Will LUNA burn the supply that was minted for the last 4 days?

ScamViruS

hero member

Activity: 1750

Merit: 720

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This is the main reason why Luna's supply is increasing. And if it continues like this, you can probably imagine how bad it will be. There is only one way for this team to normalize everything and that is to take UST to the previous price which means 1 usd. And stabilizing the UST 1 usd now seems almost impossible unless big investors come.

Quote

Example
If 1 UST is trading at .99 USD, users can buy 1 UST for .99 USD. Users then utilize Terra Station’s market swap function to trade 1 UST for 1 USD of Luna. The swap burns 1 UST and mints 1 USD of Luna. Users profit .01 UST from the swap. This arbitrage continues, and UST is burned to mint Luna until the price of UST rises back to 1 USD.

Source: https://docs.terra.money/docs/learn/protocol.html

fenican

hero member

Activity: 1394

Merit: 505

I think there are provisions to burn the supply if demand for UST is too high and UST soars past $1 but I'd say there's a snowball's chance in hell of that happening. More likely, the algorithm just keeps printing more LUNA to try to prop up UST which is, I think, a futile exercise now. There's no capitalization left to milk out of LUNA. It's a dead coin. The only scenario I can think of is perhaps the developer manages to convince the community that UST has real collateral behind it but who is going to throw billions of dollars of real money at a coin trading at half its peg?

disciplined

newbie

Activity: 18

Merit: 0

There were 343M LUNA on May 8th. Now, it's 10 times more than that.

If the team manages to recover LUNA to its level where it was a week ago, the price will be around $8 unless they burn the amount that was minted during this "incident".

Has anyone read anywhere where they said they're going to burn them later? (or it's not possible as the minting was done to balance out the UST price?)

Topic: Will LUNA burn the supply that was minted for the last 4 days? (Read 43 times)