I spent a few days in Miami getting to know my new sponsors Bitget. They flew all of the way from Singapore to meet with me and tell me all of the things that they are planning in the future. I'm really exited to see all of it roll out in the coming months. You can sign up and get up to a $3000 bonus by clicking here!Terra founder Do Kwan shocked the world when he announced that the Luna Foundation would acquire $10B in Bitcoin to back $UST and “open a new monetary era of the Bitcoin standard." As with every major crypto story, the community was polarized in their response. Bitcoin and Luna holders celebrated the choice while some crypto reporters and analysts raised legitimate concerns.Before I begin to unpack this story, I want to make it clear that I am not an expert on this subject or its ecosystem. I am simply providing the information available so that you can formulate your own opinion.How did Luna acquire $10B to buy Bitcoin in the first place (they also bought $AVAX, I’ll get to that too)? The funds came from Luna’s ICO and a unique burn/arbitrage mechanism dubbed “seigniorage." The split was 30% (former) and 70% (latter).Why would Luna buy Bitcoin in the first place? To create a superior stablecoin. Luna intends to use Bitcoin and Avalanche to stabilize the $UST peg. Critics have made the case that Luna’s decision-making is creating a heightened risk of collapse, self-reliance, and centralization. There have also been arguments that they have created inflationary pressure on the $LUNA coin. Basically, the foundation has leveraged its own profits to support its peg. It’s a unique solution to a very complicated problem.In defense of Luna’s decision-making, Do Kwan has extensively explained how the supply of Luna expands and contracts to the natural flow of demand. Also, Do Kwan decided to strategically add $AVAX to the $UST reserves because Anchor, which is responsible for 75% of $UST demand, has strong ties with $AVAX. Do Kwan has appeared on a number of podcasts in defense of Luna's stability, which are easy to find. The issue is that many of the critics have pointed out that there are important questions that have yet to be answered.If you are confused at this point, that’s okay. This is one of those crypto stories that becomes increasingly complicated as you dive deeper. Plus, the controversy is young, so much of what we know is still developing.What’s most important is that the problems surrounding Luna aren't far off from many of the challenges other popular stablecoins currently face. Stablecoins are proposing solutions to a difficult problem that governments have neglected since leaving the gold standard. Specifically, how do you create stable, reliable, decentralized money?The challenge becomes obvious when stablecoin backers are forced to decide between a fiat peg or a crypto peg. In the case of Luna, we are witnessing the latter play out in real time.As an investor, it probably makes sense to either pick a stablecoin you are comfortable with or spread your capital across a few of the most popular ones to be safe. I primarily use USDC.The only clear answer we have right now is that there is no “right” answer. Eventually, the free market will point us to the best option, but until then we have to use our best judgment. In This Issue:The Luna SagaBitcoin Thoughts And AnalysisIs Tesla Mining Bitcoin?OpenSea Adds Solana NFTsGoldman Expanding Into OTC ETHTrading Volume In India CollapsesMy Recommended Platforms And ToolsIF YOU HAVE ANY ISSUE WITH THE NEWSLETTER OR YOUR SUBSCRIPTION, PLEASE CONTACT: PREMIUMSUPPORT@GETREVUE.CO
The Wolf Den #475 - The Luna Saga
The Wolf Den #475 - The Luna Saga
The Wolf Den #475 - The Luna Saga
I spent a few days in Miami getting to know my new sponsors Bitget. They flew all of the way from Singapore to meet with me and tell me all of the things that they are planning in the future. I'm really exited to see all of it roll out in the coming months. You can sign up and get up to a $3000 bonus by clicking here!Terra founder Do Kwan shocked the world when he announced that the Luna Foundation would acquire $10B in Bitcoin to back $UST and “open a new monetary era of the Bitcoin standard." As with every major crypto story, the community was polarized in their response. Bitcoin and Luna holders celebrated the choice while some crypto reporters and analysts raised legitimate concerns.Before I begin to unpack this story, I want to make it clear that I am not an expert on this subject or its ecosystem. I am simply providing the information available so that you can formulate your own opinion.How did Luna acquire $10B to buy Bitcoin in the first place (they also bought $AVAX, I’ll get to that too)? The funds came from Luna’s ICO and a unique burn/arbitrage mechanism dubbed “seigniorage." The split was 30% (former) and 70% (latter).Why would Luna buy Bitcoin in the first place? To create a superior stablecoin. Luna intends to use Bitcoin and Avalanche to stabilize the $UST peg. Critics have made the case that Luna’s decision-making is creating a heightened risk of collapse, self-reliance, and centralization. There have also been arguments that they have created inflationary pressure on the $LUNA coin. Basically, the foundation has leveraged its own profits to support its peg. It’s a unique solution to a very complicated problem.In defense of Luna’s decision-making, Do Kwan has extensively explained how the supply of Luna expands and contracts to the natural flow of demand. Also, Do Kwan decided to strategically add $AVAX to the $UST reserves because Anchor, which is responsible for 75% of $UST demand, has strong ties with $AVAX. Do Kwan has appeared on a number of podcasts in defense of Luna's stability, which are easy to find. The issue is that many of the critics have pointed out that there are important questions that have yet to be answered.If you are confused at this point, that’s okay. This is one of those crypto stories that becomes increasingly complicated as you dive deeper. Plus, the controversy is young, so much of what we know is still developing.What’s most important is that the problems surrounding Luna aren't far off from many of the challenges other popular stablecoins currently face. Stablecoins are proposing solutions to a difficult problem that governments have neglected since leaving the gold standard. Specifically, how do you create stable, reliable, decentralized money?The challenge becomes obvious when stablecoin backers are forced to decide between a fiat peg or a crypto peg. In the case of Luna, we are witnessing the latter play out in real time.As an investor, it probably makes sense to either pick a stablecoin you are comfortable with or spread your capital across a few of the most popular ones to be safe. I primarily use USDC.The only clear answer we have right now is that there is no “right” answer. Eventually, the free market will point us to the best option, but until then we have to use our best judgment. In This Issue:The Luna SagaBitcoin Thoughts And AnalysisIs Tesla Mining Bitcoin?OpenSea Adds Solana NFTsGoldman Expanding Into OTC ETHTrading Volume In India CollapsesMy Recommended Platforms And ToolsIF YOU HAVE ANY ISSUE WITH THE NEWSLETTER OR YOUR SUBSCRIPTION, PLEASE CONTACT: PREMIUMSUPPORT@GETREVUE.CO