Did Someone Deliberately Attack Terra/Luna to Kick off a Death Spiral? - Ep.351

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
 
Thank you to our sponsors!
Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021     
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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 ​​https://unchainedpodcast.com/do-kwon-is-backing-ust-with-bitcoin-and-heres-what-else-he-is-building/

Kevin Zhou on the risk of UST’s death spiral
https://unchainedpodcast.com/heres-why-usdn-de-pegged-from-the-dollar-and-why-ust-might-too/ 

 
Terra:
Terra proposal to accelerate the burn of UST and increase the base pool: https://station.terra.money/proposal/1164  https://www.theblockcrypto.com/post/146254/terraform-labs-ceo-do-kwon-unveils-plan-to-restore-ust-peg

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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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

 

Thank you to our sponsors!

Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021     

Coinchange: https://coinchange.io   

 

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 ​​https://unchainedpodcast.com/do-kwon-is-backing-ust-with-bitcoin-and-heres-what-else-he-is-building/
Kevin Zhou on the risk of UST’s death spiral
https://unchainedpodcast.com/heres-why-usdn-de-pegged-from-the-dollar-and-why-ust-might-too/ 

 

Terra:

Terra proposal to accelerate the burn of UST and increase the base pool: https://station.terra.money/proposal/1164  https://www.theblockcrypto.com/post/146254/terraform-labs-ceo-do-kwon-unveils-plan-to-restore-ust-peg 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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