Skip to content

The Art of The Bubble

Trading Bitcoin, Cannabis and Everything Bubbly…

  • About Us
    • Welcome
    • Contact Us
    • Disclaimers
      • Results are not typical
      • Privacy Policy
  • Art of the Bubble Series
    • An Absolute Beginner’s Guide
      • Lesson 0: Why Doesn’t Everyone Do This?
      • Lesson 1: The Mechanics of Exchanges and Trades
      • Lesson 2: The Structure of the Stock Market
      • Lesson 3: The Structure of Stock and Crypto Indices
      • Lesson 4: How to Identify the Value of Stocks
      • Lesson 5: Bitcoin’s Intrinsic Value
      • Lesson 6: Why People Feel Good About 80% Losses (And How To Avoid That)
      • Lesson 7: Trading Momentum
      • Lesson 8: A 3-Step Method For Late-Start Trades
      • Lesson 9: The Simplest Way to Make Money During a Bitcoin Crash
      • Lesson 10: How to Make Money During a Crash
      • Lesson 11: What To Do When You’re Late To Exit A Crash
    • The Art of the Bubble
      • Lesson 1: Don’t Try to guess the Top
      • Lessons 2 and 3: An Introduction to Momentum Methodology
      • Lesson 4: Learn to Use Lead Indicators
      • Lesson 5 – Why Only Big Bubbles Will Change Your Life
      • Lesson 6: Use Relative Risk Assessments To Determine If You Should Trade A Bubble
      • Lesson 7: Level one strategy is the big picture
      • Lesson 8: How To Use Internal Leverage and Psychological Dynamics
      • Lesson 9: How The Broader Economic Environment Structures Your Trades
      • Lesson 10: How To Distinguish Bubbles (And How To Trade Them)
      • Lesson 11: The Art of the Crash
      • Lesson 12: Learn How To Scale Your Trades
      • Lesson 13: How To Trade A Bubble Bounce
      • Lesson 14 – Learning To Use Uncorrelated Assets
      • Lesson 15: How to Defeat The Paradox of Investing
      • Lesson 16: How To Trade as a Crypto Maxi
    • Portfolio Optimization
      • Lesson 1: The Secret to 10x Outperformance Over Bitcoin
      • Lesson 2: Statistical v. Logical Optimization
      • Lesson 3: Strategy Diversification
      • Lesson 4 : Relative Performance Analysis
      • Lesson 5: How To Make Money in All Crypto Seasons
      • Lesson 6: The Dumbest Way to Improve Your Investments
      • Our Model
  • DISCORD
  • Log In
    • Account
    • Bubble Rider Report
      • Bubble Rider – Stock Ticker
        • Bubble Rider – Stock Ticker Archives
      • Bubble Rider Report – Archives
    • Crypto Rider Report
      • Crypto Ticker
        • Crypto Ticker Archives
      • Crypto Rider Report – Archives
    • DIY-er Report
      • DIY-er Ticker
        • DIY-er Ticker Archives
      • DIY-er Report – Archives
  • Free Newsletter
Watch Online
  • Home
  • 2022
  • May
  • Should You Hold or Sell LUNA v2?

Should You Hold or Sell LUNA v2?

Wondering whether you should hold or sell LUNA v2? The fast answer is: most of your LUNA v2 is locked away for 6 months anyway so you can’t sell even if you want to.
5 min read
Terra Luna

Luna Crypto Investment

AOTB Mini-Series

Hello Bubble Riders!

Wondering whether you should hold or sell LUNA v2? The fast answer is: most of your LUNA v2 is locked away for 6 months anyway so you can’t sell even if you want to. You should just be able to open your TerraStation Wallet and see what you’ve got (here’s the official article from Terra Labs).

This is the image you need to look at to see what has been supported in the new LUNA airdrop.

This image has an empty alt attribute; its file name is tvJKhdqxqDCIUV0eVPGdiAhk00SlbJm7dr2pZXnabFveyXotQNZ4LVUjuLXR404t0WjTTiOvXFC8NOpwRYUddKkaND6clpIZ1mKLxyE--kK-1ioSv9t3cqfp_SuxLTKQj5spKEciCRiex9j7wA

Whether Hold or Sell LUNA v2

The new LUNA token is going to support the ecosystem. So far, Loop Finance seems to have left for another blockchain, but, as far as I know, the leading projects have remained. 

In its new form, LUNA will just be an L1 that’s fast, cheap, and easy to use. It’ll still have the world’s top synthetic market, yield aggregators, etc. If you had staked SPEC tokens, they’ll still be there.

One part of assessing future viability is to look assess trustworthiness. There’s been a lot of speculation, but Nansen’s on-chain analytics team has provided us with what will probably be the fullest account we’re going to get.

What Actually Happened (Without Conspiracies)

Note, you can read Nansen’s full (and technical) report here.

