Conversation

Feb 4, 2021

1/ Important

announcement - the economics for minting Terra stablecoins will change significantly on 2021.02.08 18:28:48 (GMT+9), next Tuesday: here's what you can do to stay prepared. 🧵👇

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Do Kwon

@stablekwon

Feb 4, 2021

2/ TL;DR - Starting next week: - UST supply will increase and - Luna supply will decrease. This thread explains how you can both help the ecosystem and profit ($$$) at the same time.

Do Kwon

@stablekwon

Feb 4, 2021

3/ Problem: There is currently a major shortage of TerraUSD (UST).

@mirror_protocol

grew the market cap of UST from 0 to nearly 300 million in 7 weeks, depleting TFL's stablecoin reserves. While insane growth is awesome, it's forcing UST to trade at a 5% premium - not great.

Do Kwon

@stablekwon

Feb 4, 2021

4/ So why can't we simply print more UST? Minting 1 UST requires burning $1 worth of $LUNA, and to prevent consensus attacks, the protocol levies a "minting cost" which puts a theoretical ceiling on new supply of UST daily. Today, 400k $UST / day.

Do Kwon

@stablekwon

Feb 4, 2021

5/ To solve the supply crisis,

@jumptrading

initiated Prop 27 to make minting of UST 20x more efficient than before - agora.terra.money/t/terra-on-cha With prop 27 in place, $10M UST / day minting is now possible.

agora.terra.money

Commonwealth

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Do Kwon

@stablekwon

6/ This means starting next week, whenever you see UST trading at $1 + a, you can buy and burn $Luna to mint UST, and sell it to **capture risk free profit** - as long as your slippage in buying $Luna is lower than a And what are the odds of such slippage for a $2B FDV asset

12:38 PM · Feb 4, 2021Twitter Web App

Replying to

7/ Looking at current demand, we are expecting that arround 200M $UST will need to be created in February. This will require a 100M $Luna burn at current prices - around 11% of the total supply. Prepare accordingly.