Do Kwon 🌕 on Twitter: "@DaFreed123 @aklamun Dere's a lot going on https://t.co/5ZI2rTuaFv" / Twitter

The Terra UST stablecoin could collapse in a bank run effect. UST is backed by an endogenous collateral Luna. Current Luna marketcap has fallen to arguably < outstanding UST. We are now in a dangerous spiral: as users panic out of UST, this reinforces the Luna crash further.

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Do Kwon

@stablekwon

May 24, 2021

$UST is not explicitly backed by $LUNA - the system allows swaps between the two assets to achieve stability. As long as $LUNA has non-zero market value, the system can offer arb incentives to bring prices to the peg.

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Replying to

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Dere's a lot going on

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ALT

9:31 AM · May 24, 2021Twitter Web App

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Do that was a fantastic ama. I wanted to apologise for some nasty tweets I sent last week - wasn't personal just got rekt (fault my own)- will slowly rebuild now and have full faith in Luna long term. When people got hit like us - compassion is important.

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