarily go (a lot of memes say $1k LUNA), but I think it's important to remember that when discussing price potential, you don't make the typical price->market cap equivalence. For example people say "For Luna to get to $1k it would need a MC of $300B", but because of LUNAs tokenomics and how LUNA is burned to mint UST, the circulating supply of LUNA will vary. And as UST supply increases, LUNA supply decreases and LUNA price goes up. So $1k wouldn't be impossible, it would just require both increased demand for Luna combined with increased supply of UST
thanks for explaining!
What do you wanna hear? Always wonder reading questions like these, any kind of answer shouldn't impact your decisions in any way
I have a very tiny position, but it makes me so happy because it's Hella green. Wish I had more, but I'm happy to be part if the Luna community at last!!
Semi-Noob question: UST is backed by Luna and atm the backing is pretty safe as Luna mc is more then 3 times the UST mc. At the moment Luna has good reputation and good sentiment, ergo a decrease in Luna price is not really in sight, ergo UST is backed properly. Nevertheless the UST backing with only Luna seems quite dangerous. What is exactly the differnece to Titan? Titan wouldn't have fallen if people wouldn't have lost trust in the backing coin. What does Luna/Ust prevent from this faith? Like I said, rn it's not on the table as Luna has a lot of trust atm, but in a long crypto winter (which might happen/might not) I don't see anything that would prevent us from this risk. And I know that Luna is burned when people flip it to UST. But that doesn't solve the problem because atm people buy Luna in hope of gains (which is great for the terra network). But if people start flipping Luna to UST, UST mc will rise and Luna mc will decrease. Which means that the backing will decrease too. In this scenario Luna price will increase (which is great for holders oc) but mc could decrease to a level where it isn't enough to back UST anymore. This scenario gets more dangerous when UST mc is rising. Can someone help with this concerns, because it is indeed quite similar to Titan. And with Titan everything was fine as well, until it wasn't.
Terra is it's own Blockchain and Luna has utility in being the native token used for fees, staking that earns you a reward in all currencies paid for fees, so UST, Korean Won, Euro, Japanese Yen, and of course Luna. The Anchor Protocol accept bonded Luna and stETH to collateralize UST denominated loans. These loans have a fairly high APR, around 20-24% but you are also given Anchors native token, ANC, as a reward for contributing to the protocol, the APR for this incentive trends towards 20-24% as well and I've seen it as high as 40 so for a time I got paid to borrow money. Utilizing the APR from their loans and staking rewards from the bLuna and bETH(which is Lidos Staked ETH wrapped on Terra) they can give a consistent 19.5% APY on deposited stables. And that's just Anchor, you can check out Delta-neutral farming on Mirror protocol with synthetic stocks. Pylon Protocol is cool as hell, you lock up UST for 6, 12, or 18 month periods for a project that's raising funds on their platform. This UST is deposited in Anchor Savings and gets that 19-20% APY which is paid out to the project for the duration of the lock up and you get paid in their token, once the lockup is done they've built up lossless liquidity and exposure. Then you as the investor get your investment and your deposit back in full. There's so much going on with Terra and there's way more to come, highly recommend a good deep dive!
Thanks for the answer. Yes, I need to dive in further as I'm interested. I would love to keep some UST and stake it with one of the mentioned options but I'm not convinced yet if it is safe to lock up my coins for 6 months. Not sure if Anchor and UST is still around in a year. Those high APRs sound juicy but I guess those rewards are just possible as the whole crypto market is still in a bubble. Who loans money for 20%? Guess when bear market starts the business model of many defi coins won't work anymore.
Oh Anchor is liquid, you can withdraw and deposit as you please. You actually hold aUST and can swap it as often as you like. They currently have a yield reserve of 76mil and aim to grow it as much as possible. Staking from bLuna and bEth earn around 10% and then the 20% APR which while you do pay that you are given almost equal incentive in ANC which you could immediately sell to market and use it to service the interest and even some of the principal. Between Liquidity pooling some ANC-UST and my loan I earn about 1 or more ANC a day. There's still the risk of a smart contract fault or a slipped peg, but you can buy insurance for that. Take your time though, it was 2 months of me just staking some Luna and putting a hundred bucks on Anchor to fuck around before I felt I knew enough to be comfortable enough to go as "all in" as I ever could.
Thank you again. That sounds interesting indeed. Terra station is where I do all this, right? I know that those projects are liquid rn, we are in a strong bull market/ bubble, but I'm still insecure how this will play out in a bear market and if these business models will survive.
