Thread by @DU09BTC

1/ Time to dispel the myths around #Terra / #Luna / #UST once & for all!

Is it decentralized? Is UST a stablecoin? Is it #SAFU?

What are the alternatives???

Are you with me?

Here's the thread you've been waiting for. 👇

2/ Before I debunk the most important myths about Terra, I suggest you check my earlier thread on this to understand the context better.

Ready? Let's start with myth number 1. 👇

https://twitter.com/DU09BTC/status/1504862614572179456?s=20&t=pdETsUU3Rc5zeTc93jrtDQ

3/ Myth number 1:

🚨 "Terra / Luna / UST is decentralized."

Verdict: FALSE ❌

I can explain, lets's look at the Terra / Luna network first and then UST. 👇

4/ Terra Luna is not decentralized unless 130 validators qualify as such (see below).

#ETH has millions of validators. Why does #Luna have ONLY 130 validators?

Having more would dilute profits made by said validators running the network.

Next UST. 👇

https://twitter.com/DU09BTC/status/1495715611502067712?s=20&t=Go_7vHVm_PQ-n7h16zVCKA

5/ UST is centrally controlled and managed. From minting to burning & USD peg management.

First, minting: Terra insiders & its Foundation minted all Luna for free (see tweet below).

They proceeded to use that to mint UST.

Next, burning. 👇

https://twitter.com/DU09BTC/status/1512023618703831042

6/ They burn the #Luna they minted for free to issue UST.

Then they swap #UST for anything else.

The more the Terra ecosystem grows, the more options they have to do so. Including, buying #Bitcoin.

See 4pool on Curve as an example.

Next. 👇

https://twitter.com/DU09BTC/status/1510326660335345669

7/ More Luna burnt = more UST + higher Luna price = more UST...

But what backs all this "new money"?

The "ecosystem" they say. Sounds familiar?

This new money, particularly $18 bil worth of UST has NO BACKING!

Time to talk about the UST peg. 👇

https://twitter.com/DU09BTC/status/1514195364877942784?s=20&t=Uq1h08fMgCkA84Oqg3McSA

8/ If UST has no backing, something will break right, RIGHT?

YES. The #UST peg to the dollar!!!

Most recently, in May 2022. It also broke in May 2021... weird.

OK, but it is not so bad, they have BTC to defend the peg, RIGHT?

About that... 👇

https://twitter.com/DU09BTC/status/1523163488297828353?s=20&t=Go_7vHVm_PQ-n7h16zVCKA

9/ This "decentralized" ecosystem had a meeting where "the Council" had "a vote" to defend the peg with a $1.5 bil Bitcoin/UST allocation.

This centralized peg management has nothing to do with decentralization.

It's actually a massive red flag. 👇

https://twitter.com/DU09BTC/status/1523569710566060032?s=20&t=Go_7vHVm_PQ-n7h16zVCKA

10/ Don't get lost in the details, red flags are everywhere.

The biggest is UST losing peg recently.

UST is prone to lose its peg to the USD due to its design!

How much money do they have left to keep the peg afloat, see pic?

Let's see next👇

11/ Today's values:

Peg defense reserve: $3 bil (they used $1.5 bil already)
Luna market cap: $20 bil
UST mcap: $18 bil

With Luna's mcap falling, do you see a problem?

The UST peg is about to collapse at this rate.

UST mcap > Luna mcap = 🤯

Next myth number 2. 👇

12/ Myth number 2:

🚨 "UST is a stablecoin."

Verdict: FALSE ❌

UST is actually Luna with a different label due to the mint/burn mechanism

Expect to see UST lose peg often due to that, particularly when UST mcap > Luna mcap.

Or well before that, like now (see pic)

Moreso 👇

13/ UST is a stablecoin in name & works well in a bull market

As soon as a bear market starts, things collapse around it since it has no collateral to back it

They do have some #BTC, but not $18 bil worth of it

Do you get what I'm saying?

Next myth 👇

https://twitter.com/DU09BTC/status/1516653128841576451?s=20&t=9X1KA1_HSmQzj8v3RMoXvA

14/ Myth no. 3:

🚨 "Do Kwon is the next Steve Jobs of crypto."

Verdict: FALSE ❌

Terra community has turned into a cult with members now called Lunatics & Do Kwon their leader.

They reject anything that is not part of their echo chamber.

Moreso 👇

https://twitter.com/DU09BTC/status/1516356179571748864?s=20&t=9X1KA1_HSmQzj8v3RMoXvA

15/ Lunatics even created a meme that shows how UST is a centralized mess led by their cult leader.

"Mfer we are the peg". This was written by their leader and Lunatics have it as their avatars now.

Let me translate this logo for you. 👇

16/ "we are the peg" = everyone involved in Terra has to defend UST peg.

The UST backing is the Terra "ecosystem". 🤣

Do you recall that somewhere? See tweet #7.

This cult is really dangerous, particularly when it is about your money.

Always ask, who benefits? 👇

17/ Myth no. 4:

🚨 "It is safe to keep my money in UST. Terra is #SAFU!"

Verdict: FALSE ❌

While Anchor's UST yield is tempting, don't fall for it! The risks are huge in a bear market.

The biggest being a depeg event like now & liquidations.

What are the alternatives? 👇

18/ As the narrative around #Terra / #Luna / #UST is slowly crumbling under the bear market, what are the alternatives?

See this thread on stables that I did to start with.

But there is more. 👇

https://twitter.com/DU09BTC/status/1514996987741065223?s=20&t=qiAJ6Q9ParFu1eFNFPjVrA

19/ If you want a truly decentralized stablecoin, look into #LUSD (based on ETH).

There are also more exotic stables similar to the Luna/UST model (copy/pasted), like #USN & #USDD.

USDD promise 30% returns. But play safe!

It is not without risk! 👇

https://twitter.com/DU09BTC/status/1518679760909574144?s=20&t=xzUwYIAzBq0zA2ZXz7o0NQ

20/ UST biggest risk is its inflated market cap, if USN or USNN also explode into a bubble, they will face similar challenges.

Current stable yields for these:

$USN 20%
$USDD 30%

I'd not touch UST right now even if it pays 18%.

Next 👇

21/ If you liked this thread, #retweet the first post to get more of this content in the future! 😍

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