How can ust and Luna save themselves from Terra's defeat and current situation?

When the flowing music stops , Everything gets complicated .14 Years ago , The veteran financial cannon Madoff is 2008 Under the financial crisis in, the original appearance was revealed , Because of his careful planning to maintain 20 The Ponzi scheme collapsed in and went to jail . Now , The time when water is big and fish is big is over , The tightening of liquidity has also made the algorithm stability currency carefully constructed in the encryption market undergo a huge stress test ,UST Completely defeated .

stay Cryptocurrency In the market value ranking of ,Terra In ecology LUNA and UST Once ranked in the top 10 at the same time . However , stay 5 month 9 Japan ～5 month 11 Within three days , because UST The anchor is off ,LUNA And UST 300 The market value of US $billion has evaporated directly , And indirectly brought down the whole cryptocurrency market .

Luna The foundation （Luna Foundation Guard,LFG） And its market makers have ended up rescuing the market many times , however “ Confidence is more important than gold ”, This sentence is especially true in algorithmic stability currency , When faith is torn apart , Even stitching is full of holes .

Terra The market rescue strategy resumed

First of all, we will review the breakout event and LFG Market rescue strategy .

1、5 month 8 It will arrive in the early morning of the 21st 5 month 8 During the evening of the th ,Terra Removed Curve Liquidity in the market , To prepare to include UST、FRAX、USDT、USDC Of 4pool, here 8400 ten thousand UST Smash at Curve.UST Two small disengagements 1 dollar , after “0x6b67” The address at the beginning 7 over ETH（5 10000 pieces for exchange USDT And buy UST, in addition 2 over ETH Sent to the Currency security ） and “0x5996” The first two addresses （ accumulated 5.8 Million pieces UST） Efforts ,UST recovery 1 dollar .

2、5 month 9 On Tuesday night ～5 month 10 During the day ,UST Slightly below 1 There are huge transactions in the US dollar , The coin installation also started “UST Defense war ”, But eventually the war failed ,UST At the very lowest 0.6 Near the dollar . Some people have asserted that Terra Towards failure . Money security pause UST Filling and withdrawal of ,Terra Chain operation Caton ,UST It is difficult to destroy on the chain for redemption LUNA.

3、5 month 11 Day in the morning ,The Block Reports said LFG Is seeking to raise more than 10 Billion dollars to support UST,Jump Trading、Celsius as well as Jane Street Has promised the sum of financing , Organization to 50% For the price of LUNA, Lock up for one year , Then release linearly on a monthly basis . Then came the news of financing failure , because LUNA Falling too fast ,LFG The discount price given is no longer meaningful . But after , Welcome to LUNA and UST The is a further decline ,LUNA Precede UST trend 1 dollar , before LUNA The highest price is more than 100 dollar .

4、5 month 11 On the afternoon of Sunday ,Terra Research Announced a proposal , take UST The coinage capacity of （ The upper limit of theoretical coinage within a specific slip point in a day , The competition between traders and arbitragers leads to the actual destruction of UST May be higher than this value ） from 2.93 Billion dollars to 12 Billion dollars , To speed up UST Deflation in Europe . Subsequent programs tend to sacrifice LUNA save UST,LUNA Accelerated decline .

5、5 month 12 Japan ,Terra Official name 1164 Proposal No. 1 will expand the size of the foundation pool and speed up UST The burning rate of , Help narrow the price difference on the chain .TFL Launch three urgent actions ： Destroy... In the community pool UST; stay The etheric fang Destroy the remaining... Across the chain 3.71 Billion UST; pledge 2.4 Billion LUNA To defend against network governance attacks .

Reflection on failure

UST and LUNA Towards failure , The fundamental reason may have been laid down from the moment this mechanism was born , In the near future Terra The rapid development of has accelerated this process . stay UST The circulation is only 180 In the case of billion , among 140 Billion exists Anchor in , Once a lot of money comes from Anchor Withdrawal will result in a run .

If Terra Retrieve liquidity and Curve 4pool The deployment process is continuous , Then this tragedy probably won't happen .Frax+3Crv The pool has more than 20 Billion dollars of liquidity , stay CRV In the case of incentive transfer ,Frax and UST The cooperation may retain most of the liquidity of both sides ,8500 The $million sell-off is not a concern .

If there is still a chance to save when the anchor breaks down , But the official's overconfident operation led to missed opportunities .

First , stay UST In the case of a small loss of anchor ,Do Kwon High profile announcement “ The rescue ”, And waste a lot of money , Lead to “ The bullet ” Light up in advance .

UST Further anchor release ,LFG No real progress , Only financing can be considered . In financing ,LFG The chips given are LUNA, It needs to LUNA Maintain a high price . In the case of exchange charging delay and chain operation jam , The destruction UST Casting LUNA The poor arbitrage process prevented LUNA A further fall in prices , Create conditions for financing , But these are only temporary , Financing eventually failed .

And then ,Terra Official measures have chosen to support faster combustion UST Additional issue LUNA. But I've missed the best time ,LUNA Prices have fallen , Destroy the same amount of UST Need to issue more LUNA, At the same time, the liquidity is insufficient , Final LUNA Towards the death spiral , Market value fell to 100 Name away .

