Cardano creator Charles Hoskinson recently shared a message as reported by Coinquora that alleges the cause of the price crash of Terra (LUNA) and stablecoin UST.
The Luna crash has also affected the market as it has generally been a bad week for Bitcoins and Altcoins like Solana, FTM, Bobcoin, Polkadot, etc.
According to a message sent to Hoskinson by a person named Anna, the event is a well-executed technique that capitalized on Terraform Labs CEO Do Kwon’s alleged naivety and Anchor being an alleged Ponzi scheme.
The scheme involved crypto investment management firms Blackrock and Citadel, whom the person Anna claimed to have borrowed 100,000 bitcoins from Gemini. After receiving the said amount, these companies were claimed to have converted 25,000 bitcoins into UST. They then contacted Do Kwon to sell their bitcoins at a discount which they did and dumped all the UST received and this led to low liquidity in the token.
On the other hand, Do Kwon finally spoke up about the details of the rumored recovery plan for TerraUSD’s (UST) de-pegging. In a series of tweets, he proposed to increase “basepool'' from 50M to 100M SDR and decrease
``PoolRecoveryBlock” from 36 to 18. Consequently, this move will raise the minting capacity from $293M to “$1200M”. Alongside this proposal, Kwon also shared his thoughts on the possible cause of the de-pegging. He said that the stablecoin’s price stabilization mechanism is absorbing 10% of UST’s total supply and that the cost of absorbing huge amounts of stablecoins simultaneously “stretched out the on-chain swap spread to 40%.”
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