Conversation

Do Kwon 🌕
@stablekwon
.
@bytemaster7
I know you're job searching rn, so just letting you know we have internship positions open at Terraform Labs. All jokes aside, happy to answer
@terra_money
's stability mechanism on this thread. Long live the king of algo stablecoins 🌕
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Jsmitty1123 🌘
@Jsmitty1123
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@d0h0k1 it seems that Dan Larimer has concerns about “when” UST starts falling it will “eventually” lead to a hyper inflationary collapse of $LUNA. It seems he doesn’t believe the Terra Ecosystem is sustainable. Do you have a response to the $EOS mastermind?
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Do Kwon 🌕
@stablekwon
3/ Just from the above supply dynamics, it can seem that Luna mirrors the cyclicality of Terra's economy. But the protocol has a second stability lever: calibrating fees.
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Do Kwon 🌕
@stablekwon
4/ The Terra protocol charges a % fee for on-chain transactions. - For Terra<>Luna swap transactions, a 0.5%~ fee is charged - For Terra transactions, a 0.1~1% fee is charged And are paid as block rewards pro-rata to Luna stakers
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Do Kwon 🌕
@stablekwon
5/ These fees are adjusted to counter Luna's supply dynamics through changes in market conditions: - Swap fees increase with volume increase in swaps from Terra to Luna - Transaction fees increase quickly as Luna supply increases
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Do Kwon 🌕
@stablekwon
6/ In some sense, even if Luna's supply increase, the system increases cashflows to unit staked Luna to make the asset more valuable Luna's economics are designed to be countercyclical to macroeconomic changes in the Terra economy
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Do Kwon 🌕
@stablekwon
8/ ... and each new exciting app to launch on the system further diversifies cashflow streams and the robustness of the overall economy.
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Do Kwon 🌕
@stablekwon
9/ It is also important to stress that
@terra_money
is the first and the largest algorithmic stablecoin to reach $1B market cap - and has exhibited extreme resilience through many market cycles over the last 2 years.
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Do Kwon 🌕
@stablekwon
10/ The longer
@terra_money
exhibits stability, the stronger the market's conviction grows in the viability of a decentralized medium of exchange & SoV answer to Tether. imo, it is one of the most important projects to be working on in crypto today.
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