Miles Deutscher Profile picture
May 10 β€’ 18 tweets β€’ 6 min read
$UST's collapse is the biggest threat to crypto right now. It has massive ramifications across the entire industry.

Is this the end of $UST and $LUNA? Or simply a blip on the radar?

🧡: A thread on the $UST de peg and what it means for crypto. πŸ‘‡
2/ $UST has officially lost its $1 peg.

It's been a day of drama, with $UST hitting a low of $0.61 before bouncing back to the $0.90 region.

The entire crypto industry is glued to the charts, as it sends shockwaves through the entire industry. Image
3/ To understand why a de peg is possible, let's explore the different types of stablecoins.

$UST is a decentralised algorithmic stablecoin.

β€’ Algorithmic: Backed by an algorithm, not assets.
β€’ Fiat-backed: Backed by tangible assets (like $BUSD)
4/ Algorithmic stablecoins like $UST are valuable because they are:

β€’ Scalable, ideal for facilitating DeFi
β€’ Decentralised
β€’ Improved capital efficiency

Unfortunately this also creates risks, which can result in de pegging.
5/ $UST stabilises its peg by allowing:

β€’ You to redeem 1 $UST for $1 worth of $LUNA, or
β€’ 1 LUNA for its equivalent value in $UST.

To incentivise the arbs, $UST must possess true utility.
6/ What's its main utility? Anchor protocol.

The 19.5% yield on Anchor incentivised large amounts of liquidity, and is currently responsible for 51.8% of $UST's circulating supply.

7/ However, Anchor's dominance over $UST is also an issue, as it has lost 57.8% of its total TVL this week.

$UST leaves Anchor > Swapped for other assets > Sell pressure on $UST. Image
8/ Unfortunately this is a major issue for $LUNA.

β€’ When $UST is minted, the equivalent dollar value of $LUNA is burnt (great for $LUNA as it reduces the total supply).

But this also works the opposite way:

β€’ When $UST supply reduces, $LUNA is minted.
9/ If more $LUNA are minted, this increases the total supply - resulting in more tokens entering the market.

We can see that the total supply change is +25.3m in the last 24h.

Just one day has wiped out over a month worth of supply burn. Image
10/ As you can imagine, this is bad for the $LUNA price as more tokens are now circulating.

As a result, $LUNA has dropped 64% in just 4 days. Image
11/ But, even a 24m increase in supply isn't enough to warrant a 64% correction. However:

Emotions rule crypto. FUD and panic are usually stronger forces than any tangible baseline metric (at least in the short term).

Remember that crypto is a highly inefficient market.
12/ And this is exactly what happened to $UST.

1. Coordinated attack with the sole purpose of destroying the peg ($285m dumped on Curve by one party).

2. FUD starts spreading on Twitter

3. People panic out of $UST (shorters get aggressive)

4. Liquidation cascade
13/ Don't be fooled. There are big players that made obscene amounts of money from this sell event (likely at your expense).

There are also whales that are making millions riding the arb on the way up (peg is already at 0.90 from 0.61)

This is a true war of the bulls vs bears.
14/ But, Terra foundation had a plan for this. Over the last few months, they have been buying #bitcoin to use as a monetary reserve.

They bought almost $2b of $BTC. Why? To protect the peg during times of extreme stress (like we're seeing right now).
15/ As you can imagine, this isn't good for #Bitcoin as LFG could sell $BTC in order to get $UST back to peg.

16/ The market clearly hasn't responded well to this.

Even though $2b is small in the scheme of #Bitcoin's $600m market cap, it's still enough to induce panic.

Remember, a major catalyst for $BTC's last run was @stablekwon buying, so it makes sense that it works in reverse. Image
17/ As we know, alts are an extension of #Bitcoin. The combination of macro uncertainty + LFG has resulted in significant headwinds.

Many DeFi protocols have exposure to $UST. Failing to restore peg could have huge ramifications across the entire market.

18/ But there's hope.

@stablekwon says he has a plan. I have faith that they will fight to defend the $UST peg at all costs.

β€’ β€’ β€’

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More from @milesdeutscher

Dec 7
$PYR looks to be in a decent buy zone.

$3.03 has been a strong level historically.

As I’m investing with a longer time horizon (and not trading), this is a decent zone to start building a position imo.

This is my plan: Image
Note: The green line is arbitrary, it’s just an example to contextualise potential buy levels.

This could (and probably will) play out differently, but my levels remain the same.

If price dips below the $3.03 level, I’ll wait for a it to reclaim to buy with more size.
I like PYR fundamentally for a few reasons:

β€’ The team has shown resilience in the face of adversity, and a commitment to building and shipping quality products.

β€’ Strong strategic partnerships.

β€’ Offers exposure to multiple games and an NFT marketplace.
Read 5 tweets
Dec 1
Airdrops are one of the easiest ways to make thousands of dollars in crypto.

People made:
β€’ 6 figures on Uniswap
β€’ 5 figures on ENS
β€’ 4 figures on Aptos

But there are still many more great opportunities to come..

Here are 10 upcoming airdrops that I’m looking forward to.πŸ‘‡
Read 12 tweets
Nov 29
YouTube is one of the best platforms to find crypto alpha.

But 99% of people are using it wrong.

🧡: Here's how to PROPERLY leverage the YouTube algorithm to create a free crypto alpha machine. πŸ‘‡
In this thread, I'll break down 7 simple steps to use the YouTube algorithm to your advantage.

By the end, you'll have a start to finish blueprint of how to find and apply crypto alpha off YouTube.

Let's dive in. πŸ‘‡

You want to create a new account which is used for crypto ONLY.

It's likely that your current account is diluted with rubbish.

This is because YT feeds you content that it deems to be entertaining.

But entertaining β‰  productive.
Read 28 tweets
Nov 17
The FTX collapse is one of the biggest black swan events in crypto history.

It has already damaged the entire industry, but the ramifications run deeper than you may think.

🧡: How far will the FTX contagion spread? πŸ‘‡
In this mega thread, I'll cover:

β€’ The 5 sectors that have been damaged by FTX's collapse
β€’ The individual entities which have been most affected
β€’ How much further the contagion could spread
This last week has been one of the most devastating weeks in crypto history.

But the mutilation may not be over yet.

Let's run through the top 5 impacted sectors and the potential ramifications. πŸ‘‡
Read 41 tweets
Nov 16
Apple. Amazon. Google.

These companies are the pillars of modern society.

But there are Web3 protocols that could eat into their market share.

🧡: 5 crypto projects which could disrupt their Web2 counterparts. πŸ‘‡
In crypto, there are many projects which use decentralisation as a buzz word to make money.

But they don't actually solve a real world problem.

I'm always on the lookout for projects which genuinely improve existing web3 products via their use of blockchain.
Most of you know I'm a fan of projects like $ETH, $MATIC, $GNS etc.

But I want to take a different angle with this thread, and look at tokens which are blockchain-based alternatives to their web2 counterparts.

The projects listed in this thread are in no particular order.
Read 34 tweets
Nov 15
The FTX collapse has sent shockwaves throughout the entire crypto industry.

It has changed my perspective on crypto forever.

🧡: 10 lessons I’ve learnt that can help you avoid disaster in the future. πŸ‘‡

Re-evaluate your thesis on a regular basis.

For example, every month go through your portfolio and ask yourself:

A: Why am I holding this token?
B: If I wasn't holding, would I buy this token right now?
If you answered no to question B, then you should probably sell.

Remember, holding a token is the same as buying at that given moment (opportunity cost).
Read 17 tweets

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