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The reason for establishing this reserve could be thought of as a good idea because stability is often psychological and self-reinforcing. If people are worried about the UST peg, it is harder to maintain it because in turbulent times people will try to ”escape to safety”.

Things that are perceived as having the strongest peg also see much less stress testing of their peg. That’s why a 3B safety net can yield much more than 3B in cost savings, because of the psychological impact that leads to way less stress tests in perpetuity.

But, using these kind of one-off solutions to build a reserve is a huge miss because it still undermines the belief in the system’s sustainability if you leverage ICO funds to build it. It inspires much greater confidence if you sustainably built a reserve from protocol fees.

TL;DR

is centralized and funded by ICO money which is inherently unsustainable, violating the two most important tenets of a decentralized algostable.

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I didn’t see

clarifying anywhere that the reserve was built using ICO money, and he gets super defensive if you want to write a thread about where the money came from that’s longer than a tweet.

Quote Tweet

· Mar 28

Replying to @ercwl and @adam3us

Did you replace my explanation with a literal stream of consciousness and call it better? Useless iwo

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Hey Eric, couple of clarifications: First, the reserve is not funded through an initial coin offering, unless you mean the luna we are holding is an “ICO” Terra only raised 32M or so from funds before network launch, and don’t think this money made a meaningful contribution

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Second, I am not sure you know where the right places to look for content in the Terra community, but tweet replies to adam beck is not usually where you can get the best information - hope you agree. Thesse are better flipsidecrypto.xyz/terra/lfg flipsidecrypto.xyz/terra/lfg-netw

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Discuss, organize, and grow decentralized communities

Third, while the reserve is bootstrapped from our donation, bitcoin will be purchased through ongoing usage of Terra seigniorage - the notes for this is in Terra’s main research forum, agora:

agora.terra.money

Commonwealth

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11:45 PM · Mar 28, 2022Twitter for iPhone

These are the wallet addresses currently being held by the reserve: BTC: bc1q9d4ywgfnd8h43da5tpcxcn6ajv590cg6d3tg6axemvljvt2k76zs50tv4q ERC-20: receiving address: 0xAd41BD1cf3Fd753017Ef5c0da8dF31A3074EA1Ea Terra: terra1gr0xesnseevzt3h4nxr64sh5gk4dwrwgszx3nw

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Replying to

and

In terms of UST seigniorage being used in the future to buy btc, just as usdt seigniorage used to increase bank reserves, was discussed in my spaces with udi, and my recent podcast sprint across unchained, etc - i think i explained how things work pretty well

Replying to

Thanks, this is much better than our previous altercation. I will check out all of this. In the meantime: > the reserve is not funded through an initial coin offering, unless you mean the luna we are holding is an “ICO” All of

@LFG_org

’s wealth came from TFL’s ICO allocation…

What does it matter that TFL first reserved this LUNA supply for itself in the ICO, then transfered it to

@LFG_org

’s wallet and then sold some of it to VCs and converted some of it to UST and sold for USDT in Ethereum? The origin (and sustainability) of the funds is still the ICO

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Replying to

and

Hey Do, in all fairness to Eric it likely would have taken hi 15, maybe even 20 minutes to find these on his own. I'm sure he's far too busy building....oh shit wait he's a blogger, this is *literally* his job.

Replying to

and

eric didn’t have time to listen to any of that he was too busy blogging for eight hours straight asking question that were answered in a one hour interview

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305_Capital

@305_Capital