{"id":572033,"date":"2022-06-03T18:37:57","date_gmt":"2022-06-03T17:37:57","guid":{"rendered":"https:\/\/en.ethereumworldnews.com\/?p=572033"},"modified":"2022-06-04T10:51:53","modified_gmt":"2022-06-04T09:51:53","slug":"terraform-labs-early-luna-holders-dumped-on-retail-before-usts-collapse-report","status":"publish","type":"post","link":"https:\/\/en.ethereumworldnews.com\/terraform-labs-early-luna-holders-dumped-on-retail-before-usts-collapse-report\/","title":{"rendered":"TerraForm Labs and Large Early LUNA Holders Dumped on Retail Before UST’s Collapse – Report"},"content":{"rendered":"
Summary:<\/p>\n
The team at Arcane Research has released a report on the recent collapse of TerraUSD (UST)<\/a> and the LUNA token. The informative report<\/a> kicks off by comparing the Terra ecosystem to a sinking cruise ship, whereby the captain and distinguished guests had fled in superyachts, leaving most passengers behind without lifeboats.<\/p>\n Furthermore, the report likened the Terra saga<\/a> to a standard pump-and-dump scheme with the early LUNA supply held by a few holders and TerraForm labs, as highlighted in the chart below courtesy of Arcane Research.<\/p>\n <\/a><\/p>\n The report further informs that from October 2020 to May 5th, 2022, 3,000 Terra wallet clusters had a net outflow of $6 billion worth of LUNA to exchanges and through bridges. In contrast, all ‘other hundreds of thousands of wallets have a net inflow of $6.5 billion’ thus indicating a pattern of selling of LUNA by the large holders to retail investors.<\/p>\n With respect to TerraUSD (UST), the team at Arcane Research pointed out that the burn and mint mechanisms surrounding the stablecoin and LUNA, provided ‘ the perfect way to create sustained exit liquidity for their initial endowment of LUNA tokens.’ They added:<\/p>\n The burn\/mint mechanism in the Terra ecosystem was simple.<\/p>\n With certain limitations, you could at any time convert 1 dollar\u2019s worth of LUNA to 1 UST by burning the LUNA, and vice versa.<\/p>\n In theory, if I owned all LUNA tokens, I could drive up prices on the exchanges by buying my own tokens, then mint a great amount of UST while at the same time reducing the LUNA supply through the burn\/mint mechanism.<\/p><\/blockquote>\n Consequently, LUNA’s rise in value in the fall of 2021 made it possible for the large holders to convert their tokens into great amounts of UST. At the same time, the 20% yield guaranteed by the Anchor protoco<\/a>l and reserve backing by Terraform Labs, created significant demand for UST making it easy for the large LUNA holders to cash out by minting UST and selling into the Anchor-induced demand for the stablecoin.<\/p>\nEarly Terra (LUNA) Supply Controlled By a Few Holders, Who Sold And Made Tremendous Profits<\/h2>\n
UST Provided the Perfect Exit Liquidity Similar to a Prolonged Pump and Dump<\/h2>\n