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Jan 30 • 4 tweets • 2 min read
1/ One topic that hasn't received enough attention during the $UST crash: Terra's Market Module Mechanism and its implementation of $UST <> $LUNA burn and mint functionality. 🤔
2/ A few months ago, we shed light on the market module mechanism and its performance during the crash in the following thread, 🔍⬇️
3/ Starting tomorrow, we're sharing the results of our research on the $UST depeg event and exploring possible recovery strategies. 💪
4/ The future of the #crypto industry lies in algorithmic stablecoins, gold mine waiting to be tapped.

We believe it's possible to get $UST back to its $1 peg, and this presents the perfect opportunity to test our ideas. Stay tuned for updates! 🚀 #USTcrash #Terra #Stablecoins"

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More from @AstroTechLabs

AstroTech Labs Profile picture
Feb 1
1/ $UST Depeg Report 📢
📈 Its time to get to the bottom of the $UST crash!🔎
We've simulated Terra's Market Module during the May 22 crash in both SDR and USD denominations to understand the design faults.
Let's dive in! ⬇️
2/ Simulated Market Module (SDR)
📊 Check out this graphic to see how the $UST <> $Luna virtual pool - which facilitated burn/mint swaps - performed during the crash, with pool balances and expected profit % per trade denominated in SDR
3/ Simulated Market Module (USD)
💵 Converting the SDR denomination to USD based on $UST's actual dollar price, the following graphic shows the approximate P&L %s for each market swap.
Read 9 tweets
AstroTech Labs Profile picture
Sep 16, 2022
1/ #Terra Classic : A ponzi or a mechanism design failure?
Terra Classic was a use-case-specific Cosmos blockchain designed to create a market between #LUNA and #Terra stables, each coin assumed to be at price pegged to the denominated currency, eq, US dollars in case of #UST Image
2/ #Terra's market module was designed to do this via a constant product market-making algorithm, where,

base pool = pool_size * 2
terra pool = base_pool + terra_delta

where terra delta tracked the total net #terra coins (denominated in SDR) swapped for #Luna
3/ Since continuous one-directional swaps will lead to high terra delta resulting in pool imbalance and high spreads, the delta was replenished at the end of every block by subtracting the regression amount (terra_delta / pool_recovery_period) from it,
Read 11 tweets

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