Luna, UST, and Anchor have just realized their nightmare. Because of a series of large liquidations and panic, the stablecoin UST has been sold so much that is has lost its pegged value. Luna, the native token of Terra, is meant to back the value of the UST stablecoin but has also lost its value due to panic from the failure of the system.
The insider information in the twitter post above from Charles Hoskinson, founder of Cardano, implies that this crash was caused by intentional market manipulation. Either way, this shows how early these systems are in their development, specifically DeFi and yield platforms. I have warned everyone who I consult with that I would not put significant amounts of money into any of these yield offerings like Anchor which is artificially maintaining a high APY. The crash of UST was more of a surprise to me but makes sense when you consider that an algorithmic stablecoin is still a proof of concept in my opinion. Also interesting that Terra has been the highest token on Weiss Rating with a “D” score. I assume this is from a lack of adoption and security in the platform.
Moving forward, if I had a lot of UST right now I would wait out this storm. There are bigger players and executives who need UST to recover more than you do. There have been a few plans proposed from Terra Luna Foundation Guard and Anchor Protocol to resolve the backing of UST. I believe they can borrow money and forge a solution but I could be wrong.
The crypto world is a wild west and you got to watch where you step. Of course I know all of you are only investing what you can afford to lose lol.
*Updated Friday, May 13*
Here is the most recent proposal from Do Kwon, LUNA founder, for resolving the collapse of UST.
USDC overtaking USDT (Tether) in circulating supply. This competition is good. It establishes legitimacy of demand and allows us to not be dependent on any single system. Soon the United States digital dollar will be on this list.
Its hilarious to look at the angle on this chart. NFTs are surely the story of 2021. This is the growth people expect when they come to cryptos, but I bet most of you missed these gains in one way or another. Maybe you were busy right click saving lol. You got to stay plugged in and keep your awareness up.
I have seen a lot of FUD (fear, uncertainty, doubt) on Cardano recently. People are disappointed that this top 5 layer 1 coin has not made them rich. Cardano has been quietly developing faster than any other top layer 1 which bodes well in this time of inefficiency and crude architectures.
Interesting article criticizing the inefficiency of cryptos, specifically BTC and ETH. These are legitimate concerns that will prevent these systems from reaching the goals we have. I believe that we are very early in this industry and these problems are being solved. If you can’t handle the FUD (Fear, Uncertainty, Doubt), then you don’t deserve the gains.
Ethereum Name System has been slept on for long enough. This is an alternative to traditional Domain Name Servers like Google DNS or GoDaddy where you can register a website name like twitter.com. The difference between a .eth and a .com is the level of ownership and connectivity. ETH domains are connected to crypto wallets, NFTs, and your digital identity online. They are highly programable and I believe they will be a necessity for any person or company in a crypto future.
Here is an extensive comparison of the Layer 1 Networks published by The Block Research and funded by Algorand. This report is a deep dive into the competition of Layer 1 network, the problems that the leader Ethereum is facing, and how other networks are addressing these problems.