In simple terms, Nansen found that the decline happened in two parts.

  1. There was an initial shock
  2. There were a few wallets that accelerated in and profited from the decline.

Note, it simply cannot be determined if the initial shock was orchestrated or mere coincidence. Nansen noted net outflows from Anchor since mid-April. Rather than the hack or single agent narrative, Nansen writes:

“The de-peg of UST could instead have resulted from the investment decisions of several well-funded entities.”

The initial shock caused broader depegging on centralized exchanges for UST as people took money from Anchor and mostly swapped for USDC. At this point, people witnessed UST in the $.92 range on exchanges like Binance.

That’s where the acceleration enters.

With respect to the acceleration (part 2) the details are technical. What happened (in a general way) is this. The Luna Foundation Guard (LFG) used its $3b backstop to provide liquidity to support the peg of UST on-chain. 

  • On centralized exchanges, like Celsius where a bunch of this happened, UST had depegged down to $.92 by selling pressure (from the initial shock). 
  • On decentralized exchanges, especially Curve, LFG was spending money to maintain the peg.
  • A small number of agents bought large amounts of UST at a discount on those centralized exchanges and sold on the decentralized exchanges (pocketing the difference).

Here is Nansen again.

“We observed that a handful of wallets launched the offensive on Curve (Figure 6). This was confirmed by aggregating net flows by wallet address over the duration of May 7 and May 8. The Top 18 wallets by net flows over May 7 and May 8 accounted for 77% of total UST inflows to Curve over that period (Figure 7).”

Their analysis, in fact, was able to identify two key agents acting on the Celsius exchange–though, that analysis notes that they did send tokens through Binance (which is where the depeg was most severe and most broadcast). That acted to accelerate the decline and maintain a depeg (hence maintaining the arbitrage opportunity).

Before LFG could close the gap between centralized exchange and the decentralized Curve they ran out of money. Hence, UST depegged on-chain and that spelled the end of the protocol.

What To Expect Going Forward

We’ve seen that groups of agents can exploit feedback loops in the decline of stable coins to make lots of money, potentially billions, even if they might not start the cascade. I’d expect to see some “arbitrage funds” attempt to knock over a few more stable coin projects going forward to realize these returns.

If I were to do this … right now $TOR looks ripe for decline.

At AOTB, we have a risk scoring chart to stay away from possible design flaws. But to avoid this one in particular, just ask: is it an algorithmic stable coin? If yes, then plunk anything involved with that into “high risk.”

Notably, LUNA v2 did not try to resurrect UST. In short, this isn’t a “fool me twice” scenario, since that kind of collapse is impossible on LUNA v2. 

It might be worth comparing LUNA v2 (or just LUNA) with other projects.

  • Relative to Ethereum, LUNA is cheaper and faster. ETH is still the king of ecosystems, enjoys a regulatory advantage that only Bitcoin has, and has the most brand recognition of any coin after BTC.
  • Relative to Binance, LUNA is actually a decentralized protocol (or even has aspirations to become one at all).
  • Relative to Solana, LUNA is more decentralized + has fewer congestion problems (so far). Solana’s Metaplex and NFT markets were better than LUNA’s before this.
  • Relative to AVAX, LUNA only really has a better synthetic and yield aggregating stack. AVAX is killing it in GameFi.
  • Relative to ALGO, LUNA is faster with a more functional defi ecosystem–so far. I still love this project though.
  • Relative to ADA, LUNA actually has an ecosystem, and it’s both faster and cheaper.
  • Relative to DOT, LUNA has a more robust ecosystem.

In short, the LUNA ecosystem is still a significant advantage in the platform wars. Whether the coin is worth holding 12 months from now will turn almost entirely on how well that new ecosystem functions.

This image has an empty alt attribute; its file name is 1GCzVAlSiHBUnmeP1jboQ4nUZudRoYRHfWimoy7OLfEhKdVK2yxXmPmoVfaw0o500gTXS8rQhs1sQPxs00k53Arw7XYrvjEN02UddxRLffqLd0sV5J00gT792GSdusvLnwociyx0gZiVq8Tj3Q

This week I wrote a number of pieces that are related to this post, so you might want to have a look if you’ve missed them.

