What many people sympathized with the recent LUNA incident was that it was virtually difficult to guarantee something without collateral. The Terra ecosystem grew due to the AnchorFlotocol service, which pays 20% interest if you deposit TerraUSD (UST), but this was not possible in the first place.
Terra said it would pay interest to depositors, such as interest accrued from refinancing Terra, but investors were only interested in interest from depositing Terra, but they were not interested in lending Terra, an unsecured stable coin. 바이낸스 거래소 가입 In fact, in this situation, the bank did not lend it to the depositor, but the depositors lent it to the bank without collateral. The bank only took the money of the person who recently deposited and even gave interest to the person who deposited it first, so when the bank run began someday, it was bound to collapse out of control.
However, there were many investors who made a big profit by short selling in the bear market in the Luna fall.
Today, I brought a report on this.
Despite the domestic coin LUNA (LUNA) plunging more than 99% for several days, the transaction log of individual investors who made hundreds of millions of won in profits is becoming a hot topic among investors. This is because it contains a history of thousands of percent returns through short-selling transactions in advance before Luna plunges.
L, who has been working as a developer at the company for six years after graduating from engineering school, said, “I was surprised to see my blog post shared in a chat room while working at the company.” This is because Mr. L’s blog was less than 1,000 times even if the total number of views of the posts he has posted so far was added.
However, as of the 15th, the LUNA short-selling investment diary, which was written between the 8th and 13th, had more than 150,000 views and hundreds of comments.
On his blog on the 8th, L claimed that it was “Phonjagi” about the operation principle of LUNA and sister coin TerraUSD (UST). He pointed out that if stable coin UST is to be maintained, it should continue to buy Luna in the market, and eventually, the person who buys Luna at the end has to pay all the damage. And then we came up with a scenario where Luna was about to crash, and that’s exactly what happened.
I met Mr. L on the 15th and heard about it.
Q. When did you expect Luna’s crash?
A. “We watched the coin called ‘Wave’ plunge in April, which soared together in the wake of the war between Russia and Ukraine in February. Analyzing the reason, it was because of an algorithm-based stable coin called ‘Nutrino Dollar (USDN)’ linked to Wave (a coin with a fixed value of $1). The problem was the circular structure of continuously purchasing waves with the money saved by issuing Nutrino dollars and raising the price. When the Nutrino dollar failed to maintain a dollar, the wave collapsed in an instant. However, I found out that LUNA and Terra have the same structure. It occurred to me that the same problem would break when Terra’s price was $1 per dollar.”
Q. Why did you think Luna and Terra’s structure was a Ponzi scheme?
A. “Terra (UST) is practically worthless. It’s no use holding a terrace. Terraform Labs has created something called an anchor protocol, which acts as a bank to create demand for Terra. He said he would pay 19.4% interest per year if he paid cash to buy Terra and leave it here. Deposits swarmed in the market. They also lend Terra, and the interest rate on the loan is 12.4% per year. In short, the loan-to-deposit margin is reversed. Banks on the market sometimes offer special products with reverse margins, but this has a set limit. But there was no limit to Terra’s case. It is a structure in which interest can be paid only when money continues to come in from the market.”
Q. Did Terra designer also know that it was a Ponzi scheme?
A. “It is difficult to conclude that the entire Terra system is a Ponzi scheme. However, if you look at the anchor protocol separately, it is impossible to maintain it from the beginning. Terraform Labs tried to organize Terra to have real value in the future. It tried to increase the number of platforms that can be traded through Terra and release Terra-based games. However, the biggest reason for the growth of Anchor Protocol, the abnormally high interest rate, eventually hampered it. It couldn’t last until Terra actually had value. Even the architect would have known that he couldn’t hold out in the first place. It’s an easy fact to understand.
Q. How did you expect the timing of the plunge?
A. “The size of the Tera (UST) deposited in the anchor protocol, the market capitalization of LUUNA, which serves as collateral, and the interest rates on deposits and loans can be seen by anyone due to the nature of the blockchain network. Through this, we calculated the speed of how quickly the reserves would decrease. When calculated on April 11, I thought there would be a bank run in 59 days (June 8).”
Q. It happened earlier than that.
A. “As Luna became a huge success in the top 10 market capitalization, other Altcoin began to announce plans to release stable coins based on algorithms. Tron (TRX), a rival coin, launched a stable coin called “USDD” and said it would pay an annual interest rate of 30%. Watching many investors sell Terra and prepare to transfer to Tron, Terra’s deposits were expected to run out faster and checked the remaining deposits every day. On the 8th, after seeing that Terra’s price could not recover from $0.99 to $1.00, it started short selling.”
Q. If you misjudged and rebounded, you could have lost a lot of money.
A. “I practiced enough to hold a short-selling position while reviewing the pattern in which Wave plunged earlier. Since there must be a rebound, I invested millions of won in the rebound so that my position would not be liquidated. For three days, I made a deal with little sleep.”
Q. The Luna Foundation could have maintained its price by selling about 4 trillion won of Bitcoin to defend its price.
A. “We tried to secure profits by continuing to profit in the middle (to secure profits through position arrangement). If the rebound was larger than expected, I was thinking of cutting losses (limiting losses) before losing all profits.”
Q. Confidence in Stable Coin has fallen due to the Luna incident. Even Tedder’s dollar collapsed for a few days.
A. Tether (USDT) is not safe either. This is because investors’ distrust of stable coins in general has grown and the U.S. government has a justification to regulate them.
Q. Unlike Terra (UST), Tether (USDT) uses liquid assets such as cash and bonds as collateral.
A. “The proportion of bonds among Tether’s collateral is quite high. However, most of these bonds were bought in the era of zero interest rates. The price of bonds goes down during the interest rate hike. Even if Tether sells all of its bonds, it is likely to be less than Tether’s market capitalization. If the investment attraction in cryptocurrency decreases, investors will suddenly withdraw in large quantities, and in this case, cash may not be returned.”
Q. Where did you get your knowledge of investment and economy?
A. “I’m an ordinary office worker who graduated from engineering school. Knowledge of economics was gained through lectures at the Korea Communications University. Since I was a college student, I have practiced investing in stocks and real estate with a small amount of money. Currently, it is mainly investing in domestic stocks.”
Q. The size of the funds to be managed is.
A. “I’ll just say it’s a 10-digit unit (meaning billions of won).
Q. How does it feel to make money in the plunge?
A. “I made money from the Luna crisis, but some people are in pain after losing a lot of money. I was a little scared when my investment history got the attention. Because you might think that some of the money they lost came to me.”
Q. Why didn’t many people know the problems of the Terra ecosystem?
A. “Since 2017, when the Bitcoin boom was in full swing, I have studied blockchain and virtual currency. Blockchain technology is definitely meaningful. However, no matter how much I look at it, I don’t think cryptocurrency is worth it yet.”
Q. Why did you invest in virtual currency when it was worthless?
A. Until now, cryptocurrency transactions have only made profits from arbitrage transactions between exchanges. This short selling transaction is an investment in that the value will be zero