Cryptocurrency Luna Now Almost Worthless After Controversial Stablecoin It Is Linked To Loses Peg (cnbc.com) 84
Luna, the sister cryptocurrency of controversial stablecoin TerraUSD, has collapsed to nearly $0. From a report: TerraUSD, or UST, has been dragged into the spotlight in the last few days after the so-called stablecoin, which is supposed to be pegged one-to-one with the U.S. dollar, fell sharply below the $1 mark. UST is an algorithmic stablecoin which uses code to maintain its price at around $1 based on a complex system of minting and burning. A UST token is created by destroying some of the related cryptocurrency luna to maintain the dollar peg. Unlike rival stablecoins Tether and USD Coin, UST is not backed by any real-world assets such as bonds. Instead, the Luna Foundation Guard, a nonprofit created by Terra's founder Do Kwon, is holding about $3.5 billion of bitcoin in reserve. But in times of market volatility, such as this week, UST is being tested. Its peg has been lost and now investors are rushing to dump the associated luna token. Luna's price has plunged from around $85 a week ago to trade at around 3 cents on Thursday, according to data from CoinGecko, making the cryptocurrency almost worthless. The Luna token was trading at $121 last month. At the time of publication, Binance, the world's largest cryptocurrency exchange, has delisted Luna Futures-USDT margined contract.
House of Cards (Score:5, Funny)
Asked for unregulated finance, you get unregulated finance.
Happy trails.
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Horseshit.
Sorry, but the only single reference i can found for this is a single random Reddit post. 100% speculation with zero evidence. Why are people taking it at face value?
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according to a message sent to Hoskinson by a person named Anna, who claimed to have borrowed 100,000 Bitcoins from Gemini.
Yeah, that sounds like a rock solid source of information...
Re:Regulated finance isn't much better (Score:5, Insightful)
regulated currencies are far from perfect, it's true, and far too many fat cats abuse the system. But please tell me, when was the last time the USD lost 98% of it's value in a single night? Oh wait, the answer is: never. Not even once. Not during the great depression. Not during the 08-09 crash. But when it comes to unregulated (crypto)currencies, it seems to happen every 3 or 4 days.
You say our regulated system is just as corrupt as crypto? You're absolutely 100%, completely, oh-so-badly wrong. I'm not sure you actually know all that much about how finance works. Floating a crypto company requires a half-page of code, a bank account, a shady accountant and a pinky swear that you're totally not-a-crook. Floating a company on the stock exchange means that the SEC gets so far up in your business that you wind up expecting a bill from a proctologist.
Please, by all means, sink as much $$$ as you want into unregulated finance.
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But please tell me, when was the last time the USD lost 98% of it's value in a single night? Oh wait, the answer is: never. Not even once. Not during the great depression. Not during the 08-09 crash
Well, yeah, the dollar might have not, but there are lots of other currencies around which suffered from hyperinflation at some point. Some do experience it right now.
Re:Regulated finance isn't much better (Score:5, Insightful)
The only national currencies that experience hyperinflation belong to countries that were already in hyper-deep-shit. That connection isn't a coincidence. Crypto types hold up hyperinflation as a boogeyman but they can only ever seem to come up with a handful of examples.
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The only national currencies that experience hyperinflation belong to countries that were already in hyper-deep-shit.
OK, let me adjust a few words...
"The only cryptocurrencies that experience hyperinflation are those that were already in hyper-deep-shit."
See, it's the same thing, the difference is most cryptocurrencies experience that, simply because they are shit, that's why they were coined (see what I did there?) "shitcoins".
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I'd disagree with you only on the basis that cryptocurrencies aren't currency. That was the initial intention, but the idea turned out to be unworkable so they were pretty quickly turned into speculative assets and "financial instruments."
Re: Regulated finance isn't much better (Score:2)
OK, but by that reasoning essentially all crypto currencies are I'm deep shit.
Seems like in a decade they have a far worse track record than the history of fiat currency.
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I like to think of systems without regulation like an NHL game without rules or a referee. It would risk turning into a game where the players spend more time beating each other up, rather than playing fair.
