Miles Deutscher Profile picture
May 10, 2022 β€’ 18 tweets β€’ 6 min read β€’ Read on X
$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

Jun 11
I grew my X account to 600k+ in 4 years.

If I had to start again from 0 today, this is the exact 16-step plan I’d follow.

🧡: My ultimate X growth guide.πŸ‘‡
1. Pick a niche and go all in.

If you want to stand out and build authority, you first need to become and expert in, and own, one specific angle - as opposed to becoming another generalist.

I chose DeFi as my initial area of focus when I began creating content.

Allocating all your resources to one niche is the most optimal way to ensure your content stands out, which in turn will reach a wider audience over time as you expand.
2. Post consistently.

More is better (as long as you can maintain a good quality standard).

Even during the '22 bear market, I was posting threads daily at one point.

The X algorithm rewards consistency.
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Jun 10
I don’t understand why people still aren't using AI for trading.

It’s a cheat code.

🧡: 5 powerful AI tools to trade smarter in 2025.πŸ‘‡
1. @HeyAnonai HUD

One of my favorite crypto-specific AI trading tools is the new ANON HUD.

You can think of this tool as your personal crypto trading assistant.

I'll be doing a full breakdown of this tool later this week, but to summarise, the HUD has two key components.
The first is the on-chain overlay.

With the on-chain overlay, you can see:

β€’ When/If KOLs sold
β€’ Top holders & first 100 buyers
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β€’ Smart money activity

This information is color-coded and integrated into your chart for easy analysis. Image
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Jun 9
I trained an AI model using ChatGPT to reveal exactly when "alt season" begins.

The results shocked me..

It combines backtested data based on past cycles + recent changes to market dynamics.

🧡: I present - "Alt Season 3.0" (full framework explained below).πŸ‘‡ Image
Before we dig in, we need to address the reason why we haven't experienced a classic "alt season" yet this cycle.

The market dynamics are fundamentally different now, and this is reflected in the final model.

There are 3 major reasons.
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In 2020-2021, we experienced record money printing, with stimulus checks flowing and retail flush with cash.

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This fundamentally changes how "alt seasons" or periods of "risk on" look.
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May 18
It's going to be another massive week for crypto.

To help you prepare, I compiled the top 10 alpha tweets I bookmarked over the past few days.πŸ‘‡
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2. When $ETH shows strength, so do altcoins.
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May 14
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If you don’t know how to trade, now is the best time in history to learn with AI.

ChatGPT's new o3 model can analyse charts in seconds.

🧡: How to use it to trade smarter, faster, and with real conviction.πŸ‘‡
o3s' new image recognition capabilities make it the perfect tool for understanding technical analysis.

This thread will be a basic 4-step breakdown of using AI as a "Technical Analysis" learning buddy.

Once you master the basics, I will break down more advanced strategies in future threads.
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Identifying support and resistance is the foundation of any trading strategy.

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May 12
I quit doom-scrolling CT.

Now I use Grok 3 as my crypto research assistant to find crypto alpha.

It's BETTER than ChatGPT for real-time research.

🧡: 10 Grok prompts I use to spot trends, research projects, and find alt-coin gems.πŸ‘‡
ChatGPT is great for general prompts.

But Grok really shines on the live research side due to its X integration.

Here are 10 of my favourite prompts.

In this thread, I will break them down. Image
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@grok will scan all accounts posting about social metrics across tokens and give you a simple bullet-point list.

This is a crucial prompt as social engagement and token price are heavily correlated.Image
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