Another important distinction when it comes to the differences between $ETH and $LUNA, $UST has to do with the constant friction between the holders of the value token and the actual users of the ecosystem.
Let me explain 👇
Let me explain 👇
https://twitter.com/permabeaull/status/1433753998742462466
As the $ETH network gets used by more and more people, that congestion causes problems for those using the blockchain. The gas fees become incredibly high, the token value fluctuates making it hard to plan for paying the gas, more failed transactions, longer wait times, etc.
But when the experience for users gets really bad, the holders of the token accrue a lot of benefit. Due to EIP-1559 more has fees means more burning of the supply, more usage causes an increase in the price of the token through network value and the necessity to pay for gas
The same is true at the other end of the spectrum, as slow times for the network help the users of the blockchain pay reasonable fees at an expected lower price, but with less burning or price appreciation for the holders
This causes a misalignment in incentives for the participants in that ecosystem. There are constantly two camps who’s positive experience depends on the negative experience of the other
Because of the two token system of $LUNA and $UST, this is never the case. $UST constantly provides a stable value, minimal and predictable gas fees, and doesn’t depend one bit on $LUNA’s volatility
But at the same time $LUNA holders and stakers rightly benefit from increased usage and growth of the network (and vice versa), all without the cost to user experience
The value of the ecosystem token shouldn’t come at a cost to those who actually contribute to that blockchain’s usefulness and success. Terra solves this problem by having one token to bet on the ecosystem, and another to transact in an easy to use way.
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