Leading up to this week:
Here are some key events regarding Luna and UST leading up to this week:
1. Lunatics. Communities are cute but this might not have been the best name. Of all the tribal nicknames in crypto, this might honestly be the worst in my opinion. To be fair, I believe this has nothing to do with what occurred this week. Legendary crypto OG and investor Mike Novogratz even got the above tattoo and declared himself a "Lunatic." We're all wrong sometimes, but this one is particularly embarrassing.
2. "Luna Foundation Guard further bolsters stablecoin reserve by raising $1.5 billion in bitcoin." If you were like most of the crypto community (like myself), you probably cheered this headline just six days ago from CNBC. In fact, this indicated that LFG had roughly $3.5 billion in bitcoin at the time, making it one of the top 10 holders in the world.
In hindsight, this headline provoked two questions: 1. If UST is an algorithmic stablecoin backed by Terra, why does it also need to be backed by bitcoin if nothing is wrong? 2. If an organization that has a function to stabilize a stablecoin buys bitcoin, what are the odds it would see that bitcoin when it, you know, does its job?
3. Do Kwon launches attacks against other stablecoins
Seemingly confident about the success of his project, Do Kwon, Founder & CEO of Terraform Labs, which created Terra, made a series of tweets that haven't aged well. Shockingly, he hasn't deleted any of these:
1. He loves chaos. 2. He criticized USD Coin and centralized stablecoins (his least offensive tweet in my opinion). 3. Most outrageously he called for attacks on DAI, another algorithmic stable coin.
These tweets didn't age well.
Personally, I am not happy that people lost money or that the market crashed (so did my bags). But in my opinion, Kwon's arrogance and irresponsibility are intolerable. As an indirect custodian of tens of billions of dollars of other people's money, he has acted in a way that is unthinkably awful.
4. Bombshell
To make matters even worse, a bombshell report from CoinDesk today indicates that Kwon was one of the undoxxed founders behind Basis Cash in 2020, another algorithmic stablecoin that failed. |