How does the textbook short “Crypto Soros” snipe the UST?

Note: This is a deduction of “Crypto Soros” sniping UST. According to the deduction, if the mastermind behind the scenes closes the position at around $32,000, it will make a profit of more than $800 million.

Now that everyone is talking about UST, including Janet Yellen’s assessment, everyone is talking about how much Terra’s debacle has lost, let’s take a different angle today and talk about how much money “Soros” won in this war.

The story begins in late March when LFG announced that it would start buying BTC and put it into the treasury to help support UST. So LFG started to accumulate BTC on March 22, and by March 26, it had a BTC position of more than $1 billion. This paved the way for UST’s “Broken War”.

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The time came to April 1st, the second round started, 4pool Frax announced the joining of UST, “Soros” finally caught the loophole here, and his attack was about to start.

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First, he borrowed 10W BTC and exchanged 25% of it for UST. We don’t know at what price the 7.5W BTC of “Soros” began to be shorted, only that it was sold to Kwon’s buying order (or guesswork). LFG bought 15W of BTC between March 27th and April 11th, so let’s just take the average price between those dates, $42,000.

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Immediately afterwards, he took advantage of 4Pool to move liquidity and used a certain amount of UST in the Curve UST pool to consume the pool’s liquidity, causing a certain percentage of decoupling (the lowest point of 0.972), and began to create panic among people.

At this time, LFG began to sell BTC to defend the peg exchange rate, which produced a certain selling pressure on BTC, and the action of the remaining UST of “Soros” officially began.

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As Curve’s liquidity was exhausted, “Soros” used their remaining $1 billion (around $650 million) to start selling on Binance. Panic spread to everyone’s heart, which caused a real decoupling, and people were trying their best to escape.

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LFG sold BTC and “Soros” sold UST, which eventually caused the chain to become congested and CEX suspended UST withdrawals. The crypto community panicked as they wondered how much BTC to sell to keep the peg, and BTC fell 25% to $31,300 from $42,000 on April 11. Finally, the decline of BTC accelerated, UST completely broke off the anchor, and the Air Force won a big victory.

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At this point, the battle is over. As for how much money “Soros” earned through this battle, we do not have detailed information records, and it is likely that he also shorted LUNA at the same time. But if they closed at the average price of 32k then he made at least $952m from this short, in Curve’s UST dump I don’t think they lost much, let’s say he lost 1100 from it Then, due to the serious decoupling of UST on Binance, he had to pay a cost of $125 million. In the end, his total profit was $815 million (excluding borrowing costs).

Let’s review the whole process. BTC is the core of this event. When LFG announced its entry into BTC, “Soros” foresaw that they would continue to sell BTC in exchange for UST’s peg (in order to prevent the price of LUNA from falling).

Before 4pool, the liquidity of 3pool was very low, which made it only take “Soros” $350 million to drain it, causing panic in BTC and UST.

There’s a lot of guesswork involved, I admit, as to his profit, but either way, he made a lot of money from this trade, and it was a textbook fight.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/how-does-the-textbook-short-crypto-soros-snipe-the-ust/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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