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1/ Important @terra_money 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.
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.
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 ($$$) at the same time.
- UST supply will increase and
- Luna supply will decrease.
This thread explains how you can both help the ecosystem and profit ($$$) at the same time.
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.
@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.
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.
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.
5/ To solve the supply crisis, @jumptrading initiated Prop 27 to make minting of UST 20x more efficient than before - https://agora.terra.money/t/terra-on-chain-liquidity-parameters/305
With prop 27 in place, $10M UST / day minting is now possible.
With prop 27 in place, $10M UST / day minting is now possible.
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
And what are the odds of such slippage for a $2B FDV asset
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.
This will require a 100M $Luna burn at current prices - around 11% of the total supply.
Prepare accordingly.
7/ We are taking a meaningful step in @terra_money's journey towards creating the first scalable & decentralized algorithmic stablecoin.
Looking forward to next week.
Looking forward to next week.