LUNA And UST present situation

according to Smart Stake Provided Terra Analytics data , stay 5 month 8 Before the day ,LUNA The total amount of has been reduced for a long time , and UST The total amount of continues to increase . At the time , Users prefer to destroy LUNA To cast new UST.

But then things changed , By 5 month 12 On the afternoon of Sunday 6 spot ,5 month 8 Japan ～5 month 12 During the day ,LUNA The total amount of increased 92.5 ten thousand 、277.5 ten thousand 、4923.9 ten thousand 、18.2 Billion 、53.9 Billion .

At the same time ,UST The total amount of is reduced 5923.4 ten thousand 、1.35 Billion 、12.1 Billion 、41.4 Billion 、9.6 Billion .

as time goes on ,LUNA The price of is gradually going down ,Terra Our actions are becoming more and more weak . With 5 month 12 Day, for example , As of the afternoon 6 Points have been issued additional 53.9 Billion LUNA, The amount of additional issuance is that of the previous day 5.6 times ; But only destroyed 9.6 Billion LUNA, Less than the previous day 76.8%.UST The price of 0.41 Near the dollar , and LUNA The price fell to 0.026 dollar . here ,UST The supply is 122.7 Billion ,LUNA The total supply of 79.8 Billion .

LUNA The market value of is gradually going to zero , and UST The supply of is still high , The reserves are almost completely depleted .

LUNA and UST It is impossible to restore the original cohesion . Even if UST Back to 1 dollar , During this period, a large number of LUNA,LUNA It is difficult for prices to rise . More users destroy UST Casting LUNA, Resell LUNA To get back part of the principal , The destruction LUNA Demand has fallen to freezing point .

How to save yourself next ？

Now? UST and LUNA Faced with a dilemma , Selective rescue UST, It's about reducing UST Supply of , Which means burning UST Add a lot of extra LUNA Supply , May lead to LUNA Zeroing . if LUNA Prices fell faster , The market value has fallen , It reduces people's awareness of UST The confidence of the .

If you choose to save LUNA, It means giving up UST, that LUNA And lost the meaning of being . and LUNA After a large number of additional issues , It is impossible to return to the original price .

In this case , Can save UST and LUNA The chances are slim . however Do Kwon Still not giving up , Communities have also given their own ideas about saving UST/LUNA Ideas .

for example ,The Block Vice president of research Larry Cermak Think , Currently let UST The holder withdraws from the liquidity issuance LUNA There is an unlimited amount of bad debts in our scheme ,LUNA The decline will lead to the depletion of liquidity . We should give up for the time being UST, Turn to use USDT/USDC, Focus on Layer1 ecology , Pay back later UST Bad debt .Terra There are a lot of ecological construction on the chain , take LUNA As Public chain The original token of is a scheme , but Larry Cermak It is also recognized that the chance of success of such a scheme may be close to zero .

founder Do Kwon The current plan also tends to protect UST,Terra The development of is inseparable from the Korean people using the algorithm to stabilize the currency offline ,Terra It is also advertised as an algorithmic stable currency item . I personally agree UST Than LUNA Is of great significance , Reference, etc Maker DAO And other stable currency items , When the agreement becomes insolvent , Additional issuance is also needed government Token to maintain the value of stable currency . Here are some personal suggestions for maintenance UST Ideas .

1、 Further encourage users to destroy UST Additional issue LUNA. stay UST When the circulation is still high , It's too difficult to recover , We need to reduce UST The circulation of , Reduce the size of debt . Can reduce the UST To LUNA The exchange fee for , increase LUNA To UST The exchange fee for , avoid LUNA To UST Arbitrage activities .

2、 Give a certain time to continue to let users exit at a discount , In fact, UST After the thunder , because Predicting machine Price and expenses , The destruction 1 UST I will not get 1 The dollar LUNA. Continue this process , Let users exit at a discount , Save bullets , Leave users who believe in the agreement .

3、 Reformulate the financing strategy , Consider launching a proposal to Terra Part of the agreement is to exchange income distribution rights for financial support . according to Larry Cermak Ideas ,Terra Of Layer1 It's also valuable . The reason for the failure of the previous financing may be that the institution cannot confirm LUNA How the price and quantity of , Additional issue LUNA The more , The lower the value , In exchange for the rights and interests of income distribution, it is equivalent to locking Terra Percentage of equity , Reduce the risk of institutional involvement .

4、 If there is financial support , In the case of limited debt , Users can exchange part of the value at a discount , For example, allow users to 1 UST exchange 0.6 dollar , Then increase the exchange ratio . This is done in Fei Protocol Has also been practiced in .

5、 Cooperate with the good news , Buy LUNA, Give Way LUNA The market value of is close to UST.

Taken together , Various schemes can save UST and LUNA Are less likely ,UST and LUNA The disconnect will also affect investor confidence . Even if this fluke makes UST Restore to 1 dollar , The follow-up also needs to be changed as soon as possible Terra The design of the , For example, increase reserves 、 Limit UST The scale of .

UST The failure of does not mean the failure of the encryption market and The algorithm stabilizes the currency The failure of the , Any innovation comes at a price before it reaches maturity , Although the price is too painful .UST Today is undoubtedly a wake-up call for all encryption Entrepreneurs , While innovating , Remember to fear risk , Considering the extreme environment and black swan , Because you never know what will come next .