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Terraform Labs Donates 12 Million LUNA to the Luna Foundation Guard

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Terraform Labs Donates 12 Million LUNA to the Luna Foundation Guard
  • Terraform Labs’ 12 million LUNA donation will be burnt and minted into $1.2 billion UST.
  • UST is a decentralized stablecoin that is closely associated with the LUNA token.
  • UST supply has gone up by 28% over the past two months.

Terraform Labs has announced a donation of 12 million LUNA to the Luna Foundation guard, according to transaction details from Mar. 11. The donation will be burnt and minted into $1.2 billion UST, pushing the reserve value up, according to Terraform Labs CEO Do Kwon.

Terraform Labs Donates 12 Million LUNA to the Luna Foundation Guard 15
Terraform Labs send 12 million Luna: Extraterrestrial Finder

Kwon stated that Terraform labs will continue to grow the reserves and also said that it would do so “until it becomes mathematically impossible for idiots to claim depeg risk for $UST.” UST is a decentralized stablecoin, unlike Tether and USD Coin.

If there is any confusion left at this point, we will keep growing reserves until it becomes mathematically impossible for idiots to claim depeg risk for $UST $UST is mighty https://t.co/6xCDPWJUTX

— Do Kwon 🌕 (@stablekwon) March 11, 2022

This is not the first time that the UST stablecoin has gotten a boost in its reserves. In late Feb. 2022, the LUNA token experienced a sharp increase in value as $1 billion in bitcoin was added to the reserve.

The burning of LUNA leads to the creation of more UST. The stablecoin is pegged on a 1:1 basis to the U.S. dollar. The ratio is maintained through the alteration of UST and LUNA supplies.

The additions to the reserve will help in the event of volatility in the market. It acts as a reserve in the same way that the holding of foreign reserves by central banks do.

Terraform Labs’ LUNA token has been doing well in the market, but it’s not all going perfect. The SEC has issued a subpoena to the firm and CEO Do Kwon, which was done in public at a conference in New York. The order had to do with potential securities violations.

Stablecoin Market, One To Watch for Regulation

Amid all the subpoena issuances and general stablecoin development, regulators are beginning to take greater note of the stablecoin market. The fear is that they might in some way impinge on the sovereignty of national currencies.

The United States, in particular, is looking at stablecoin regulation. It will be a challenging task to create broad regulation, but with President Biden’s recent executive order, governmental agencies may just have the power.

Decentralized stablecoins used to be risk-on assets during drawdowns – rotation from decentralized to centralized stablecoins due to peg risks. Stark difference now with stablecoins like UST seen as safe-havens. Crypto is down 25% while UST supply is up 28% over the past 60 days pic.twitter.com/BL3mVoLvqF

— Anjan Vinod (@anjan_vinod) February 26, 2022

How that power translates into regulation remains to be seen. As the market undergoes some heavy volatility, market investors are holding on to an increasing amount of stablecoins, so regulators may step in quicker than expected.

Countries are also focusing on their Central Bank Digital Currencies (CBDCs), which see some competition from stablecoins. In any case, 2022 appears to be a year that will see a flood of regulatory actions, good or bad. Stablecoins will certainly be at the center of these changes.

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Ethereum

CZ Declines Suggestion to Take Over from Do Kwon as Head of Terra (LUNA) and Bail out UST in Recent Reddit AMA

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CZ Declines Suggestion to Take Over from Do Kwon as Head of Terra (LUNA) and Bail out UST in Recent Reddit AMA

Summary:

  • In a recent AMA, Binance CEO was asked whether he would consider taking over from Do Kwon at LUNA and bailing out UST.
  • CZ responded by stating he was humbled by the request, but such a scenario was unlikely given that he is ‘pretty busy already.’
  • CZ also clarified that the exact details of a possible LUNA airdrop after the Terra hardfork would be worked out after an official consensus.

Yesterday, May 21st, CZ held an AMA (Ask Me Anything) session on the r/Cryptocurrency subreddit page.

