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Could LUNA, based on stable ecology, be in a death spiral?

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LUNA's current situation is like a giant door turning on small hinges.

原文作者：0xHamZ

原文编译：0x137，律动 BlockBeats

本文梳理自 DeFi 研究员 0xHamZ 在个人社交媒体平台上发布的观点，律动 BlockBeats 对其整理翻译如下：

LUNA 目前的情况就像是一扇在小铰链上转动的巨门，整个生态系统中有 100 亿美元的「热钱」，但每日掉期上限却只有 1 亿美元，那在最坏的情况下会发生什么？

Terra is a decentralized blockchain designed for algorithmic staboins, with the entire ecosystem running between UST, a staboin pegged 1:1 to the US dollar, and LUNA, a governance Token. LUNA's valuation is actually the present value of the costs of using UST over time. UST does not have collateral as endorsement at all, and only achieves the target of linkage through incentive measures. If you want to forge new UST, you must destroy the corresponding number of LUNA.

Recently, we saw a parabolic increase in UST popularity, which was accompanied by a significant decrease in the circulating supply of LUNA, which destroyed nearly 5% within a month.

It is worth noting that 90% of UST popularity came from deposit and loan services on Anchor (Terra's money market platform), because Anchor "guaranteed" 20% OF APY, which is extremely competitive with other stablecoin yield farming opportunities on the Convex platform, Who doesn't want a "guaranteed" 20% return on their stablecoin?

Another key to UST growth was the Degenbox farming strategy on the Abracadabra platform, which added 1.4 billion UST and was immediately "sold out".

The savings income of Anchor platform users is mainly composed of two parts, one is the loan interest rate charged by the platform to borrowers, the other is the pledge reward (mainly LUNA) generated by the collateral deposited by borrowers. During most of 2021, Anchor platform almost paid users to lend UST, which would drive borrowers to lend more UST, meaning that more LUNA would be destroyed and its price would be correspondingly raised.

Now, the cost of borrowing UST on Anchor is almost zero. This is great for LUNA, as the use of UST triggers LUNA's destruction.

However, the current savings account APY of Anchor platform keeps depleting the agreement's own savings, so Anchor needs to find ways to reduce its deposit interest rate or find new ways to encourage more borrowing.

However, before Anchor adjusts deposit and loan interest rates, depositors only have a guarantee period of 80 days at present.

但改变存款利率可能会使资金迁移到其他公链的生态。首先，出售 UST 意味着新的 LUNA 需要被铸造，导致 LUNA 的价格出现下降。在这个过程中，一些借款人的抵押品会被清算，那么协议向储蓄用户支付 APY 的来源也就减少了。

When borrowers lend out UST, they need to deposit bLUNA generated by LIDO pledge LUNA. Since the link between the two is not very reliable, the ratio of bLUNA to LUNA becomes important. Last May, for example, you could swap 100 LUNA for 110 bLUNA and destroy them in about three weeks to receive 110 LUNA.

And given Anchor's leverage and maximum LTV threshold, its ecosystem is at great risk when LUNA drops to $55 and triggers unwinding.

Terra 生态每天只有 1 亿美元的 UST/LUNA 掉期，上限为 0.5%，当发生更大规模的赎回时，UST 的点差就会指数式地增长。在去年 5 月时，有 8000 万的 LUNA/UST 在高峰期平仓，超过了赎回上限，导致点差直接飙升到 7～8%，在这种情况下，UST 的挂钩实际上已经被打破了。

当 UST 跌破挂钩时，会产生 2 种套利机会：

• 在 0.94 美元时买入，在 1 美元时卖出，套利 6%

• 以 0.94 美元买入 UST，转换为 1 枚 LUNA，将 LUNA 卖出为 USDC，并重复操作

Once the hooks fail, the entire ecosystem reflexives. If LUNA falls to mid-high levels around $50, a flood of liquidations and withdrawals could push LUNA further down to $35. At this time, LUNA's market value may be significantly lower than that of UST, forming a vicious cast pin cycle.

To reinforce this idea, we can analyze the LUNA/UST market volatility ratio. Right now, the correlation between LUNA and UST's market cap is just 0.8 (very volatile)!