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The Almighty Buck

Luna Nosedives Under $2, Loses 98% Of Its Value As TerraUSD Struggles To Regain Its Dollar Peg (forbes.com) 68

Posted by msmash from the closer-look dept.
Following a day in which teetering stablecoin TerraUST (UST) bounced around $.90, it resumed its free-fall overnight to approach $0.30 before recovering partly to $.43 this morning. From a report: However, this performance could be considered downright bullish when compared to LUNA, the token designed to maintain its $1 peg, which has now fallen below $2. LUNA is down a staggering 98% in the past five days, which has seen its market capitalization lose $25 billion this week. Today attention will focus on whether the Luna Foundation Guard, led by founder Do Kwon, will be about to recover from this downward spiral. The Block reported yesterday that the team was in talks to obtain $1 billion in additional collateral from unnamed hedge funds and market makers. However, that has not come to fruition.
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Luna Nosedives Under $2, Loses 98% Of Its Value As TerraUSD Struggles To Regain Its Dollar Peg More

Luna Nosedives Under $2, Loses 98% Of Its Value As TerraUSD Struggles To Regain Its Dollar Peg

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  • Good (Score:5, Interesting)

    by ebcdic ( 39948 ) on Wednesday May 11, 2022 @10:00AM (#62522908)
    That's all I have to say.
    • Shouldn't it be called an unstablecoin then?

      • Re: (Score:2)

        by gweihir ( 88907 )

        Shouldn't it be called an unstablecoin then?

        Naa, that works on the principle of the "Big Lie": If it is bad at xyz, call it "Great at xyz!". There are lots of stupid people that cannot do fact-checking and will fall for this. Noticed this a while ago with some brand of toilet paper I used to buy. It came with a big "Now even sturdier!" on a redesigned package and what did I notice? It was a lot less sturdy and the quality had dropped. Apparently claiming the exact converse of what changed on the package can somewhat compensate for that. Capcoins of a

        • I was wondering whether I should add a second line to my post advertising my about-to-issue StableAssetBacked-GuaranteedSafeTrulyAnonymousAndSecureCoin.

          • Re: (Score:2)

            by gweihir ( 88907 )

            I was wondering whether I should add a second line to my post advertising my about-to-issue StableAssetBacked-GuaranteedSafeTrulyAnonymousAndSecureCoin.

            Well. It sounds overdone but with all the concentrated stupid we see in crapcoins people may fall for it.

    • Re: (Score:2)

      by gweihir ( 88907 )

      Indeed. Maybe this stupidity can now come to an end. I have zero compassion for morons that, despite ample warnings, gamble with money they cannot afford to lose.

    • Given that it's yet another /. headline with no context WTF Luna and TerraUSD are, I have to agree.
  • Maybe I don't understand the concept, but it seems like LUNA is supposed to be pegged to $100, not $1.

    • Maybe I don't understand the concept, but it seems like LUNA is supposed to be pegged to $100, not $1.

      Yes otherwise "supposed to be pegged to $1 but is now under $2" would seem to indicate a gain... :-)

      It seems like it's just pegged, period.

      • I assumed they mistyped 2 cents as 2 dollars. Looking it up though, you are the correct one, it must be $100.

        To me this indicates that people should buy, it is a risk now, but it is less of a risk than yesterday. If it goes up however, you stand to gain $98 on a $2 investment if it rebounds properly.

        Of course, there is still the risk it will fall to $0, in which case you lose the investment, but still less risk than those who are cashing out after losing so much.

    • Comment removed based on user account deletion

    • Re: (Score:2)

      by cfalcon ( 779563 )

      Luna is not pegged to any value. Luna goes up when people use UST and down when people do not use it or trust it. UST, which is pegged to a dollar, briefly lost its peg- obviously, if a stable coin loses its peg, confidence in it will go down. Since that gets reflected in the price of Luna, everything that happened is what you would expect following the demonstration that the price of UST is not really good at a dollar.

      Here's Terra's own website on this:
      https://docs.terra.money/docs/... [docs.terra.money]

      The idea is expla

  • LUNA, the token designed to maintain its $1 peg, which has now fallen below $2

    As designed then?

  • It does not mean what everybody thinks it means.

    • Comment removed based on user account deletion

      • You mean I can't use it to buy a horse? Can I at least get the stable cleaned out?

        Not quite right, the stablecoin turns out to be what you find at the bottom a stable.

        • Re: (Score:2)

          by splutty ( 43475 )

          That actually has value. Quite a lot to mushroom growers. Unlike the coin.

          • That actually has value. Quite a lot to mushroom growers. Unlike the coin.

            Great point, especially with where the price of fertilizer is going.

    • Re:Stablecoin (Score:4, Insightful)

      by supremebob ( 574732 ) <themejunky AT geocities DOT com> on Wednesday May 11, 2022 @10:45AM (#62523058) Journal

      Yeah... you know that something is very wrong when crypto Twitter is screaming "buy the dip!" on a Stablecoin. They're not supposed to dip, that's the whole point!