Reddit AMA starting soon. Ask your questions there.https://t.co/gIcMstB6qf pic.twitter.com/wFzAvK01Pp

— CZ 🔶 Binance (@cz_binance) May 21, 2022

For one hour, the CEO of Binance answered various questions spanning different topics in the crypto-verse, such as crypto adoption, the future of the Binance Smart Chain, and the recent events surrounding Terra (LUNA) and TerraUSD (UST).

CZ Declines Offer to Take Over from Do Kwon and Bailout UST

With respect to LUNA and UST, one community member known as u/emptystats asked CZ whether he would consider bailing out UST and taking over from Do Kwon as the head of Terra (LUNA).

According to u/emptystats, all CZ had to do was invest $3 to 6 billion to partially collateralize the remaining 10 billion UST. In return, Binance would get a significant allocation of the new LUNA tokens after the planned hardfork. Furthermore, there would be an additional mechanism whereby to redeem UST, users would have to buy and unlock BNB for three to seven years.

u/emptystats concluded that such an act from CZ would make him the most beloved man in the crypto space, and he ‘would likely make money too with BNB forced to be bought and locked.’

In his response, CZ stated that he was humbled by the request, but such a scenario was unlikely given how busy he is already. He said:

I am humbled by such a request. Thanks for the trust in me. But short answer is: unlikely.

I am pretty busy already, and algo stable coins is not my speciality. We should each do what we do best. I hope the community eventually settle on a good solution, and we will be here to support it.

Exact Details of the Pending LUNA Airdrop Will Be Worked Out

Concerning the possible hardfork of Terra into Terra Classic (LUNC) and a new Terra (LUNA) chain, CZ was asked whether Binance will distribute the new tokens according to individual user balances of the old tokens during the snapshot.

In his answer, CZ clarified that Binance ‘works hard to ensure users that hold coins/tokens on our exchange can receive airdrops intended for holders.’ He also added that ‘the exact details will be worked out after there is an official consensus on what the Terra team plans to do.’

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LUNA, UST Investors Can’t Catch a Break as Scammers Are Now Posting Fake Terra Community Proposals

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LUNA, UST Investors Can’t Catch a Break as Scammers Are Now Posting Fake Terra Community Proposals

Summary:

  • Malicious actors have been purchasing LUNA and posting fake proposals on Terra Station with phishing sites.
  • Terra has also witnessed an increment in spam proposals as the ‘cheapness’ of LUNA makes it economically easier.
  • The team at Terra has now added an allowlist for new proposals in the ecosystem.
  • The Terra community continues to vote on proposal 1623 to fork the chain with 66.3% for the idea.

LUNA and UST investors cannot seem to catch a break as malicious actors have been capitalizing on the recent events surrounding both digital assets to post fake proposals on Terra Station, with additional links to phishing sites.

Furthermore, the fake proposals claim to lead users to a preview of Terra 2.0 and Dapps launched by the team at Terra, while in reality, they are out to steal from the community.

2/ In addition, we have also seen a rapid increase in spam proposals as the discount on $LUNA made it economically cheap to post anything one desired. pic.twitter.com/dd524u8ndk

— Terra 🌍 Powered by LUNA 🌕 (@terra_money) May 20, 2022

The Cheap Value of LUNA Makes it Easier to Purchase Enough Coins to Submit Fake Proposals.

According to the team at Terra, the significant low price of Terra (LUNA) has made it possible for scammers to purchase vast amounts of the digital asset to carry out their phishing attacks.

New Terra Proposals To be Added to an Allowlist

Consequently, the team at Terra will now add proposals to an allowlist as they try to find a more sustainable solution to the situation. The Terra team also clarified that their end goal is not to censor viable proposals but to protect users from scams. They said:

Our goal is not to censor viable proposals, but rather to protect users from scams & ensure an excellent user experience. For those who would like to view all proposals, including potential scams/spam, simply click the “Show all” button on the “Governance” page on Station.