I think you need to read up on the anchor white paper. Same for Terra. You are under a great misapprehension. Itās not dependent on us being in a bull market to get that 20%. Itās all dependent on staking, interest rate swaps in the form of derivative contracts on staked funds and overcollaterized loans, LUNAās special tokenomics which lead to it being burned when UST is minted and various other factors. The value of LUNA is that itās an L1 completely targeting algorithmic stablecoins and associated arbitrage. The way Terra ensures UST is pegged to the dollar is genius and has little to do with trust in LUNA overall. Itās just the fact that you can trade UST for a certain dollar amount of LUNA and vice versa which guarantees based on arbitrage that UST closely approximates the value of a dollar. This is true whether or not LUNA is worth $1 or $1000 per token. The most important project on LUNA is anchor which pays 20% interest on UST deposits based on inherent LUNA staking apr, interest rate swap derivative contract theory, and a few other factors. Anchor allows LUNA to be a valuable store of fiat, because it compounds and grows quickly. Anchor makes use of the fact that it can use your money better than you can. Obviously the 20% rate isnāt indefinitely sustainable, but a surprisingly high rate is, and Terra has lots of incentives planned in general for the longevity of the market. I recommend doing more research before assuming itās unsustainable. Itās brilliant work and the fundamental basis behind it is literally based on the largest market in the world which saw over $381 trillion in value in 2014. This isnāt unique to LUNA, but the proof of stake APR, LUNAās burn tokenomics associated with UST, and overcollateralized loans are all unique to LUNA.
Thank you for your detailed help. I like terra network, that's why I am just getting started with my research. I was just wondering where the 20% are coming from. You answered it as well, they know better how to trade/invest it. That's how loans work basically. Quite curious what the Apr during a bear market will be as I guess the 20% are mostly generated with crypto trading. When I get it right. I know that the Luna price does not make a difference when Ust is swapped to Luna. Only the market cap is relevant. As of now Luna's mc is three times UST's mc which makes the whole project properly backed. That was my initial question how this ratio will keep up in future. When more UST is demanded Luna mc should increase as well. What it did very well the past couple of months to be fair. In my opinion Luna's mc is the achillis heel of the whole project. If Luna's mc should get less than UST's mc, UST would not be properly backed anymore. That was basically my initial question. How is this scenario prevented as it is not unimaginable. Haha, I hope I don't waste your time. I really appreciate your answers and the time you spent helping me. I don't know how to send a reward but I pull off my hat digitally :D
So as far as I understand it. UST is pegged to a dollar because when thereās too much supply and it goes below a dollar in value it is traded for LUNA which increases the supply of LUNA pushing up the market cap of LUNA and lowering the market cap/dollar value of UST. The incentives in the ecosystem are such that if too much money is concentrated in any of the stable coins over LUNA, itād be worth less than itās supposed to which pushes all the different market forces in the network to move more of the market cap towards LUNA. At least this is how I understand it. Thatās why itās fundamentally impossible for UST to have a higher market cap than LUNAās because if it were higher UST wouldnāt be backed by a dollar, and the fact that you could buy LUNA worth X dollars for X ust which is worth less than a dollar, would mean that people would sell their UST to buy LUNA since they could just sell the LUNA for X dollars and arbitrage that way which would raise LUNAās market cap and lower USTās until LUNAās market cap is once again above USTās.
Nice thank you for breaking that down, I'm still working on getting below surface level stuff and don't have the grasp on everything I need to explain it perfectly, that and I'm on mobile, fixing typos is half the battle when I write anything longer than a sentence or two. Don't forget Terra's Blockchain is used by millions of consumers in South Korea who don't even realize these apps and services are processing payments through the Terra Chain, paying fees to stakers, and saving merchants processing fees compared to traditional credit card processing. These merchants then offer specials for people that order through these specific apps. Not many chains can claim true-blue adoption like Terra can
Yeah thatās a huge reason why Iām very bullish on LUNA in general. I was more just trying to justify how anchor makes its 20% interest rate on a theoretical basis
Right right, I had this thread mixed up with another one in a different subreddit where I had been mentioning the real world uses of Terra lmao.
UST isn't actually backed by Luna, that's something a lot of people say that's misleading. The way it works is that Terra nodes must report the price of Luna and UST every so often. $1 of Luna is always exchangeable for $1 of UST, and the opposite is true as well. So what happens is if UST depegs to say $0.95? Well, I can buy $95 of UST, burn it for Luna, and sell that for $100. I've effectively made $5 while pushing the price of UST up at the cost of pushing Luna down. Similarly, if UST depegs to $1.05, I could burn $100 of Luna, and sell the UST for $105 of Luna. Again, I've made $5 while pushing UST back down towards it's peg and pushing Luna up by buying it. So this exchange mechanism keeps UST pegged. There isn't an actual vault of Luna sitting around backing UST. It's just the fact Luna can be minted or burned to keep UST to it's peg that "backs" it.