    • Once again we're back to the "Fail to learn from history...." quote. There are tons of examples of trying to peg on currency to another currency...or gold, that end up failing when the underlying principle no longer makes real-world, rational sense. The countries who try this, tend to defend their currency until it becomes too expensive to do so and then said currency is un-pegged devalued, and the markets proceed. As far as I can tell this entire Luna/UST thing was used to prop up a process where a firm

  • Most stablecoins will collapse epically (Score:4, Insightful)

    by DeplorableCodeMonkey ( 4828467 ) on Wednesday May 11, 2022 @10:16AM (#62522950)

    The weasel-wording in their paperwork is their reliance on "cash equivalents" as a huge amount of their collateral. Dog crap grade commercial bonds that are 24 hours away from expiring technically fit that description, and fun fact hedge funds got caught by the big fish like the DTCC doing precisely that last year to prove they had collateral to avoid margin calls which is why the regulators tightened up collateral rules there (but not NEARLY enough).

    So yeah, TUSD is screwed hard. I can't imagine them recovering from this, but don't laugh too hard those of you who like to posture like you were "too smart to fall for this" because we are in an "everything bubble" now. There is literally no safe asset category in the market anymore. None. The carnage is going to blow up your house and 401k's value about as hard as the crypto bulls will be hit.

    • Comment removed based on user account deletion
    • But at least my 401k has some intrinsic value - stocks own portions of companies, which includes patents, real estate, customer contracts, machines, offices, etc. Even if those crash, which seems likely over a long enough time window, there's something real behind it all. With crypto all you have is a unique string of digits which has no real intrinsic value to fall back on.

      • stocks own portions of companies, which includes patents, real estate, customer contracts, machines, offices, etc.

        And many of those companies are also up to their eyeballs in debt which has seniority over you as a shareholder in the event of liquidation.

        • "And many of those companies are also up to their eyeballs in debt which has seniority over you as a shareholder in the event of liquidation."

          True. And yet even the most debt-ridden, poorly run companies on OTC are backed by more than crypto-anything.

    • There is literally no safe asset category in the market anymore. None.

      That is like 1929, when investors were panicking, moving their money from junk bonds to stocks to other bonds, desperately trying to find a place for their money. Eventually a lot of them settled on gold, and then gold was confiscated.

      The good news this time is that the economy is doing ok, even if the asset markets are not.

    • Re: (Score:2)

      by ebcdic ( 39948 )
      At least your house will always be worth enough to buy a house.
  • What the fuck is LUNA? My 401k is down this month, let's bitch about large cap index funds. Not as sexy? Fuck you.
    • Comment removed based on user account deletion

      • Re: (Score:2)

        by waspleg ( 316038 )

        That's because they offer funds of funds of funds so that they can layer fees. You have to dig through several layers to find out what you are actually buying.

      • While I completely agree with get out of the corp 401k, it is still likely you are down this month. About the only way you'd be up is if you were shorting stuff. And personally, I just don't. I view it as high risk.
        • Comment removed based on user account deletion
          • I expect another 50% down on NASDAQ. Do you want to weather that storm? But that is just my opinion. Could be completely off. I don't think the markets should be any higher than pre-pandemic. It was all sugar, and the sugar is gone. Could be wrong, but am ok with it. Cash reserves will get me to coffin(well oven).

    • Re:Fuck are we really reporting on minor altcoins? (Score:4, Informative)

      by Frank Burly ( 4247955 ) on Wednesday May 11, 2022 @12:02PM (#62523322)

      As explained better elsewhere, LUNA is part of a coin duo that is supposed to facilitate other crypto trades. The failure of this duo under pressure should indicate that the entire cryptocurrency market is unsound--that is the story (though you wouldn't know it from the summary).

  • ...by the angry mob that invested in you.

  • Huh (Score:4, Informative)

    by smooth wombat ( 796938 ) on Wednesday May 11, 2022 @11:29AM (#62523202) Journal

    And here I thought stablecoins were supposed to be, you know, stable.

    Apparently that's a misnomer.

    • > And here I thought stablecoins were supposed to be, you know, stable.
      > Apparently that's a misnomer.

      If anything in the crypto space is a scam, it's stablecoins. From Tether onwards, there's always been a problem. Possibly Coinbase's is large enough, but the problem is inherently near intractable.

      Stablecoins, however, are responsible for major crypto pumps, so they have their backers. Somewhere out there is a paper showing mathematically how Bitcoin's stratospheric rise was pumped by Tether, and o

    • Re: (Score:2)

      by shess ( 31691 )

      And here I thought stablecoins were supposed to be, you know, stable.

      Apparently that's a misnomer.

      I'm sure someone had a pretty stable revenue stream off of this. It just wasn't any of us.

  • Jesus christ, don't tell that now even Forbes can't tell the difference between dollars and cents.

    However, this performance could be considered downright bullish when compared to LUNA, the token designed to maintain its $1 peg, which has now fallen below $2. LUNA is down a staggering 98% in the past five days...

  • Word to the wise: don't tell anybody if you're operating pseudonymously.

    Betcha he faces lawsuits now for the failed stablecoin. I wonder who he pissed off.

  • I'm trying to care but I can't.

  • "The Block reported yesterday that the team was in talks to obtain $1 billion in additional collateral from unnamed hedge funds and market makers. However, that has not come to fruition."

    Got it- they have to borrow a billion dollars to make sure their reliable stablecoin doesn't implode back into the nothingness from whence it came.

  • ... the Sun shocked the world by rising in the East!

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