Did Someone Deliberately Attack Terra/Luna to Kick off a Death Spiral?

Jon Wu, head of growth at Aztec Network, recaps a historically chaotic week in the Terra ecosystem that saw $UST depeg, Anchor depositors flee, and $LUNA fall 99%. Show highlights:

• how $UST, $LUNA, Luna Foundation Guard (LFG), and Anchor Protocol are supposed to work
• why Jon compares the Terra blockchain with VISA, LFG with the Fed, and Do Kwon with Jerome Powell
• how a previous $UST de-peg foreshadowed this week’s dystopian price action
• how a bitcoin short seemed to have kickstarted $UST’s depeg and why Jon thinks it was a deliberate attack
• why Luna Foundation Guard originally purchased Bitcoin – and how that plan backfired and made the Terra death spiral even more violent
• why $UST had such low liquidity this week – making it more susceptible to a bank run
• what Jon’s predictions are for $UST and $LUNA going forward
• what were the reasons behind Terra halting
• why Jon does not think this will be the end of algorithmic stablecoins
• why Jon thinks this should not affect ETH directly, even though there is a high amount of staked ETH in the Terra ecosystem

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Episode Links

Jon Wu

Jon’s Write-Up on the UST Depeg

Previous Unchained Coverage of Terra

• Do Kwon on backing UST with BTC
• Kevin Zhou on the risk of UST’s death spiral

Terra:

Other Recaps on Terra: