Source
I have been looking for what makes $LUNA/$UST CRASH,and looking who can explain it to me in a simple terms so I find this thread on my WhatsApp group so I decided to share it and I know someone will understand from this as me also
I think Majorly it will be due to the Peg Mechanism (Algorithmic Stable)
You know $LUNA changed their reserve to $BTC months back to use in Balancing their Peg $UST and all.
BTC dip affected the market Generally and in turn affected their Pegged asset $UST.
Here is the Real Deal
- A Massive $UST selloff on Curve Protocol Days Back
- Led to a massive 40% Withdrawal from Anchor Protocol($80,000,000)💔
Worst Ever
- A Fud was already on Social Media that Led to the sell of.
Now Since $UST is an Algorithmic Stable, it's mechanism of Emission is such that, at Every $UST minted, $Luna is Burnt(Reduced Circulation and in turn favors the Price of $Luna) which is a Very good thing for Luna in a Long Run(FA) but as there was a massive sell off of $UST from Curve Protocol, definitely things will be the other way Round which most persons didn't consider at First.
(Demand and Supply Techonomics)🤌🏻
When $UST is removed from Circulation, $Luna Supply increases💔 (Not a Good thing for the Price of $Luna)
Reason We saw the Crazy dump on $Luna.
Really, the Whole market is just full of sentiments.
We hope -Do Kwon and others in Terraform Labs will be able to do their thing to bring back $UST to Peg
I would have use the Link but can't copy,I hope we learn from Luna mistake,I hope hive use good backups funds for hbd ,I believe hbd will go long way not like the ust
Thanks for reading