Regulations are there because of bad players, and invariably everyone would risk becoming a bad player if it was the only way to stay competitive. Rules and regulations allow the bad players to be penalised, while not risking everyone slipping down that slope into the shit pit.
The promise of crypto is ni
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Spot On.
I would simply add that the Financial Industry is regulated by the Financial Industry.
It is called a "Self-Regulated" Industry.
The SEC is only applying regulations decided by the Financial Industry itself.
What could possibly go wrong?
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Spot On.
I would simply add that the Financial Industry is regulated by the Financial Industry.
It is called a "Self-Regulated" Industry.
The SEC is only applying regulations decided by the Financial Industry itself.
What could possibly go wrong?
Plenty of things can go wrong, hence the government stepping in when it feels self-regulation isn't working. This assuming that the government is acting in the best interest of it citizens.
Re: Regulated finance isn't much better (Score:1)
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Defects in how the actual economy, based on things with productivity and concrete value, are regulated totally justify schemes based on vapor and bullshittery!
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Re: Regulated finance isn't much better (Score:2)
Found the ad hominem attacker, who finds wildly speculating about the alleged motives of people he disagrees much easier than actually thinking about anything related to the topic under discussion. :/
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* USA != World.... USA + EU != World
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Don't be silly. Of course the USA != the world. There is also China, which is in a quantum superposition of being complete crap compared to the USA and also ten minutes away from enslaving everyone and making them kiss some red book they're always carrying around.
Oh, and Russia.
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Sure it's America. You see, the Americas were named that by a German mapmaker participating in a French project as a tribute to an Italian navigator who worked for the Spanish and Portuguese. It was used for a few hundred years by the mostly Spanish and Portuguese who moved to the place, until some Brits who didn't like paying taxes accidentally become independent and decided the name was shiny and theirs now.
Re:House of Cards (Score:5, Insightful)
People don't want regulations until something unregulated hurts them.
I live in a fairly conservative township. And the populous was in general pissed at the State (which trends towards being Liberal) for all those environmental laws that makes running a business more difficult.
Then a company was found to be illegally dumping chemicals which got into the Water Supply which made many people sick, or their friends and families. Housing prices dropped, so people couldn't sell their homes and move to a different area, because their homes were deprecated a lot. Many of the small businesses closed down, because they needed clean water to operate their business, and other businesses didn't come to fill the gap, because they didn't want to touch the area.
In short it killed the Small Local Economy, even during a period of economic boom for the rest of the State and the Country as well.
So we see these people who were once complaining about too much regulations from the state, are now yelling Why didn't the State Come in earlier to fix the problem, how do we make these companies who polluted the local water supply pay for their damages, how much money can we get from the state to help clean up our water problem.
The problem isn't too much or too little regulation. But for each regulation out there how good is it, what is its cost vs benefits, how do we enforce it to make sure bad actions are corrected before things go real bad, and what issues make the regulation difficult to follow, and how can those be minimized.
The reason why more Liberal people are in Cities while Conservative people are in Rural areas is because in Cities you are daily positively affected by Government and its rules and regulations for the most part enhance your life. While in Rural areas, the Government just seems to be giving you rules and orders that seems like it is trying to control your life, and property, which seems to degrade your life's possibilities.
We have gone onto the band wagon or Regulations are Good or they are Bad. Where it is more of a case, Some Regulations are Good, Some are Bad, and others can be improved.
Translation: People are shortsighted fools (Score:2)
That is all.
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Are these chemicals in the water what made you Capitalize Random Words?
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Nassim Taleb suggested what looks like a good rule to me. Leave regulation out of it where the common law can take care of things, by citizens suing each other for wrongful behavior until the system self-corrects; but apply regulation when the consequences may take too long to manfiest and the damage is too great be undone. Environmental issues are an obvious example, and there are others.
