How does Curve become an ATM for LUNA to buy BTC?

TFL (Terraform Labs) has 413 million LUNA tokens, which are worth $43.3 billion today, which is larger than the token supply currently in circulation.

Selling this part without interruption is like walking a tightrope.


Over the past 6 months, the TFL has started to unwind its reserves. First, donate LUNA to LFG, then sell through OTC discount. Now, DO Konw (Terra founder) wants to build a BTC war preparation library.


LUNA currently holds $1.5 billion in BTC, it plans to build a market cap of $10 billion, where to get it?

One way would be to sell LUNA and then buy BTC, but this would create an oversupply, increase the liquidity of LUNA, and send the wrong signal to TFL’s value proposition.

Instead, Do Kwon will trade LUNA for UST, and then use UST to get BTC, the problem is that Terra’s native exchange doesn’t have enough BTC. So people will gradually find that DK will burn LUNA to mint UST, connect UST to Ethereum, exchange UST for USDC/T on CRV, and use USDC/T to buy BTC.

We’ve seen this happen, on March 5th LFG tweeted about balancing UST in the CRV pool, the same day we saw $70M in UST swapped for USDT, 3 days later we saw ~$500M Tether transferred to LFG.

Address: 0xe3011271416f3a827e25d5251d34a56d83446159


 The problem is that the current CRV pool is not big enough, there is $650 million USDC/T in the UST CRV pool, and he needs $8.5 billion.


That’s why the announcement of Pool 4 is not surprising, he needs to continuously get a lot of hard currency, he can only get this on CRV, if there is an LP providing USDC/T for UST, this will work.

If not—DK may face the problem of unbalanced capital pool and need to sell LUNA in exchange for USD, there is some evidence that TFL sees the advantages of MIM/UST pool. MIM/UST peaked at $1 billion and has now shrunk to $100 million. The graph below shows that TFL accelerates the solution of the MIM problem.


LUNA needs a deep, growing pool of hard money, and CRV/CVX bribes will grow as a result. LUNA’s bribe payments are similar to the discounts required to put billions of LUNA on an OTC basis. Since private token placements usually have a 20-30% discount, we can say that if DK pays only a 15% bribe to get out of $8.5 billion in LUNA – that’s the increment.

Posted by:CoinYuppie,Reprinted with attribution to:
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