Jon Wu, head of growth at Aztec Network, recaps a historically chaotic week in the Terra ecosystem that saw $UST depeg, Anchor depositors flee, and $LUNA fall 99%. Show highlights:
- how $UST, $LUNA, Luna Foundation Guard (LFG), and Anchor Protocol are supposed to work
- why Jon compares the Terra blockchain with VISA, LFG with the Fed, and Do Kwon with Jerome Powell
- how a previous $UST de-peg foreshadowed this week’s dystopian price action
- how a bitcoin short seemed to have kickstarted $UST’s depeg and why Jon thinks it was a deliberate attack
- why Luna Foundation Guard originally purchased Bitcoin – and how that plan backfired and made the Terra death spiral even more violent
- why $UST had such low liquidity this week – making it more susceptible to a bank run
- what Jon’s predictions are for $UST and $LUNA going forward
- what were the reasons behind Terra halting
- why Jon does not think this will be the end of algorithmic stablecoins
- why Jon thinks this should not affect ETH directly, even though there is a high amount of staked ETH in the Terra ecosystem
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Episode Links
Jon Wu
- Twitter
- https://twitter.com/jonwu_
Jon’s Write-Up on the UST Depeg
- Article: https://www.notboring.co/p/terra-to-the-moon-and-back
- Thread: https://twitter.com/jonwu_/status/1523793482850050048?s=20&t=lvB1zdz98wu5TE5emh4fCw
Previous Unchained Coverage of Terra
- Do Kwon on backing UST with BTC
- Kevin Zhou on the risk of UST’s death spiral
Terra:
- Terra proposal to accelerate the burn of UST and increase the base pool: https://station.terra.money/proposal/1164
- Terra halting the network: https://twitter.com/terra_money/status/1524785058296778752?s=20&t=FUJkFuN8PyxRoF9TCPgrGg
- Terra going live again: https://twitter.com/terra_money/status/1524812171179327488?s=20&t=FUJkFuN8PyxRoF9TCPgrGg
- Regulatory risks: https://www.theblockcrypto.com/post/146426/the-sec-has-already-sued-terraform-labs-it-has-every-reason-to-investigate-ust-lawyers-say
Other Recaps on Terra:
- CoinDesk on how Do Kwon was behind previous algorithmic stablecoin: https://www.coindesk.com/tech/2022/05/11/usts-do-kwon-was-behind-earlier-failed-stablecoin-ex-terra-colleagues-say/
- Rekt: https://rekt.news/luna-rekt/
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- Source: https://unchainedpodcast.com/did-someone-deliberately-attack-terra-luna-to-kick-off-a-death-spiral/
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