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Not a bad idea, though lawsuits are a great solution for the wealthy (who can afford good lawyers and can survive the N years for a lawsuit to be resolved/enforced) and less so for everyone else. And "I don't want regulations passed by elected officials, I want lawsuits decided by often unelected judges" is an interesting opinion when you break it down a bit.
Also, and this is not directed at anyone specific, but I've found a painfully strong correlation between "people who don't want government because law
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You want to keeping regulations at the minimum as each new one makes the system more complex; also it appears that in the end the non-core regulations end up gamed by special interest groups whose influence the regulations were supposed to limit. Whereas bottom up solutions like class action lawsuit tend to keep the corporations honest.
The set of regulations, to paraphrase Einstein, should be as small as possible, but not smaller.
I found the link:
https://www.caepla.org/no_skin... [caepla.org]
"There are two ways to make
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In theory, you're right. Sadly, I don't think that theory and practice line up well.
If a big corporation pollutes your neighbourhood, you can get together with your neighbours and sue the hell out of it.
Before the EPA had rules about dumping pollutants into the environment, many people tried suing companies who were doing this. But the lawsuits only work IF THERE IS A LAW OR REGULATION WHICH IS BEING BROKEN, so (before the EPA) companies were rarely stopped by lawsuits. The example you give proves that we need some level of regulation.
Regulations are not perfect; nothing is. And regulatory capture is a constant problem.
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Re: House of Cards (Score:2)
The problem I see with this is that often an ounce of prevention is worth a whole lot more than a pound of cure.
It also assumes the bad actor can actually cover the damage they do.
In the example of the polluted water supply, can the perpetrator even afford to fix it?
It's pretty easy to do more damage than an entity can afford to fix, what's the solution then?
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Often the ounce of prevention has hidden costs -- it manifests in the mid and short term as a burden or even a way for actors with influence to game the system.
The hard part is to know what to regulate and what not, but the hardest still is realizing you should regulate as little as possible. Me, I would include hard polution in the "regulate" list -- anything where damage is hard to reverse.
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The world already is. Robots and commie slaves do most the real work. The rest is a poker game over who gets the proceeds. At work I automate bullshit to make bullshit more efficient.
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Yes, to be honest. One usually has to play the game to get game chips.
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We are all part of the problem.
"Pretend economy" (Score:2)
"The world already is"
I suppose... maybe? But within this pretend economy I could walk out my front door and go buy anything from a pack of gum to a yacht (and more) with my fiat currency, accumulated through my labour. Well... I can't buy a yacht. But I could buy a low-end Porsche outright.
Calling it a pretend economy sidelines the fact that it's mostly working, and will probably continue to do so for quite some time.
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One can buy real stuff with any fiat currency as long as some perceive it with value. The problem happens when that perception changes.
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"The problem happens when that perception changes."
Of course. But if I had to put all my money on a single economical horse, I'd go with USD, GBP, CDN, EUR, JPY, even CNY before any crypto.
Re:"Pretend economy" (Score:5, Insightful)
One can buy real stuff with any fiat currency as long as some perceive it with value. The problem happens when that perception changes.
It is amusing that the two opposite ends of the financial fantasy universe -- the gold bugs that claim only hard gold has any real value, and the crypto nerds who claim that everything is imaginary -- rely on the same claim that currency issued by national governments (given the scare label "fiat currency" as opposed to just "currency") is all smoke and mirrors, mere perception -- so the crypto coin in no worse despite is obviously extremely unstable nature.
Those "fiat currencies" are backed by real national economies with real physical assets and the productivity of millions of people and factories, and value fluctuation is rarely based on mere perception, but almost always on actual economic and hard financial factors -- trade balances and the like. Any perception-based changes are transitory and the value regresses to its underlying economic basis. Crypto has no underlying economic basis at all.
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I think we can agree that "fiatness" is on a continuum. Traditional banks and investments have more checks and balances on them than crypto, meaning less fiat-related risk, but none have zero risk.
If things get apocalyptical even gold will be nearly worthless because everybody will hawking it for goods, flooding the gold market. Water and food would then become more value than gold. Mormons stockpile food for a reason.
One quibble (Score:3)
"Now"?
