Terra is a decentralized financial payment network that rebuilds the traditional payment stack on the blockchain. Luna is the reserve currency of the Terra platform. It has three core functions: i) mine Terra transactions through staking, ii) ensure the price stability of Terra stablecoins and iii) provide incentives for the platform’s blockchain validators.
Sun criticized aspects in which Earth failed with its commercial offer for UST, but clarified that his stablecoin a cryptocurrency with extremely low volatility, sometimes used as a means of portfolio diversification. Examples include gold-backed cryptocurrency or fiat-pegged cryptocurrency. USDD is not subject to the same vulnerabilities, so they are making efforts to ensure its proper functioning.
- Justin Sun presented some reflections on what has happened to Earth.
- He stressed the importance of offering guarantees and security the term securities refers to a fungible and tradable financial instrument that carries a type of monetary value. in this type of offer.
- He criticized high-performance systems without real foundations.
- He assured that his currency currency is a medium of exchange that defines value. USDD solves the problems you presented UST.
Justin Sun, founder and main figure behind the project Blockchain a distributed ledger system. A sequence of blocks, or units of digital information, stored consecutively in a public database. The basis for cryptocurrencies. TRON, recently presented some reflections after what happened with the ecosystem of the Earth, especially highlighting the need to offer a lot of guarantees and assurances when you are behind the creation of a stablecoin that works algorithmically, and that high returns as an incentive are not something sustainable in the long a situation where you buy a cryptocurrency with the expectation of selling it at a higher price for profit later. term.
Sun’s comments and reflections came to place in a new publication in hisblog oficialwhere the eccentric and controversial representative of TRON claimed to have learned some important lessons after the fall of Terra.
UST as inspiration for USDD
Among Sun’s revelations, he confessed that he was inspired by UST to launch the stablecoin USDD, especially because of the exponential growth seen in the flagship currency of the Earth, which attracted a large number of investors interested in liquidity how easily a cryptocurrency can be bought and sold without impacting the overall market price. programs through certain platforms. DeFi a movement encouraging alternatives to traditional, centralized forms of financial services. within its ecosystem.
In this regard and after what happened, Sun considered that the algorithmic approach with which it was burning destroying a certain number of digital coins to reduce their issue. This method is used to fight inflation and increase the value of cryptocurrency. All token burning transactions are recorded in the blockchain as a transaction. Therefore, anyone can verify that the coins were destroyed. LUNA to maintain the parity of UST con el dólar era arriesgado, cosa que también representa un peligro para su stablecoin tras permitir a los usuarios destruir el equivalente a USD $1 en TRX to mint 1 USDD.
According to Sun, the risk to Earth was that UST was backed by MOON, which was only 15% supported by reserves in BTC:
“The reserve only reached USD $3 billion in BTC at its peak, barely enough to guarantee the supply of almost 19 billion UST. During the bank run of the last few weeks, the Luna Foundation’s guarantee barely made a dent in the selling pressure that UST registered.”
But with USDD, Sun assured that the TRON DAO decentralized autonomous organization, system of rules that define how a decentralized organization should operate and which actions it should take. Reserve dispone de una combinación de criptomonedas de alta calidad y baja volatilidad, entre los cuales se encuentra USDT, USDC, BTC and TRX para respaldar a su stablecoin, con una tasa de garantía dentro de un rango del 180% – 200%. También agregó que se esmeran en garantizar total transparencia en las operaciones realizadas, justamente para que no haya manejos opacos que atenten contra la confianza del proyecto.
High yields are not sustainable
Another aspect that Sun made reference to was the high fixed yields they offered with UST, which ranged over 20% and qualified as not at all sustainable.
In contrast, the manager of TRON indicated that with USDD There is a different process, since in the first phase of the replanting process, a maximum of 2 billion in USDD minable, at which point users will be able to earn 30% APY for staking participation in a proof-of-stake (PoS) system to put your tokens in to serve as a validator to the blockchain and receive rewards. the coin a coin can refer to a cryptocurrency that can operate independently or to a single unit of such cryptocurrency. in question.
From the next phase onwards there are no limits on supply. But users who participate in staking systems must hold their assets for a year to receive high yields, while those who opt for lower lapses receive lower rates. Sun did not specify percentages in these cases.
However, here he emphasized the Reserve TRON DAO which aims to hold about $2 billion in assets as collateral, with plans to scale up to $10 billion in the long term.
A very unfortunate case
Beyond Sun’s reflections, what is certain is that what happened with Earth leaves valuable lessons for all those who operate with cryptocurrencies, the main one being to review well the projects of interest before allocating capital capital is most commonly defined as the large sum of money you would use to invest. to derive profits.
Critics and analysts with technical knowledge pointed out at the time that the bet of Earth was very risky, especially since its algorithmically modeled stablecoin could be susceptible to such a crash if things didn’t go well enough.
Despite the fact that the Earth tried to remedy what had happened, the magnitude of the catastrophe led to the relaunch of the network a network refers to all nodes in the operation of a blockchain at any given moment in time. and the implementation of a compensation plan so that those affected could recover part of what had been lost. However, the current state of the market an area or arena, online or offline, in which commercial dealings are conducted. and fears about the project have not allowed it to evolve favourably.
For now, we can only wait and see how the market will evolve in the coming days.
- Crypto market returns to the downside, but WAVES and TRON stand out with gains gains refer to an increase in value or profit. on June 1
- During Drastic Price Drop, Tether Announces Tron Chain Switch to Ethereum a decentralized open-source blockchain with smart contracts functionality. and Avalanche
- Justin Sun’s Tron DAO, bought 500 bitcoins in the fall, will back new USDD stablecoin
Source: CryptoPotato, Blog Justin Sun
Version by Angel Di Matteo / DiarioBitcoin
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