luna its bad?
I'm not 100% sure if/how it can be bad. It would introduce more volatility to luna, as that thread said. But it would mean luna supply is rather small and staking rewards are higher, so it should balance itself. Not sure how it could break the system
Don’t think it’s bad because UST is a Terra native stablecoin. Think of it as USD, just on Terra chain.
well why is it considered the riskiest 'stable' coin
Because of Anchor.. the danger or risk of it maintaing its 20% APY. Hence, why they decided to slowly reduce it over time to maintain supply.
so its only risk is the apy dropping due to sustainability?
Nope. UST is linked to Luna. So if Luna is no longer a strong narrative, what happens to the demand of UST?
Right, so just to clarify if luna shits the bed, so will ust? we are heavily relying on luna here? and yeah well if more people deposit that will effect the reserve wont it as more and more interest is given out
Nope. If Luna goes to hell, ppl might still sell into UST to hold and wait to buy back in. This maintains the eco. Unless, of cs, ppl sell off their Luna into USDC/USDT/other coins. Then that’ll ruin the eco. But pretty sure the team has their own reserves to initiate systems to maintain utility attraction.
Because* oops. My bad. Shortforms, haha.
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