To provide the crypto advocate perspectives. (Score:3)
a) This is good news, buy the dip!
b) This wasn't a good coin, it was a shitcoin
c) But the USD had inflation which basically meant the USD has collapsed entirely and is no better than this
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a) This is good news, buy the dip!
I think the dips are doing the buying.
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Scammers gonna scam!
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To be fair, it WAS a shitcoin.
Whether there are any NON-shitcoins in circulation is an unanswered question...
Er, ok (Score:2)
This is like listening to alchemists argue various fine points about things that happen with phlogiston.
Only D&D players know so many obscure "facts" about so many imaginary things.
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With crypto I’m amazed how people will absolutely steamroll me with jargon I’ve never heard of and then turn out to be completely wrong.
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The call if "financial engineering" but really it is "financial creative writing".
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There are two kinds of crypto people:
1) the ones who are trying to convince you that ECDSA and hash trees are mystical technology that nobody understands, presumably so they can make a few bucks off you
and
2) the ones who were convinced by (1).
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> Only D&D players know so many obscure "facts" about so many imaginary things.
Really? *Only* D&D players? Have you ever met a Marvel or DC fanatic?
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Ever watch rodeo poker? (Score:5, Insightful)
The object of the game is to keep your hands on the table, then they let in a bull. The last guy with his hands on the table wins, that is unless the bull aims dead center at the table and gores a few players. [youtube.com]
Crypto and DeFi is like that.
Re:Ever watch rodeo poker? (Score:5, Insightful)
No. The winner is the guy who conned all the idiots into playing rodeo poker and pocketed the entry fees.
Nothing has changed = Good time to buy (Score:2)
Nothing has changed with the inherent proposition of Luna? "Reserves come from the code", or something like that?
If true, this sharp an unexpected discount would suggest a good time to buy, would it not?
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Nothing has changed with the inherent proposition of Luna? "Reserves come from the code", or something like that?
If true, this sharp an unexpected discount would suggest a good time to buy, would it not?
I believe you meant to say: "If true, then is would always be batshit crazy to buy, would it not?
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Every been to a place where two currencies are used side by side and both colloquially "dollars"?
When the exchange rate is ~150:1 and you go in to an art gallery and have to decide for yourself which currency is priced in?
The value is what the buyer assigns it.
Like this Warhol print: https://www.cnbc.com/2022/05/1... [cnbc.com]
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... this sharp an unexpected discount would suggest a good time to buy, would it not?
Sounds a bit like selling penny stocks. Sometimes, a stock is cheap because there is no future in the company. There is money to be made in penny stocks, by finding suckers to buy them, Wasn't that the theme of The Wolf of Wall Street?
It's an economy about nothing (Score:1)
Cryptocurrency, NFTs, meta real estate; are all just 1s and 0s on some computer storage somewhere. Those 1s and 0s represent absolutely nothing.
Everybody is in a wad about global warming, but nobody seems concerned about the colossal amounts of energy we are wasting on these ponzie schemes.
As I said yesterday (Score:2)
Re:As I said yesterday (Score:4, Interesting)
I can wait for Tether to blow up. It will be spectacular.
Anyone believing there's $80bn somewhere backing up all the USDT in circulation is up for a very, very rude awakening.
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And the German Democratic Republic [wikipedia.org]... I mean, what's in a name? Marketing and propaganda.
It's remarkable how UST/Luna was set up as a Ponzi (Score:4, Interesting)
This interaction between tokens to try get an algorithmic stablecoin was always doomed to failure. It can only mathematically work as long as people keep pouring money in.
Next time someone offers you 20% APY just to boost the value of a token supporting another "stable" currency, run away and don't look back.
Article outlining "stablecoins" (Score:3)
The great quote from the article:
Algorithmic coins are "just a fancy way of saying, 'We are going to say that this is worth a dollar because it's backed by another asset that we also create out of thin air,'"
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Apparently you only need to make things more complex than the tiny intellects of enough people can comprehend, and suddenly they think this stuff is great...
