The UST Unwind and Its Implications

May 10, 2022 • 7 Min Read

The Makings of a Quasi-bank Run

As if investors needed more reasons to be bearish, the market was thrown into a slight bout of chaos on Monday after a quasi-bank run on UST. Please refer to our prior work on the topic for further background information on UST’s functionality, Luna Foundation Guard, Anchor, and stablecoins.

First Peg-Break

We have ample reason to believe that the “run” on $UST was not a coincidence, but a deliberate exploit of UST’s (clearly fragile) architecture.

On Saturday, prior to any market panic, the Luna Foundation Guard removed approximately $250 m...

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