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0xArmin 🌊 Profile picture
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May 9 • 4 tweets • 2 min read
The #crypto wars will diverge into 2 parallel paths-
1) the war for #stablecoin supremacy
2) the war for digital ownership supremacy
The first will be competing for ease and reliability of daily transactions. It will face competition and pressure from its #fiat counterparts.
The second will be competing for digital ownership use cases. And frankly, I don't even know what they will look like.
But if you believe in this thesis, it means that you will evaluate #L1 chains differently according to the use case they are more aligned towards.

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More from @0x_armin

0xArmin 🌊 Profile picture
May 11
#UST depeg explained. What started it, why the safety mechanisms failed and where we are rn.

Nuff said, let's dive in. 👇1/n
#UST is an algorithmic stablecoin. In other words, it is not meant to be backed by reserves. Instead, it uses an algorithm to maintain the peg.

We have talked about this mechanism in this thread.



Extra precautionary steps were also taken. 2/n
In April 2022, @stablekwon bought ~1.5B #BTC and 200 million worth of #AVAX as reserves.

The idea?

bloomberg.com/news/newslette…
3/n
Read 21 tweets
0xArmin 🌊 Profile picture
May 11
Now that I've a (very) small amount of following here, I thought it'll be only fair of me to disclose my #LUNA position.

I've liquidated around 90% of my LUNA positions at a price of $17.2 just a few hours earlier. This is at a loss of ~50% when I minted LUNA yesterday.

Why?1/n
This is the second day (or night, depending on where you are in the world) when the #UST dropped significantly in value.

Throughout the past 24 hours, Do Kwon has been very quiet. 2/n
My best guess (and some sources, see @crypto_rudd's detailed analysis: murrayrudd.substack.com/p/ust-depeg?s=w) is that the #Terra team is trying to raise money to support UST. 3/n
Read 7 tweets
0xArmin 🌊 Profile picture
May 10
#UST tanked like shit. #Terra is in a crisis. But do you know the initial plan for long-term #LUNA growth?

Here's part 2 of the breakdown on Terra Luna whitepaper. 10x your #crypto understanding in 5 minutes.

Let's dive in. 🧶 1/n
In our last breakdown, we talked about how maintaining #stablecoins liquidity and stablecoins peg are key to preserving global purchasing power.

We have discussed the magic mechanisms that preserve liquidity and peg. However, we stopped at a key problem. 2/n
Short term volatility of #UST is now transferred to long term volatility of #LUNA!

We then hinted at a math sorcery that will preserve LUNA's long term stability.

But before we dive into details of math sorcery, we need to talk about something else. 3/n
Read 20 tweets
0xArmin 🌊 Profile picture
May 9
This is centralisation, but centralisation is not inherently bad in itself.

The summary: @LFG_org puts 1.5B in #BTC and #UST into hands of traders. Why?

If UST << 1 UST, sell the BTC to buy UST (push up UST price).
If UST >> 1 UST, use UST to buy BTC (push down UST price).
What’s the controversy about?

This decision was decided on by 7 people (@KanavKariya, @nickplatias, @madcapslaugh, @Remi_Tetot, @TaiPanich_, @ZeMariaMacedo, @stablekwon).

Not exactly decentralisation.

But I don’t think we should make a big fuss. Why?
Market conditions have been very volatile (read: shitty). In times of uncertainty, having a small group making snap decisions helps with execution speed.

And more importantly, there is a clear proposal for decentralised solutions down the road.

agora.terra.money/t/bitcoin-rese…
Read 5 tweets

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