IMPORTANT. Clicking on the “Show all” button may reveal potential scam proposals. Please beware of these types of posts to keep your funds safe.

Votes for Terra Proposal 1623 Decreases to 66.31%

To note is that the Terra Community is currently voting on proposal 1623, which is geared towards forking the chain into Terra Classic (LUNC) and a new chain of Terra (LUNA).

Mid-last week, 90% of the Terra community were for the proposal, with Do Kwon adding three quick amendments by Friday, May 20th. However, a glance at the ongoing voting on Terra Station reveals that only 66.31% of the votes cast are now for the modified proposal.

LUNA, UST Investors Can't Catch a Break as Scammers Are Now Posting Fake Terra Community Proposals 16
Progress of Terra Proposal 1623 with three days left to vote. Source, station.terra.money/proposal/1623

At the time of writing, a total of 252.745 million votes have been cast, with 167.606 million for proposal 1623. The vote has already passed the minimum 50% threshold needed to sail through. Therefore, it can be concluded that the Terra Community will go along with the proposal to fork the chain despite there being three more days of voting left.

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Crypto is Worth Nothing and Based on Nothing, Says ECB President Lagarde

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Crypto is Worth Nothing and Based on Nothing, Says ECB President Lagarde

Quick take:

  • European Central Bank President, Christine Lagarde, has said cryptocurrencies are worth nothing and based on nothing.
  • She added that cryptocurrencies do not have an underlying asset to act as an anchor of safety.
  • ECB President Lagarde said that a digital Euro would be a better store of value than cryptocurrencies.
  • The EU Commission on a digital euro (CBDC) is still accepting consultations from experts on the topic.

Christine Lagarde, the European Central Bank President, has said that cryptocurrencies are based on nothing and should be regulated to protect people from the possibility of speculating over them with their life savings.

Ms. Lagarde made the comments during a Dutch television discussion where she also added that digital assets are not backed by anything as an anchor. Her exact statements on cryptocurrencies were as follows:

[I’m concerned about people] who have no understanding of the risks, who will lose it all and who will be terribly disappointed, which is why I believe that that should be regulated.

My very humble assessment is that it is worth nothing, it is based on nothing, there is no underlying asset to act as an anchor of safety.

A Digital Euro Would be a Safer Bet

Ms. Lagarde also admitted that she does not hold any cryptocurrencies because she wants to practice what she preaches. She, however, was optimistic about the prospects of a Digital Euro being a safer alternative. She said:

The day when we have the central bank digital currency out, any digital euro, I will guarantee — so the central bank will behind it and I think it’s vastly different than many of those things.

EU Commission on a Digital Euro Is Still Accepting Comments from Experts on the Topic

Concerning the feasibility of a Digital Euro, the EU Commission on a Central Bank Digital Currency within the region is still accepting comments from industry experts on the topic.

Patrick Hansen highlighted this fact through the following Tweet. Mr. Hansen is a crypto venture advisor at Presight Capital and has on numerous occasions provided valuable insights on the status of digital asset regulation in Europe.

If you don’t share Christine Lagarde’s opinion that the digital euro is the way forward, you still have three weeks to raise your concerns in the EU commission CBDC consultation – deadline June 14. https://t.co/p5eMF5ySo5

— Patrick Hansen (@paddi_hansen) May 22, 2022

The deadline to submit statements on the topic of a Digital Euro is June 14th, and the following individuals and entities are encouraged to submit their opinion on the matter.

Payment industry specialists, payment service providers (including credit institutions, payment and e-money institutions), payment infrastructure providers, developers of payment solutions, merchants, merchant associations, consumer associations, retail payments regulators, and supervisors, anti-money laundering (AML) supervisors, Financial Intelligence Units, and other relevant authorities and experts.

Concerning the object of the consultation for a digital euro, the EU Commission tasked with the process explains that it is meant to ‘ to collect further information on expected impacts on key industries (financial intermediation, payment services, merchants), users (consumer associations, retailers’ associations), chambers of commerce and other stakeholders in international trade.’

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