$UST is designed to withstand shocks, that's what an algorithmic stablecoin does compare if $UST goes to $0.90 or $1.1 vs $USDT - the peg bends in one and breaks in the other. I blame TFL for creating the wrong expectation with prior posts implying instantaneous peg stability

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Batch Brew Coder · May 9, 2022 · 12:25 PM UTC

We Are The Peg 🌕 retweeted

Batch Brew Coder@BatchBrewCoder9 May 2022

1/ To help others understand the $UST arbitrage and why the peg doesn't come back straight away... There are some parameters that determine the spread when minting and burning $UST / $LUNA. The more mint/burn happens in a day, the higher the spread. #terraluna

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2sigmas-below · May 1, 2022 · 6:26 PM UTC

We Are The Peg 🌕 retweeted

2sigmas-below@2sigmasA1 May 2022

After @Remi_Tetot stated that he got tired of the same old $UST death spiral threadooors, the threadooors started a "new" FUD. -> What happens if $UST 's market cap is higher than $LUNA 's? A thread 🧵👇

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larry_engineer · Jul 28, 2021 · 11:17 PM UTC

We Are The Peg 🌕 retweeted

larry_engineer

@larry0x28 Jul 2021

9/ With this, we can finally arrive at our conclusion: 𝗨𝗦𝗧 𝗶𝘀 𝗯𝗮𝗰𝗸𝗲𝗱 𝗯𝘆 𝘂𝘀𝗲𝗿 𝗮𝗰𝘁𝗶𝘃𝗶𝘁𝗶𝗲𝘀 𝗼𝗻 𝘁𝗵𝗲 𝗧𝗲𝗿𝗿𝗮 𝗯𝗹𝗼𝗰𝗸𝗰𝗵𝗮𝗶𝗻 𝗮𝗻𝗱 𝗰𝗮𝘀𝗵 𝗳𝗹𝗼𝘄 𝗴𝗲𝗻𝗲𝗿𝗮𝘁𝗲𝗱 𝗯𝘆 𝘀𝘂𝗰𝗵.

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🧩MeetWawa 🐶 · May 8, 2022 · 11:50 AM UTC

We Are The Peg 🌕 retweeted

🧩MeetWawa 🐶@MeetWawa8 May 2022

5/12 But what happens if $LUNA's market cap drops below $UST's market cap? Well, there will initially be a lot of FUD (fear uncertainty doubt) on how $UST is undercollateralized. But this is important! $UST is not backed by $LUNA, but rather, the demand of $LUNA.

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