![]() ![]() (And it's not clear as of now that there's any way to save UST's peg even if you sacrifice LUNA.)," said Bankman-Fried, who has previously helped rescue a different project (SushiSwap).īinance's Zhao, one of the most influential figures in the crypto industry, said he was "very disappointed" with how the incident has been handled by the Terra team. Asked for his thoughts, Sam Bankman-Fried, co-founder of exchange FTX and investment and market making firm Alameda Research, said on Thursday that "the real, honest answer is that, probably, either UST or LUNA have to go to 0 (or both). Terraform Labs has been scrambling to find ways - including reportedly trying to raise money - to resolve the situation, but so far it has had no luck. ![]() These influencers are setting our industry back The plan is that if the value of TerraUSD tumbles below $1, it could be "burned" and exchanged for a dollar's worth of Luna, and vice versa.Ī few months ago publicly ridiculed ETH and started relentlessly shilling LUNA. TerraUSD, a so-called algorithmic stablecoin, aims to be a substitute for the dollar by intertwining with Luna, which has no fixed value. Due to these significant risks, we suspended trading," he said. "Some of our users, unaware of the large amounts of newly minted LUNA outside the exchange, started to buy LUNA again, without understanding that as soon as deposits are allowed, the price will likely crash further. Their validators have suspended their entire network, resulting in no deposits or withdrawals possible to or from any exchange," said Changpeng Zhao, founder and chief executive of Binance, in a Twitter thread. "An exponential amount of new LUNA were minted due to flaws in the design of the Terra protocol. Earlier on Thursday, Terraform Labs briefly halted the network to prevent any hacks. If UST falls below its dollar peg, it’s possible to acquire the discounted stablecoin and subsequently swap (and destroy) it for $1 in LUNA.Īn investor can earn handsomely while also eliminating UST from circulation and increasing demand for stablecoin.In the meantime, Terraform Labs said it is halting the Terra blockchain and is working to "come up with a plan to reconstitute it." It's the second time the Terra blockchain has been frozen this week. When LUNA is exchanged for UST, however, that LUNA is destroyed.įor astute investors, this presents an appealing arbitrage opportunity. The UST transferred for LUNA is destroyed and removed from circulation each time this swap is done. One UST may always be exchanged for one LUNA and vice versa. On the other side, some community members defended the decision, claiming that Binance CEO Changpeng “CZ” Zhao saved many investors from liquidation by selling a stablecoin for $0.70. The community has reiterated the term “not your keys, not your coins” since clients worldwide cannot withdraw their assets and cited the suspension of Binance’s funds as one of the fundamental disadvantages of a centralized crypto exchange. Users and community members’ reactions to this suspension The Terra stable coins price is maintained by LUNA, which decreases market volatility and keeps the price stable. Luna (LUNA) and TerraUSD (UST), the Terra network’s native currencies, are two blockchain-based initiatives created by Terra Labs in South Korea. ![]() Withdrawals were paused “due to a large level of pending withdrawal transactions,” with the business promising to resume them once “the network is stable, and the volume of pending withdrawals” has decreased. The withdrawal of Terra’s LUNA and UST tokens has been “temporarily suspended,” according to Binance’s official website. As the crypto community continues to figure out Terra’s ongoing pegging-de-pegging dilemma about its stablecoin offering TerraUSD, Binance momentarily restricted withdrawals for LUNA and UST on Tuesday regarding its stablecoin offering TerraUSD (UST). ![]()
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