Anyone here know what mechanism triggers to keep UST peg

Question

Anyone here know what mechanism triggers to keep UST peg

in case LUNA drops ~70%? I know that LUNA burning/minting is what keeps UST peg, but I’m wondering what happens in an extreme market event 🤔

#blockchain #cryptocurrency #english #luna

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06.01.2022

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Eri T Автор вопроса

R K 🌖
So LUNA has held with extreme markets very well, w...

Thank you!

0

07.01.2022

R K 🌖 · Accepted Answer

So LUNA has held with extreme markets very well, where the peg has done very well, with the -75% drop we saw in May. Was still a bad black swan, but that drop led to several changes in how Anchor approached liquidations and so on, Since then in reasonably big dips, the peg has been held to a T. And this was when LUNA was a much smaller market cap - it is likely far better protected witht his market cap, and the anchor liquidation changes made after the May market crash. However - the next step is creating BTC and forex reserves, and I understand that is something we might hear about this month. With further reserve stability, we should be more than safe. Not sure of specifically what and how, but we should know before the month ends. :)

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Anyone here know what mechanism triggers to keep UST peg

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