5min chapter

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This Is How the Terra Stablecoin Actually Imploded

Odd Lots

CHAPTER

Is It a Hyperinflation?

The luna protocol itself will always consider us t as worth one dollar of luna, right? So the issue is, if you're guaranteed to get a dollar for us t, all that happens in, let say, luna, or a dollar's worth of luna for us t then luna plunges by 99%. That pushes it down. The next wave of redeemers, that makes even more billions. And so you have thislike true hyper inflation to defend the peg. But that's what the amm is supposed to do. I mean, this is the bot basically working as con instructed. Itt, yes, exactly.

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