(Deep analysis) Following the capital flow, we examined the mathematics law behind the Luna crypto crash

① Luna is UST’s sister cryptocurrency, and it is free to rise and fall.

② The system relies on traders burning or creating UST and Luna for profit to maintain its peg to the U.S. dollar.

The Creation Mechanism of UST and LUNA

Take a simple example: Alice has issued a token with a total supply of 100 million, and then sold one token to Bob at $10, therefore the total market cap of this token will be 100 million * $1 = $1 billion. What if Alice tells Bob that she wants to discount all his tokens to $100 million, will Bob be willing to buy them?

Terra plans to burn $4.5 Billion worth of Luna

UST, as part of Luna’s unrealized market value, is at a significant discount,

UST is not real money,

But UST looks like U.S.dollar.

It can also be converted to U.S. dollar at 1:1 exchange rate in small amounts.

LFG became the second largest Bitcoin Holder
Large Crypto Funds invested in Luna

Do Kwon moved on May 10, 2~4pm (UTC+8 BST, same below):

42350 Bitcoin in the address: bc1q9d4ywgfnd8h43da5tpcxcn6ajv590cg6d3tg6axemvljvt2k76zs50tv4q

and 12581 Bitcoin in the address: bc1qkhl4pt957urd8sleys3p00ua2h23nl3hghhtkyaatgzapj9kflhqar0jdv.

The above 55,000 BTC were transfered out from the Luna Foundation address, plus another 25,000 BTC claimed by Do Kwon, which cannot be confirmed their existence, we got 80K Bitcoin in total.

Cumulative UST destruction (100 million)
Cumulative UST destruction over the Total Market Cap Reduction of Luna

The investors who purchased Luna token between $57 and $4.1 rescued $2.38 billion in UST.

The investors who purchased Luna token between $4.12 and $1.00 rescued $2.92 billion in UST.

The investors who purchased Luna token between $1 and $0.1 rescued $1.68 billion in UST.

The investors who purchased Luna token under $0.1 rescued $420 million in USTs.

Yield Reserve Daily Average(30 Days)

About B.TOP

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