We understand the nature of the crypto market and realize that from malicious attacks or simple greed, these things can happen. While the Terra protocol was one of the ones utilized by Coinchange, we are investors just as much as each one of our users. So that is a summary of what happened to the Terra Network ecosystem, and why it collapsed in on itself. What This Unfortunate Series of Events Lead To: The market already being weak from the previous month, failed to have the intended benefit and one could argue that this large bitcoin sell-off by LFG might have also contributed to having those measures being even less effective With both UST and Luna plummeting in price, and UST struggling to rise to its 1$ peg, the Luna Foundation Guard loaned and sold BTC in order to try and rebalance the pools and increase the UST price value.UST was being burned and LUNA got minted and then sold for USD and stablecoin, which ultimately put downward pressure on LUNA, which has now plummeted down to a fraction of a penny Due to the attempted arbitrage of UST being below its 1$ peg, the value of Luna decreased rapidly as a result of the on-chain swap mechanism.As prices tumbled for UST, investors attempted to take advantage of the arbitrage by selling UST at a value of 90 cents to 1$ worth of Luna.Regardless of the reason, that much being sold at once drove UST prices down which only cemented its de-pegging.Whether a result of market panic over the volatile nature of the market currently or even a malicious attack on Terra’s system is still an unanswered question, but one of these two things likely occurred.On May 7th, over $2 billion dollars worth of UST was taken out of the Anchor Protocol (a savings, lending, and borrowing platform) that was built upon the Terra blockchain, along with hundreds of millions of UST that were sold right away. So let’s take a look at what happened to UST exactly:
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