1/ It has been a wild week+ in crypto typified the de-pegging of @terra_money's $UST.
Let's read @dunleavy89, @chasedevens, @Saypien_, and @john_tv_locke's 2 cents (or 0.03 $UST) on the drama unfolding on @terra_money. (joke credit @kunalgoel).๐งต
Let's read @dunleavy89, @chasedevens, @Saypien_, and @john_tv_locke's 2 cents (or 0.03 $UST) on the drama unfolding on @terra_money. (joke credit @kunalgoel).๐งต
2/ Last week, @LFG_org purchased an additional 37K $BTC for the $UST reserves from 3AC & @GenesisTrading to bring their total holdings to almost 80K $BTC.
This event was likely the first domino to fall in a series of events that led to $UST de-pegging.
This event was likely the first domino to fall in a series of events that led to $UST de-pegging.
3/ Saturday marked the start of the $UST de-pegging cascade.
@binance experienced a slight 25 bps depeg May 7, likely due to 3AC and @GenesisTrading unloading their @UST from the @LFG_org $BTC purchases.
@binance experienced a slight 25 bps depeg May 7, likely due to 3AC and @GenesisTrading unloading their @UST from the @LFG_org $BTC purchases.
4/ With a supply outflow this large, pressure would be put on critical peg stabilization junctures like @CurveFinance.
Around the same time, the C was also pulling funds for liquidity for the 4pool.
Around the same time, the C was also pulling funds for liquidity for the 4pool.
5/ Amidst a broader market selloff, the large & sudden $UST supply introduction created reflexive sell pressure on $LUNA which culminated in the de-pegging event.
Large amounts of capital were deployed at $0.98 to protect the peg, but reflexive selling accelerated.
Large amounts of capital were deployed at $0.98 to protect the peg, but reflexive selling accelerated.
6/ On Saturday, @CurveFinance's key pools started to diverge from equilibrium suggesting traders were selling $UST & LPs were pulling at-risk capitaI.
The trend accelerated on Monday, when the $UST-3pool was almost entirely drained of counter-side liquidity with $UST at +95%.
The trend accelerated on Monday, when the $UST-3pool was almost entirely drained of counter-side liquidity with $UST at +95%.
7/ @LFG_org, the organization created to defend the peg, mobilized its reserves during this episode.
All of the roughly 80,000 $BTC were sold & or loaned out to market makers to provide $UST liquidity at key levels.
All of the roughly 80,000 $BTC were sold & or loaned out to market makers to provide $UST liquidity at key levels.
8/ Are we out of the woods yet?
See what @dunleavy89, @chasedevens, @Saypien_, and @john_tv_locke have to say about @terra_money's $UST in the full Pro Report.
messari.io
See what @dunleavy89, @chasedevens, @Saypien_, and @john_tv_locke have to say about @terra_money's $UST in the full Pro Report.
messari.io
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