Terra (LUNA) is trading at record levels despite uncertainties in the overall market. Well-known critics are now publicly betting millions against LUNA and find the prominent counterpart in Terra founder Do Kwon.
Speculations on the crypto market are nothing unusual – but what is currently happening around forecasts for Terra (LUNA) reaches rarely seen levels. The story kicks off with a tweet from well-known crypto handler Sensei Algod, who has previously cast doubt on the concept of Terra. US$1 million was what Sensei Algod wanted to bet on Terra trading lower than March 13, 2021 in a year’s time, or US$88. It took only a few hours and Do Kwon, who founded Terralabs as the company behind LUNA, chimed in. The two betting partners agreed on co-host Cobie from the popular crypto show UpOnly as the “betting sponsor,” who now oversees and organizes the action.
And while Cobie was still cracking jokes like “Why I decided to steal the $2 million from the betting pot” via his Twitter account, the next million-dollar bet was already forming. This time, crypto trader GigantRebirth wanted to bet US$10 million on a price drop within a year on Terra – and according to Cobie, the requested sums have now arrived here as well. He now has $22 million to oversee and will hedge it sensibly, Cobie writes. Are there bored crypto millionaires passing the time with gambling or do the bets have a rational background?
Does the concept of Terra have a logical flaw?
Sensei Algod calls Terra and the TerraUSD (UST) stablecoin linked to it a Ponzi scheme, i.e. a kind of Ponzi scheme. On Twitter he already explained in February how he comes to his assessment. Accordingly, he does not trust the hedging of TerraUST (market capitalization of currently just under 15 billion US dollars) by LUNA (market capitalization of currently just under 35 billion US dollars). As soon as someone wants to cash out billions of UST, the house of cards will collapse and let both altcoins fall to zero, according to Sensei Algod.
A short time later, however, it was announced that a fund had been set up to provide additional protection for TerraUSD, with $1 billion in Bitcoin (BTC) collateral from outside the Terra ecosystem.
Conclusion: Terra in the spotlight – bold bets.
Terra’s price curve has slipped slightly into positive territory since the bets were made, and TerraUSD has remained stable – if this could be used as an indication of the betting outcome in a year’s time, the critics might have been betting on the wrong arguments. As Terra climbed to a new all-time high a few days ago, we summarized the key pro arguments. Fortunately, at least GigantRebirth and Do Kwon have meanwhile also announced that they will donate millions. In view of the real problems elsewhere in the world, many people were unhappy to see millions being thrown around for bets on Terra, and the campaigns also smelled strongly of ego advertising.
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