Wall Street responsible for the explosion on the UST stablecoin (LUNA)?

Wall Street responsible for the explosion on the UST stablecoin (LUNA)?

It’s rumored that Wall Street is behind the torpedoes coin stable Algorithmic UST exploded right in flight, currently losing over 40%. Explanation.

what is a coin stable ?

The first coin stable There was tether, which still takes almost 50% market share. The value of a tether (USDT) is one to one face per US dollar.

Traders use stable tires cut its exposure to cryptocurrency volatility. For tether, it can be exchanged for bitcoin, ethereum, EOS, omni, tron, bitcoin cash and solana. Their major advantage is that they eliminate the normal fees and conversion times between cryptocurrencies and fiat currencies.

Unlike bitcoin and its pastiches (altcoins), the value of stable tires … is stable. This stability is made possible by the hourly contribution of the euro, dollar and yen equivalent reserves. coin stable is created. For USDT, each string in circulation corresponds to a dollar in a bank reserve.

Since its launch in July 2014, Tether Limited has always assured its customers that all strings are 100% backed by euro, dollar or yen. However, how the reserves are managed is completely opaque. So the firm conducts periodic audits to prove that the money is there, and that it has not invested who knows where, in the long run or less. It is thought …

In fact, Tether Limited needs these reserves to maintain the 1-1 peg at all times. The firm buys USDT back when the peg falls below $ 1 and sells it when the peg rises above $ 1. Quite simply. Except that these reserves really need to exist and can be used very quickly to avoid any long break in the pin. This would be impossible if some of the reserves were invested over several months. Or worse, if these investments were lost, in which case there would no longer be a 100% hedging hedge.

The IS stable tires Almost all offer the benefits of cryptocurrency (low transaction costs, anonymity) and are used in most cases for traders who use it to unwind their positions. It’s faster, more discreet and cheaper than crediting your bank account. In short, the stable tires used primarily to get out of the market.

The IS stable tires also necessary for traders who operate on exchanges that do not accept payments in fiat currency (the advantage is that disclosure is not required [KYC]).

Finally, also note that the stable tires also sport low transaction fees when converting to fiat currency. In a word, the coin stablethey are a bridge between cryptocurrencies and fiat currencies.

Below, note that, unlike bitcoin, stable tires are not decentralized assets. Selling tether for fiat currency requires vendor identity verification.

We now come to UST (luna), a coin stable of another kind …

algorithmic stablecoin my little lady, yes

Contrary to stable tires backed by equivalent fiat currency reserves, stable tires the algorithms do not fully support the funds they purport to represent.

Algorithmic stablecoin is designed to maintain a peig by “code” instead of good old collateral. UST, behind the terra-luna algorithmic gas factory, is one of them.

Seoul-based company Terraform Labs has developed the “DeFi” terraforma protocol. Its founder, Do Kwon, is not on its first try. Coindesk indeed reports that Korea was one of the unnamed co-founders behind the failure of the coin stable Algorithmic Cash Basis.

Like UST, BAC tried to maintain $ 1 parity by code, not by collateral. But he failed. an coin stable never manage to keep peig and dropped completely at the beginning of last year. Today it’s worth 1 cent instead of a dollar…

Here’s Your Kwon, last week, saying 95% of it shitcoins will eventually be zero. Was he talking to himself shitcoin ? Are we present a inner post »?

Enjoy here Mike Novogratz, CEO of Galaxy, on the occasion of the last Bitcoin conference in Miami, luna promoted by announcing that he has a tattoo on his arm. Marketing of scams there is no limit to it and these scammers are shameless:

By the way, the luna token belongs to the algorithm coin stable UST was supposed to maintain the peig. The algorithm automatically deletes them when UST rises above $ 1, and they are created when UST falls below $ 1.

The number of moons in circulation increased from 400 million units to more than 7 billion in 24 hours. So much so that the luna is only worth three cents a dollar, compared to 80 dollars in normal times…


Charles Hoskinson, one of the co – founders of ethereum, posted an anonymous theory on his twitter feed about what happened over the past few days. The BlackRock and Citadel giant would be responsible for this new shitcoinesque Berezina. Citadel is this famous fund that emerged from the GameStop fiasco thanks to its interpersonal skills with former Fed president Janet Yellen now secretary of the Treasury. Here is the translation:

Blackrock / Citadel borrowed 100,000 BTC from the Gemini exchange, 25,000 of which were discreetly transferred to UST in anticipation of an attack.

At the right time, they asked Do Kwon at Terra Foundation to tell him they wanted to exchange lots of BTC for UST. Given the size of the transaction, BlackRock and Citaddel demanded that the exchange be done over the counter (off – market), so as not to disrupt the market. They asked Do Kwon if he would be willing to buy his 25,000 BTC from them in exchange for UST, with a small discount for the service. Do Kwon took the bait and delivered the USTs to them, which significantly reduced the liquidity of the stablecoin.

At that time, BlackRock and Citadel sold all of these USTs heavily along with the remaining 75,000 BTC, resulting in huge quotation gaps and forced sales cases on both BTC and UST.

Having said that, we need to understand that the real expectation lies that Blackrock / Citadel knew that Anchor was a Ponzi, who had a lot of luna (they offer 20% for “stoking”) , and that their huge sales were enough to encourage withdrawals that Anchor could not cope with (like a good ponzi self – respect…).

As might be expected, these mandatory withdrawals and sales indeed fueled the moon’s massive sales, further weakening the $ 1 UST peg and provoking widespread panic.

Blackrock and Citadel can now redeem the BTC at a low price to repay the loan and put the difference in a pocket. It was pure market manipulation. »

Incidentally, the Anchor ponzi is being precisely offered by the Justt firm the youtuber @powerhasheur which seems to be in turmoil …

This is not the first time, nor the last time, that Wall Street will focus on bitcoin, which is, moreover, a right to blow up the ponzi that is full of them. “DeFi ecosystem “. This is just a ponzi paradise.

Let’s end with Niko Jilch’s good advice:

“Proof of Promise is a scam
Web3 is just a blingbling marketing phrase
Your NFT will end at 0
Your stablecoin is unstable
Your bet is ponzi
Favorite altcoin is a centralized brothel created by a scammer
It’s Bitcoin, not blockchain, or CrYpTo “

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Nicolas Teterel

Journalist reporting on the Bitcoin revolution. My papers deal with bitcoin through geopolitical, economic and libertarian prisms.

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