This image has an empty alt attribute; its file name is zA8k4E2d1TRpQQfKagBxZKARyVLSWirp7DMuPBCiUenF6W5ifx5YUF1BqUc0vNdZ1sSJug1ob9Ts45ZNHaJdE4p7KUN4Kjla6MsRn5XojvS28YVMHTLAAJlfdAaxCDlGMNGJFCCu1414PfUkZw

This image has an empty alt attribute; its file name is -9RdFVnmSv1fbqttYhIEbcOeozghbOSdAO-JdZ9mMZC1uKkNmnzVhDZitxH1MCc3Q_OnmIVp9wi9KYJjx_h3EQxx1H7XQoaNGDOrWJ7vJhfN1F2AAUHnWFM6LdKZoIQQryk1v2iX7ICOCF58pQ
This image has an empty alt attribute; its file name is nbW3_TIwCx7C0wjlRRCDU_P9tsYQsUean90BBiC2-j1panOd-v69ubjhNxRLS2UGuPJC025KEdy83YNV36yVuelVvdly_x_SL0Zn-OZz_L27eFcN6EtJz3jIUAi_5_STQKlrpqK__CBZlEZt9A


This image has an empty alt attribute; its file name is Kilx35rvX4ITmx5-107xwup0RtlQVM0UjSh3M3QWfT-R4TRhf0gC0XS8h7zWGX7yV3xrAHofoUf2YbzofKe_FoGALe6Kn4P-4kIXpaAyOydnUQi4tywD4AeTWejM_kpYKjlE_eUniIpbWEUs_w

This image has an empty alt attribute; its file name is zdCCXopNNFjC-Gx0eoY8tvKwhgKHMQwzyVj8birwx4ohdcvo-u4uWsBzfDSeKAqsbL4ifH8MaWp09TCVlvguCYxub8EfzLbsj-IOQkSklGiyPb7qGE2r9jFrxmfQrBprcb2kI31XNrz4k-jJ8A

This image has an empty alt attribute; its file name is gcNsfgQctN-Oz9tANvBQzFlVB98P2byJYZlmL3Rgq7fTx_CMZiA-5nALgnKekjE8tAy6HpYihRDuHmLTMTHLDb6UkL-TgekGG_hf8LOLXUTQe6wC3nu-pn4QimK8yT_VqZaxrxIGxpop3HBotQ

That’s it for this week. Remember to join us on Discord if you haven’t already.

Happy Trading!!

Disclaimers

This newsletter is provided for educational and entertainment purposes only. Robin Technologies and Analytics LLC is the firm that distributes The Art of The Bubble products. The firm does not provide individually tailored investment advice and does not take a subscriber’s or anyone’s personal circumstances into consideration when discussing investments; nor is Robin Technologies and Analytics LLC registered as an investment adviser or broker-dealer in any jurisdiction. 

You should expect no financial returns one way or another based on statements contained herein. These points hold equally for any statements that could be attributed to The Art of The Bubble or any related business entities or personnel operating in association with Robin Technologies and Analytics LLC. If you decide to buy or invest in anything, then your returns and potential losses are your own. No statements about taxation are taxable advice and you are encouraged to consult your own tax professional. You are also encouraged to do your own due diligence before investing in anything.

Tags: Bitcoin crypto crypto community crypto investing crypto news crypto wallet cryptocurrency Ethereum Investing LUNA

Continue Reading

Previous: The Future of Stable Coins Proves Counterintuitively Bright
Next: The Secret Reason Move To Earn Cryptos Aren’t Sustainable (But This Is)

Related Stories

What’s a Smart Chart? Why Is It The Secret To Trading In The Crypto Winter?
5 min read

What’s a Smart Chart? Why Is It The Secret To Trading In The Crypto Winter?

How A New Ethereum Product Will Give You Free Money: The ETH Fountain Ethereum product
6 min read

How A New Ethereum Product Will Give You Free Money: The ETH Fountain

Why Our New NFT Whale Watch Portfolio Is Free (For Now) biggest NFT Whale
5 min read

Why Our New NFT Whale Watch Portfolio Is Free (For Now)

View Subscriber Plans

  • Cryptocurrency, Bubbles, And Financial Freedom: Some Perspective On Where We Are Now
  • Whales Continue Moving Risk-Off As They Handle Stablecoins and Basic Staking
  • We Are Seeing An Increase In NFT Activity: Momentum Is Still Weak 
  • Our Portfolio Maintains Positive Numbers As We Outperform The Benchmark by 51% Since Last Year
  • The AOTB News Update: CryptoWhales Increase Their Shib Inu Stash Overnight

You may have missed

Cryptocurrency, Bubbles, And Financial Freedom: Some Perspective On Where We Are Now
2 min read

Cryptocurrency, Bubbles, And Financial Freedom: Some Perspective On Where We Are Now

Whales Continue Moving Risk-Off As They Handle Stablecoins and Basic Staking
1 min read

Whales Continue Moving Risk-Off As They Handle Stablecoins and Basic Staking

We Are Seeing An Increase In NFT Activity: Momentum Is Still Weak 
1 min read

We Are Seeing An Increase In NFT Activity: Momentum Is Still Weak 

Our Portfolio Maintains Positive Numbers As We Outperform The Benchmark by 51% Since Last Year
1 min read

Our Portfolio Maintains Positive Numbers As We Outperform The Benchmark by 51% Since Last Year

  • About Us
  • Art of the Bubble Series
  • DISCORD
  • Log In
  • Free Newsletter
Copyright © All rights reserved. | DarkNews by AF themes.