![]() ![]() The minting of LUNA tokens cannot be stopped because they are freely interchangeable with UST. There are the painfully obvious political bait posts. I suppose this could also be an extremely lazy copy paste, but the point is the same. There are the badly coded bots, like this bot which apparently failed to pull the price numbers, rendering the message hard to even understand at first. Just like we see with other shill campaigns ( cough cough popcorn subreddit was created on 1/27/21 cough), there are attempts to co-opt ape style language and emojis all over. This page is the first result on google for these coins, and so would likely be targeted by shills if a shill campaign were in progress. In this case, I'm looking through the coinmarketcap comments sections for UST and LUNA. So, if this were some sort of intentional plot to create bagholders by selling death spirals directly to retail, surely there would be shills, right? I am actually shocked with how close this parallel is, to the point that I can't believe this is an accident. Only this time, it's crypto investors buying the death spiral instead of failing companies. This is the exact mechanic that makes death spiral convertible bonds so dangerous. And, as if all that wasn't bad enough, whoever engineered the crash was also likely short selling into it before and during. A week ago, there were about 350M LUNA, by the end there were over 6.5T(!!!) a 20,000x dilution. This then leads to runaway inflation of LUNA. To make matters worse, UST is essentially collateralized by LUNA, so as the value of LUNA crashes, it becomes harder and harder for UST to get back up to its peg and break the cycle. Rinse and repeat, but now LUNA's price is lower so you get more. Then you sell the LUNA on the open market, driving the price down. So, if UST were to fall below its peg, you would be able to buy UST and immediately burn it for more value in LUNA than you just paid for it. You see where this is going?Ī death spiral convertible security is similar to a normal convertible security, with one key difference: instead of getting X number of shares, I get X dollars paid in shares. The way that UST maintains its value is that, at any time, you can burn $1 worth of LUNA for 1 UST, or you can burn 1 UST for $1 worth of LUNA. In the case of UST, the corresponding token is LUNA. ![]() UST is a third type, an algorithmic stablecoin ("algostable"), which are designed to maintain their value through some other means, often through a relationship with another token. Others, like USDT, Tether, are "fully collateralized" with what is definitely totally not Evergrande bonds, but that's another story. Some of them, like USDC, are fully collateralized, meaning that for every coin in circulation, the issuer has $1 of hard collateral reserve and thus the value of the coin is closely tied to the value of the assets. ![]() Different stablecoins use different mechanisms to counteract this. Since cryptocurrencies are traded on the open market, there would be all kinds of natural pressures that would slowly shift it off peg. Some of them track the price of gold ("being pegged to gold"), some of them track various foreign currencies, but a lot of them track the good old USD. Stablecoins are a type of cryptocurrency that are designed to always stay the same value. The TL DR of that post is that UST has unpegged multiple times before on significant dates for GME, including apparently participating in the sneeze. I'd also recommend taking a look at my post from the other day about UST and its potential correlation to GME. If you haven't, I would strongly recommend reading it but you don't need to in order to understand this post. Many of you will have seen u/MovieUnderTheSurface's DD from last month on death spiral convertible bonds. TL DR: The algorithms that work to maintain the value of algorithmic stablecoins like UST also function as death spiral convertible bonds. The most effective route to BUY, HODL and OWN GameStop SharesĬould broker diversification be the catalyst? Or is it just a good idea?ĭiscord Daily Thread DRS Guide AMAs DD Library Hide CS Posts The GME Masters' Guide: A DD Campaign for Apes Levels 1-20 Looking to catch up on the GME Saga? Start here!Įverything Superstonk Knows About Naked Shorting - A Definitive Guide Visit /r/VeryGMErryHolidays for info on Superstonks annual Toys for Tots charity event! New here? Start with these: The Superstonk Library aka gme.fyi Comment !apeprove! anywhere on the sub to be added to the list of pending approvals. ![]()
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