LogFAQs > #965032717

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Topic	Crypto already going back up?
2Pacavelli 05/14/22 2:20:13 PM #58:	DarkRoast posted... Terra wasn't really a bug in as much as it was a pretty obvious flaw. The tldr is that Luna depended on UST being pegged to the dollar, but UST didn't actually have an underlying value backing, instead using "complex algorithms" which turned out to be releasing more Luna coins. The problem is that the more Luna coins you make, the less value they have, which also worsens UST's value. Ultimately it becomes a self-perpetuating death spiral. They initially tried to peg UST with bitcoins but that didn't work, so they made more Luna. Yah that's why I stay away from those "algorithmic" stable coins. I remember something similar happening on a small level with BDollar and BDO. I guess Terra was the biggest System that this happened with. Is Maker- DAI potentially subject to the same exploit? <cite>2Pacavelli posted [p:965032717] in Crypto alr... [t:80019280]...</cite> <quote>DarkRoast posted... </cite> <quote>Terra wasn't really a bug in as much as it was a pretty obvious flaw. The tldr is that Luna depended on UST being pegged to the dollar, but UST didn't actually have an underlying value backing, instead using "complex algorithms" which turned out to be releasing more Luna coins. The problem is that the more Luna coins you make, the less value they have, which also worsens UST's value. Ultimately it becomes a self-perpetuating death spiral. They initially tried to peg UST with bitcoins but that didn't work, so they made more Luna.</quote> Yah that's why I stay away from those "algorithmic" stable coins. I remember something similar happening on a small level with BDollar and BDO. I guess Terra was the biggest System that this happened with. Is Maker- DAI potentially subject to the same exploit? </quote> ... Copied to Clipboard!
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