Although a depeg of this proportion was theorically possible, this event will be a marking point in defi history, a black swan never seen before to this scale in crypto.
Now the question is; is the project over? In my humble -nobody- opinion, I think UST will be saved with a bit of time, but LUNA will have to loose most of it’s remaining value for this to happen.
On the bright side, LUNA hasn’t lost it’s utility, the ecosystem is still expanding. But Luna was always about pushing the Terra stablecoins ecosystem, not just another altcoin.
Do Kwon has already proved he and LFG will stand to hard times and push on to innovate and overcome struggles.
This is a make or break challenge, contrary to most people, I still have confidence in the system, but it will take a lot of effort from the team to regain the trust of investors.
If we get through this alive, the ecosystem will anchor (pun intended) itself as one of the definitive crypto projects ever next to Bitcoin and Ethereum.
never been a better time to arb ust on chain. made back everything I lost in the leverage flush lmao, debt free ontop of that i guess I ended up making out like a bandit. Guess my next course of action is to wait until I can buy anchor and fix it.
Just curious, how and where can you do that, as the core function of being able to buy $1 worth of LUNA for 1 UST is not functional?
I mean if it was that easy, then theoretically every UST holder should be able to exchange each UST for $1 worth of LUNA, then send it out to a CEX and sell it, taking only minimal loss (however much it loses in those few minutes).
we can, its because the rate of profitability of the arbitrage is faster than the rate of UST price decline. you redeem $1 worth of luna for $1 worth of ust on terra station. I executed my trades much earlier in the day (skipped sleeping) so that I can do it in least congestion and while ust price was dropping hard. the harder the drop in price the more profitable the flywheel arbitrage is.
in particular: this is my route:
cex’s are down fuck cex, fuck the banks, fuck the fed and fuck the sec.
Swap UST for luna on Terra station
use portalbridge.com to bridge luna to solana
swap luna for UST on solana via jup.ag
use bridge again to bridge ust from solana to luna
repeat process. average yield i got on each arb was 15% average time to arb was 15 minutes due to congestion.
Thanks! But in the end you still have to use a CEX to change it into real money.
For more conservative types, shouldn’t UST->LUNA on Terra Station, send to CEX (should take <1 minute), and then LUNA->USD work? Won’t make a profit, but loss on UST should be less than the current nearly 50%.
On Terra Station swap:
Oracle price 1 Luna = 2.31 UST
Expected price 1 Luna = 3.39 UST
CEX price of LUNA is 2.24 USD. If 1 LUNA would cost 2.31 UST, OK. But apparently it’ll cost 3.39 UST, which is a big loss.
And this is just for 1 UST value put in. Putting in anything bigger it’s worse.
By my calculations, still about a 40% loss this way, swapping UST to LUNA, then selling LUNA on CEX. I put in 100,000 UST, Terra Station gives
Spread 14,728.821111 Luna
Minimum received 29,718.067166 Luna
29,718 LUNA * 2.15 CEX price (likely high estimate, doesn’t take into account time to send and sell the whole amount) = 63,945.
So, getting 63 cents on the dollar on UST this way…
EDIT: which coincidentally works out to be slightly worse than UST straight up exchange rate on CEX of 0.65 at this very moment. That makes sense, as the straight-up UST:USD rate should have this baked in and reflect the “real value” of UST.
you make the profit on looping this over and over and then you cash out your much larger (100%++) ust share for usd stable after.
its about collecting the profit with speed and exiting once your back to neutral or positive.
also the ust price your seeing on astro is not market price, you have to use the terra market module to get spot price of luna, denominated in usd not ust
