This is a historic moment for Terra. The peg will be restored, it's just a matter of time, and trust will be restored as investors see the builders making the necessary changes that were brought into the spotlight during this crises.
Ultimately, it will prove to be a gigantic stress test that exposed vulnerabilities in the system. In the end, we will be grateful, because it forced us to address these issues and build back stronger. If we want to go higher, we need a stronger foundation.
We have seen a lot in the last 24 hours, and the lessons we have learned are priceless. As the dust settles, we will begin sharing what we have seen from the front lines and having the discussions about what changes need to be made to strengthen the system.
Peg Update: The $UST peg broke on-chain a few hours ago. At this time, we saw our peg defender bots wake up and start to see some activity. They are not tied into our dashboard, on a different contract, but you can see them here: finder.terra.money/mainnet/tx/2B0…
However, we are running into some issues arbing UST back to peg. Right now the main issue seems to be the spread. Currently, the spread is so high that it is not profitable to arb UST back to peg.
Yesterday there was a brief depegging of $UST on Curve and multiple centralized exchanges i.e. Binance, Kucoin, and others...
White Whale is a DeFi protocol, we do not have a Binance account, and we do not have crosschain infrastructure to arb UST on Curve (which is on Ethereum), nor is it reasonable to expect us to have such things at this point.
Instead, we run arb bots that defend the peg on the L1. This means we arb the validator level, where Luna is actually burned or minted, against the on-chain DEX's. This is the peg's core. So long as UST holds peg on-chain all other chains and CEX's can arb it back from there.
Our product is arbitrage. We are distilling complex automated trading strategies down to a simple, user friendly process so you can benefit from them while simultaneously helping secure the ecosystem and make it more efficient. This is what we will deliver soon.
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In the meantime, we are laying a strong foundation for our tokenomics. By owning our liquidity pool from launch, we do not have to rely on LP emissions for liquidity. Instead, we are earning swap fees every day, which equates to constant buy pressure on the WHALE token.
In the coming days, we will open our gov staking. Rewards will be non-dilutive emissions. Meaning we will emit WHALE to gov stakers at a rate less than the growth of the Treasury. This is a way of distributing tokens to loyal WHALE stakers without dilution.