I mean it is completely obvious that "stable"-crapcoins of this type cannot work and will stop to work as soon as enough morons have been separated from their money. Still they apparently find plenty of morons to pour in money.
Will the FTC ever step in? (Score:3)
This is downright fraud. There's nothing stopping Joe off the street from creating their own crypto-"currency", hyping it until he gets people to pump money into it, only to dump it when the price is high, then walk away with the fools holding onto all the worthless "assets".
I'm really curious to know how long this can go on without the FTC saying at least -something-. I know they can't regulate it, but they could at least say something along the lines of "We don't recommend investing in crypto due to its volatile nature and resemblance to fraudulent activities like Ponzi and pyramid schemes."
DCA in? /s (Score:5, Interesting)
First one down ... more to follow.
Anyone's guess how much BTC will plummet - and it really is just a guess.
"Expert" "Crypto-bro's" guess anything from $24k to $10k.
That's all you really need to know - this entire market, as many pointed out over the years, is Tulip mania baby, in a modern guise.
The die-hard coolaid drinking "Crypto-bro's" will say "it's just crypto winter, we'll come out the other side - 2023 and MOON!"
Maybe, but the amount of asses getting burned right about now is probably significantly more than the asses burned in 2017/18 - and the amount of retail investors, having seen their ass, will never trust cryptocurrency again. ... and yet, you _still_ see the classic "I'm going to fill my bags! - I'm DCA'ing in!" (dollar cost averaging).
Nuts.
USDT is showing signs of a wobble - if that tanks, if it is finally proven there isn't sufficient _real_ dollars behind each tether - which many suspect - game over for the entire market.
Good riddance too - for the most part.
I still see some fantastic use-cases for DeFi and cutting out the middlemen, but just without the insane speculation.
It's going to be an interesting ride watching this collapse and seeing what impact it has in financial markets overall.
My bet is HEAVY regulation is just around the corner, that is going to quite literally nip any chance of a recovery in the bud.
Tulips (Score:2)
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https://tulip.garden/ [tulip.garden]
The real players create, um, "Yield Aggregation
Homesteads". Or "yield aggregation platform[s] built on Solana with auto-compounding strategies for vaults."
Surprise value is zero (Score:2)
Except top the morons. They are always surprised when obvious things happen, because they do not and cannot understand the real world. Lets see whether the rest of the hot air constructs survive until the end of the year.
Legal tender (Score:2)
I have said this before on Slashdot, but the thing that makes dollars a token of money is the law that says you must accept dollars in payment, in any transaction in the USA. There is no obligation to accept GB Pounds or Euros in payment, even though those are generally considered sound currencies. You have to exchange foreign currencies for the local legal tender. I presume I would have difficulty buying my groceries in the UK, using US dollars. The legal standing of a genuine currency provides the element
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actually you'll find many stores in the major cities in UK do accept dollars. In SE and east asia in the big cities dollar is widely accepted too and ATM give choice of dollars besides local.
It's a global reserve currency, there is more to it than just U.S. law. the cryptocoins have nothing the major currencies do as far as the legal and international agreements; and the "stablecoins" have been found to lie about assets that would keep them "pegged" to any currency.
In short, cryptocoins are extremely toxic
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[The dollar] is a global reserve currency, there is more to it than just U.S. law.
That is true. I guess the dollar has additional status in many countries outside of the USA, that other foreign currencies do not have.I am guessing that this is down to international trust, rather than national legislation. Though I have never observed dollars being accepted by any UK retailer, I imagine that in areas frequented by American tourists, this might be worth the inconvenience of converting dollars to GB pounds. I presume UK banks won't accept US dollars directly.
In SE and east Asia in the big cities dollar is widely accepted too
I know about that. Again, I pres
I can buy $100 worth at 3 cents (Score:2)
Value of government backed money versus crypto coi (Score:2)
All your bases are belong to us. (Score:2)
Same thing.
In other news, Anyone want to buy my Luna stake? I'm willing to let it go before they fix the code that ensured the value peg. You'll be rich!