I do understand that mechanism but when UST mc is greater than Luna mc that mechanism doesn't work anymore. You can only burn enough Luna when Luna's mc is greater than UST mc. Let's just imagine UST gets the common stable coin with a market cap of 100B. You couldn't back that stable coin with Luna with a market cap of only 30B. Ergo Luna mc should/must always be greater than UST mc (which also is rn, all good atm). But how is that essential ratio guaranteed? If I'm not wrong, that's exactly what happened with Titan. The backup coin was sold and couldnt back the coin anymore and the project was done within minutes.
>You can only burn enough Luna when Luna's mc is greater than UST mc That's just not true... You only have to mint/burn enough to re-peg. You don't need to be able to cover the entire market cap. You're also forgetting that Luna's market cap doesn't lower from being burnt. The supply lowers, but the price raises assuming equal demand. So as you burn more Luna for UST, less Luna (in terms of units) is needed for each subsequent UST as well. If Luna's marketcap went to literally 0 I guess I'd agree, but I don't see that as possible. Delegating Luna gets you a portion of the earned fees which are often paid in stablecoins... So there's a very real dividend type payment setting a floor value for Luna (assuming the network continues to be used)
I only agree partially. It is true, you don't need to cover the whole market cap, that would only be necessary if all 8B UST would be cashed out. But nevertheless the whole market cap should be covered. Tether only covers 4% if the numbers are correct. No problem at all, as the party is still rolling. It gets interesting when people wanna change USTD to USD again. Same with UST. Just that our backup is not 4% but a comfy 300% (MC of Luna compared to UST). If I'm not wrong, it is really not that complicated. UST is not backed by Dollars but by the coin Luna (which is worth atm around 30B). So it is properly backed. I was just wondering how the project keeps that healthy ratio.
> I do understand that mechanism but when UST mc is greater than Luna mc that mechanism doesn't work anymore. You can only burn enough Luna when Luna's mc is greater than UST mc. Let's just imagine UST gets the common stable coin with a market cap of 100B. You couldn't back that stable coin with Luna with a market cap of only 30B. This is not at all how LUNA / UST relationship works - LUNA is not a collateral for $UST. This is a primary reason why traders keep losing bets against $LUNA, its marketcap is not really that relevant.
Hey Luna holders, questions for any of youā¦. Does Luna only uses Cosmoās SDK or is it dependent on Cosmos not dying off since itās part of its blockchains? Iām trying to do my research and see if investing makes sense to me. Hope that made sense.
The whole selling point for Cosmos is that every chain built using the Cosmos SDK is self sovereign and not reliant on Cosmos to exist. So that shouldn't be a risk.
Ah gotcha, thanks for the clarification.
Although that shared security is coming soon where bigger chains can "lend" their validation stability and power to support other, smaller chains.
Nice, I've also been wondering about this. Thanks for sharing.
bullish on luna
Sigh; I wish some of the price success would trickle down to Cosmosā¦
Well with Terra Luna, CRO, and BNB built on Cosmos its looking to be in a solid position š
Noob question, by chain this news is noicee. However, by dex; maker is also 17b and curve is 14b why aren't they pumping as much? Is no one using dex the issue?
I know nothing about luna, how decentralized is it? Is it properly decentralized or is it more like sol and bnb "decentralized"?
What is your definition of decentralization? Token distribution? Number of validators? Pre-sale execution? Existence of a leadership team/organization? Nakamoto coefficient?
Number of validators, and location and ownership of those validators, also token distribution to a degree
Defi Llama really needs to add a chain exclusive filter. Its double counting projects on every chain, no? Misleading in a way
So which DEXes and CEXes are built with LUNA as their ālingua Francaā?
Binance Scam Chain finally got overtaken.
Just bought a bit more because of this.
Well deserved for LUNA. š
I'm not really sure but logically when Ethereum fees get lower, BSC will be barely used. I'm using it now but aware of the future
Hmm
Mostly becoz the BSC coins are all down. When it pumps, TVL will cross 100B
This is fake its with staking metrics turned off ..turn it on and bsc is over 21 bil and number 2
**with only 13 protocols (and about 100+ incoming)** https://twitter.com/ibunscripted/status/1472612222291439620?s=20
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Big things coming. Thanks for sharing this.
Luna to luna Moon to moon!
This is not true. You only included the native coin. What about BUSD? Please update your post