The bottom fell out from one of crypto’s fastest growing blockchains, LUNA, which promised to succeed where bitcoin failed. Its predictable collapse reverberated across the entire crypto market and is forcing investors to pick up the pieces.rypto’s history has been defined by five resets. The first came in 2014 when what was basically the only bitcoin exchange in the world, Mt. Gox, imploded following a nearly half-billion-dollar hack.
Severe bear market crashes in the nascent market for cryptocurrencies have become almost commonplace. Consider that in the last century the U.S. stock market has only experienced five bear markets in which stocks declined more than 30%. Bitcoin is only 12 years old and the cryptocurrency market has had as many severe crashes.
The South Korea-based Terra Foundation sought to solve this by using an algorithm to replace many of the techniques that give the U.S. dollar its stability. When price goes down, it creates an arbitrage opportunity to trade a UST token worth less than a dollar for $1 worth of LUNA. Theoretically. The LUNA blockchain also hosted a DeFi lending protocol, called Anchor, which paid depositors 20% yields.
At least Zhu did not get a LUNA tattoo on his arm like Galaxy Digital founder Mike Novogratz, another big backer. There is no word yet on what he plans to do with the ink. Perhaps the most disappointed competitor was Dante Disparte, the chief strategy officer at Circle, who claimed that LUNA’s downfall reflected poorly on the entire stablecoin industry, referring to the UST as a “stable-in-name-only” token. He claimed that Terra founder Do Kwon’s use of more than $3 billion in crypto collateral exposed the project as a centralized entity operating under a decentralized flag.
The good news here is that most investors don’t seem to be panicking, which should act as a shock absorber for the market. Ironically, that may be due to the fact that investors were already taking money off the table when LUNA and Terra crashed. The industry had “some de-risking in the crypto space even before Terra’s collapse,” says Nikolaos Panigirtzoglou, JPMorgan Chase’s managing director of global markets strategy.
And 'I have a bridge to sell you for $1 trillion' compadre hahahahahaha
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Source: Forbes - 🏆 394. / 53 Read more »
Source: Forbes - 🏆 394. / 53 Read more »