Seasoned Ethereum (ETH) developer, investor, and advisor Mariano Conte, former head of smart contracts at MakerDAO, recalled a discussion regarding the design flaws of the Terra (LUNA) coin from April 2018.
‘Death spiral’ is predicted for TERRA (LUNA) in 2018
Conte shared on Twitter a statement from Cyrus Younesi, fellow MakerDAO on April 20, 2018, where Younesi criticized Terra Engineering (LUNA) and its stablecoin (UST).
Younesi criticized the idea of backing UST using only LUNA, considering that this “asset” backing is too fragile, as investors panic would easily trigger a “death spiral” when two cryptocurrencies, stablecoin, and its native currency race toward zero.
He also referred to the tragedy of the first algorithmically backed stablecoin (USNBT), which collapsed in the second quarter of 2016.
Source: U.TODAY
